Here's the complaint. Leaving aside the humour of it being brought before a circuit court in rural Texasi and various technicalities about the filing itself which are best argued another day, we're left with the pure, unadulterated humour of it all. Consider :
24. In August 2012, as the scheme collapsed, Shavers made preferential redemptions to friends and longtime BTCST investors.
This is by far the best part. Let's take the list of WoT people who at the time had rated his account and were pushing him as solid and whatnot, the goats and gigavps of this world. Wanna bet they're included ? I'll take even money for James Gibson for instance.
31. During the relevant period, Shavers obtained at least 700,467 BTC in principal investments from BTCST investors, or $4,592,806 when converted to U.S. dollars based on the daily average price of BTC when the BTCST investors purchased their BTCST investments.
32. During the relevant period, Shavers returned at least 507,148 BTC to BTCST investors as withdrawals or purported interest payments.
If these numbers are correct, and I have no real reason to suspect they aren't, then my own estimates are a little off the mark. I was guessing he split with something between 4 and 10% of 500k, which'd be <10 to 50k Bitcoin. Not quite 200`000, by any means.
33. During the relevant period, Shavers transferred at least 150,649 BTC to his personal account at an online BTC currency exchange which, among other things, he then sold or used to day-trade (converting BTC to U.S. dollars and vice versa). As a result of this activity, Shavers suffered a net loss from his day-trading, but realized net proceeds of $164,758 from his net sales of 86,202 BTC.
This'd be the explanation. "Normal" Ponzi operators are usually very disciplined folk, as it takes a lot of mental discipline to keep their brain from simply exploding under the daily stress of all the cognitive dissonance they're floating on (a point recently restated by Bernard Madoff, but otherwise universally declared by the people who'd know). This is the reason their scams do extraordinarily, shockingly and unexplainably well in the beginning : people generally wish to be associated with the visibly disciplined, and the level of discipline required is such that its presence is immediately obvious in myriad little details. This same discipline keeps them going to the point of explosion, and it's the reason why on average Ponzi scams blow up with about 5% of their invested assets still available. Perhaps the better way to put it is, they keep going until physically impossible to continue, which point is reached as assets drop to about a twentieth of what they should be.
Dishonestii Ponzi operators however skim off the top, usually to finance some addiction. The indictment meshes well with an old post penned by Bright Anarchist :
The guy is a compulsive liar with a massive fantasy-based ego as well. Before they fired him, they noticed he would say all kinds of bullshit like that he went to MIT for a year (fake), he was a pool hustler (he could barely play), an amazing blackjack player (barely knew anything), as basketball superstar (could barely play) etc, etc. It got to the point where he lied so much that everyone in the office thought it was almost funny: they'd say "what'd Trendon make up this week?"
That's that, dood figured he's an amazing daytrader of wonder, much in the way and much for the reasons Kludge mistook himself for a banker. Obviously reality didn't work out so well, but -50% returns over just a few months ? Dayum!iii
34. During the relevant period, Shavers transferred $147,102 from his personal account at the online BTC currency exchange to accounts he controlled at an online payment processor and his personal checking account, which he then used for, among other things, his personal expenses, including rent, car-related expenses, utilities, retail purchases, casinos, and meals.
That's that. He got a little over a hundred grand worth of hookers and Chuck-E-Cheese, a little over a hundred grand worth of daytrading losses and that's the whole story. Nigga's Oprah rich nao.iv———
- The Sherman division covers the cities of Allen, Anna, Argyle, Aubrey, Celina, Denison, Denton, Farmersville, Flower Mound, Frisco, Gainesville, Howe, Krum, Lake Dallas, Lake Kiowa, Lavon, Lewisville, Little Elm, McKinney, Muenster, Plano, Pottsboro, Princeton, Roanoke, Sanger, Sherman, The Colony, Trophy Club, Weston, Whitesboro, Whitewright and Wylie. Admire the stars on the last page. [↩]
- Yes, to his own mind the fraudster is "honest", or moreover there is some manner through which you could be doing what he's doing "honestly". Because, again, cognitive dissonance. [↩]
- In fairness, a portion of that could be represented as a business expense, in the sense there's a chatlog somewhere in which the pirate guy was dicking about "manipulating the price" and the collection of forum muppets was going "oooo do that again daddy!!1". Pretty lulzy. [↩]
- Yes, I do mean to suggest fraud doesn't pay. It doesn't. [↩]