You've seen them, in the movies, Burt Reynolds  played one in the 1999 movie "Mystery, Alaska" about a small town's hockey team,  Herman Munster (Fred Gwynne) played one in "Pet Cemetery", and recently Robert Duvall had a turn, in the recent 2014's "The Judge", also starring Robert Downing Jr. It's the parking ticket, feeble fining, pencil pushing, people person, also known as the small town Judge. The misdemeanor manager. The guy who's in the "little" court trying to prove he all the judge them "big city boys" are and more. 

Thyey aren't typically, and why they are in "little court". In fact in some counties, the only qualification to be a judge, is a high school diploma, or equivalency,  and that's it. Most of there time is buried in  tickets, smalls fines, and minor infractions.

They can rule. That's not going giving them a clear career, path to becoming Supreme Court Judge by any means, but it does still mean he is the Judge, and can do things like he has done here. 

The Smackdown 

In Breathitt County, Kentucky, however, one small county Judge brought down the hammer. He ruled, that a local resident must repay an 11.95 bitcoin loan that he received, and that not all. He has to pay it back, with interest, and totaling over $67,800. 

The loan was granted back in December 2013. when bitcoin's volatile price was rapidly rising and trading in the $800-$1,000 range. BTCJam, a peer-to-peer lending website, was the tool used to facilitate the loan, In response to Kerley's BTCJam advertisement (below), a Brazilian man, Daniel Kaminski de Souza, handed out what was worth around $10,000.00 at the time, to be paid by Dennis Kerley, along with a healthy 20% return on his investment.

Neither happened as promised.

Kerley's BTCJam Advertisement

BTCJam allows its users to place requests for loan in the way of what appear to be more like advertisements. Kerley's read:

"This BTCjam loan is for the purchase of one Bitmine 1 TH/s Desktop Miner and possibly one additional 400 Gh/s based on exchange rate manufactured in Sweden. These two rigs in Turbo mode will produce 2.1 Th/s This will be an great [sic] increase in my current mining capacity, (my current hardware earns ฿0.56/week). This will guarantee profitability with the current high rates of complexity increase."

When Kerley failed to repay the loan after the allotted 90 day period, de Souza filed a claim with BTCJam, and the arbitration process they provide for incidents like these. de Souza was awarded a generous 64.74 bitcoins, to be paid by Kerley.

Coutrhouse in Breathitt County, Kentucky

When that failed to happen, he contacted a United States attorney who referred him to Kevin Palley, an Attorney in the State and Kentuky, who wasted no time in filing a lawsuit for breach of contract, against Kerley, which resulted in the small county Kentucky Judge handing down a winning judgement. 

Judgement to the plaintiff in the amount of: $67,800.00

“That’s one of the dangers of lending money over the Internet,” Palley told AR, “Just because I get a judgement, it’s a piece of paper—I can try to put a lien on his house, take his car, but he has various homestead exemptions,”  he added, citing a law in Kentucky and elsewhere that exists to protect homeowners with deceased spouses who owe money to creditors.

Ya think?

There's dangers is lending money to Google Wallet, PayPal, or your Bank too. There's dangers in lending your cousin money. It's even questionable to loan yourself money during certain periods of time. The internet has noting to do with it, but at least he didn't bash digital currency.

Hazy Mathematics  

So just like your car note, mortgage, credit card and other loans that you have to pay. You have to pay back bitcoins when you borrow them. Seemingly common knowledge, but apparently in Kentucky, this is not readily available information, and it takes all of the above to get it to "sink in".

So this is all very good, however, what I don't get are the numbers. It as a $10,000.00 loan. What's this $68,000.00 bullshit? That's nearly seven times the amount he borrow, and only a year ago. 

According to the complaint there answer is:

"Plaintiff has suffered damages due to Defendant’s failure to honor its contract and Plaintiff requests damages for breach of contract in the amount of $30,723.53 as of September 3, 2014, pre-judgment interest in the amount of $17.07 per day as of September 3, 2014, court costs, fees and post-judgment interest."

Damages in the amount of $30,723.53? I guess so.


GAW Saga

Fist of all, if you ever need a picture of the Breathitt County, Kentucky courthouse, your lucky, because there is one. 

Only one. Onward.

What day would be complete without getting to pick on GAW Miners and Josh Garza again? 

If you take a look at this one. That little love letter is to Josh Garza and GAW Miners. It's a default judgement because they didn't show up in court, in the case involving Mississippi Power Company of failure to pay anything. This by default, they now have to pay everything.

I'm rather certain that's the least of Mr. Garza's issues right now. The SEC investigation is ongoing. We all already know what the outcome of that is going to be, but it's like waiting for Christmas to hear it actually stated. Oh what a day that is going to be!

Post a Comment

  1. The interest rate is 20% per month as stated in the loan listing

    If compound interest rate was used in a year (12 months) 1.2^12 = 8.916 times the lent money.


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