Judge Judy's Bitcoin Case: An Interview With The Defendant

The popular reality TV show Judge Judy cashed in on the latest bitcoin pump with a related case airing last Thursday on November 12th.

The show stars Judith Sheindlin, a former New York prosecutor and family court judge who now decides disputes as an arbitrator in a mock-up courtroom. One of the disputes hosted last week by the series included Dan Haahr and defendant Marlon Koland. 

After Haahr failed to successfully purchase a truck on eBay, he accused Koland of theft by claiming he was responsible because the bank account he deposited cash into, was Kolands. 

Koland defended that he "was scammed" as well and that they were both victims of an elaborate MIM (man in the middle) scheme.

So lets just think about all of that for a second. This guy decides the best option to buy a new car is to hop on eBay, locate an unrealistic deal in another state mind you, and then continues to take an untraceable amount of cash to Bank of America and blindly deposit the funds into some guys account who he doesn't know, has never met, and could not verify as the owner. All information obtained from a stranger on the internet and its reliable source impeccable trust.

Gee ... I can't imagine how anything could have possibly gone wrong.

Toss bitcoin and MIM terminology into the mix with Judge Judy's confusion and there is little doubt why Sheindlin got this one out of the way as quickly as possible. She wanted to return to this planet.

Ultimately, the ruling was in favor of Haahr and the defendant was ordered to pay $2000 in damages, but there story doesn't end there.

The Interview 

We sat down with Marlon Koland on Friday the 13th (the day after the episode aired) to get his side of the story. After seeing the episode and having knowledge of these types of MIM scams we suspected the story depicted on Judge Judy was not completely accurate. 

Here's what Marlon had to say.

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news.dinbits.com (NDC): Hello Marlon, please tell us a little bit about yourself and how you got into digital currency and trading bitcoins?

Marlon Koland (MK): My name is Marlon Koland, I am originally from Minnesota, and started following bitcoin back in 2009. I have always had an attentiveness to new technology and economics and bitcoin provided me an opportunity to pursue my passion as a hobby and potential investment. Around this time everyone though I was silly and wasting my time because I constantly come up with new ideas daily, which 99% fail (as I am sure any entrepreneur can relate.) Despite discouragement I continued to invest around 10% of my income into bitcoin for the following year. At one point I was in possession of 9500 bitcoins, and chose to sell them when bitcoin made its first significant rise and then dropped back down to $5 each. Being a naive 18 year old, I sold then and thought I made out well with my $50,000.

I invested the majority of my capital gain on a failed business endeavor, soon to be realized bitcoin decided to become so volatile that I couldn’t help but kicking myself in the butt for throwing away millions. I did my best to forget about it until bitcoin headlined in the news back in November of 2013 peaking at over $1200 USD for a stint. I would say this is the first time since I started following and preaching bitcoin (to the point of being annoying) to all my friends and family. I already had the established account on Localbitcoins from conducting a few trades here and there, but I would say bitcoin’s first bubble changed my life; at that point I had no problem convincing my wife that quitting my full time job and putting forth all my efforts into trading bitcoin would be the best choice for our family’s future.

NDC: How long have you been trading bitcoins on a P2P (peer-to-peer) level and is Localbitcoins.com your main marketplace or do you use others?

MK: Localbitcoins was the first platform I became established on. I was using Mt. Gox for purchasing, but for trading using methods of arbitrage, it is crucial to have fast, efficient, daily, transacting. I believe that MyCellium is another potentially good platform that I may utilize in the future, but for right now I am happy with Localbitcoins to conduct trades with new as well as established users, and to make contact with others in order to conduct business off site. Overall, I have been using P2P services for about 4 years.

NDC: During one of these P2P transactions you ran into a little problem and found yourself in the middle of a MIM scam. What happened?

MK: The only experience I have ever had with an issue like this (MiTM) was from doing business with the same individual, user johnla73 on LBC, that lead me to make contact with the victim on Judge Judy. I had opened a deal with him that did not finish in the allotted time for escrow. He contacted me off site asking if I could take cash deposits through Bank of America. I have consistently taken cash deposits though other banks and accounts on a daily basis, so it was not out of the ordinary for a client to require such accommodations. The user had 100% feedback on site, showing history of transacting well over 150 transactions (equivalent of $50,000 at time of writing this) so I moved forward in opening a Bank of America account. We communicated through cell phones and he remained very professional and prompt.

For example: “Good morning Marlon, I will need $5000 in bitcoin today, I have made the deposit, here is the picture of the receipt. Thank you, I will be busy until later today. Please send coin to 1sjAif…….” The activity went on for week with no issues. This occurred until one day I went into the bank to withdraw my money and they told me there was a fraud investigation and that my funds were frozen. I proceeded to speak with the fraud prevention from Bank of America and he explained to me what was occurring. At this point we closed the accounts and I was NOT allowed access to the deposited funds for that day equaling $5000. When I attempted to contact johnla73, I received no response, at which point I realized what had actually occurred.

NDC: So the question on everyone’s mind is how on earth did this end up on Judge Judy?

MK: I did not expect to get on Judge Judy from this incident. I was frankly more concerned about legal ramifications from this occurrence. Without my knowledge of the activity being fraudulent, over $33,000 was moved through a fresh bank account all leading to falsified activity. I currently have serious issues with banking regardless of fraud given the business I am in regarding bitcoin being a conflict of interest for financial institutions.

To answer your question, Judge Judy employees digs through public records filed for civil lawsuits to find potentially interesting cases that will pull in revenue for their television show and keep the viewers at a high peak to endorse the network. It just so happens that I was randomly selected to be called and asked if I would be willing to participate in the show. At the point of initial contact, I believe that the network had no clue that the case was relevant to bitcoin.

NDC: How was the Judge Judy experience and the process in general?

MK: The experience was actually quite overwhelming. You are given no guidance on how to behave, or what kind of questions will be asked. Planning responses for remedial retired judges was the number one hurdle I desperately failed in planning beforehand. Initially I tried to explain the localbitcoins platform, and my reputation on it, holding up documents to be displayed to the audience and Judy. I also had an amazing figure drawn on how a MiTM attack occurs so the situation could be properly evaluated. I was shut down before I could present tangible evidence, and the only article the “Judge” decided to look at was my Minnesota driver’s license, while audio altering the way I pronounced “Oregon”. The whole process what fast and completely misconstrued.

NDC: Yes, these TV shows tend to mold the drama by way of editing, after all it is all about the ratings. How “edited for television” was it compared to what actually happened? 

MK: All I can add to it is the fact that it is Hollywood Production Based. Over 40% of my responses were chopped out, and I was only allowed to explain my situation briefly without interruption. Which given that amount of stress I was under, I believe I did as well as I could.

NDC: How was Judge Judy, Judith Sheindlin, herself? Was she as mean as she appears to be on television?

MK: Judge Judy played her role well. The intention of the show is to draw ignorant people together to provide information to other ignorant people. The network does its best to ridicule people to the best of their alibis to increase the number of people who watch the show, who then watch the commercials selling garbage, which tricks people into sending money "into outer space", as Judy says, so they can never see their money again.

To answer the question, she was very passive and was dead set on the fact that I was some sort of criminal idiot paying her bills.

NDC: Ultimately, they ruled against you. Did you think that was fair? What would you have done differently if you had to do it again?

MK: I was ruled against because no one in that court room, if you even want to call it that, had any idea about anything that was going on. To them it looked like I was a scumbag who wanted to steal some money, my appearance probably didn’t help much [laughs].

Doing it again, I would have avoided the MiTM attack in the first place. I have various methods I have implemented into my daily trading to eliminate this sort of fraud from occurring again.

NDC: This hasn’t detoured you from trading. What measures have you put in place to avoid this in the future?

MK: Nothing will detour me from trading. Blockchain technology is my life and I will fight to the very end to ensure its survival. Typical measures involve contacting bank and confirming everything, waiting a day extra for money to clear with unknown users, or cash money.

NDC: What advice do you have for other P2P traders to avoid MIM scams and to anyone who may find themselves on Judge Judy?

MK: For P2P traders: Only deal with users with 100% feedback. Make sure you are comfortable with the trading method you are using, and start small. Do not put all your eggs in one basket because methods and markets change constantly, sometimes daily. Keep a clear head and DO NOT BE GREEDY. Get out there invest in peer-to-peer lending, print paper wallets and store securely.

NDC: Would you have rather been on the People’s Court? I'm Joking of course, but feel free to answer.

MK: People’s Court... I did not even want to appear on Judge Judy, I just thought it could potentially bring some attention to bitcoin.

NDC: Marlon, thank you very much for your time, and taking the time to do this interview. We’ll give you the last word to say anything you would like to say.

MK: My last words are do not be fooled by news and propaganda. I am not a firm dead set believer of bitcoin, but the technology is cutting edge and crucial to learn and implement into everyday life. Slowly but surely I am certain we will see the moment come into play such as we did with the internet.

[end interview]

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Reality Television

If you caught the episode you may have noticed that Koland was given little chance to present anything to his defense.

He was frequently lead by Sheindlin who persuaded him to acknowledge consequences of an attorney general's determination that doesn't exist and engaged in rhetorical questioning like "have you ever been arrested" to tarnish his credibility.

But hey, give her props, that's her job. 

Let's face it folks, this is interesting television but it is not a court of law and Judge Judy is no longer a court judge, she is an arbitrator and the star of a television show that relies on ratings to attract advertisement dollars. The parties appearing on the show sign agreements stating that rulings by Sheindlin are final and waive any right to pursue further legal action (against each other). 

Ultimately ruling in favor of the plaintiff, Sheindlin summarized the defense stating:

"He was trying to deal with something called Bitcoin, which I don’t understand- which you’ve tried explaining it to me from today to tomorrow, I couldn’t understand it."

Fair And Balanced?

Arbitration is a form of alternative dispute resolution and regulated by the Federal Arbitration Act of 1925 (FAA) (9 U.S.C.A. § 1 et seq). This is a legal process in the United States and what the rulings on this show fall under however arbitration by definition is a resolution of dispute by an impartial adjudicator in which the parties involved have agreed will be binding and final. 

I guess that's one issue that has presented itself here. The adjudicator didn't appear to be impartial at all. In fact I would guess that if you took a look through Judge Judy's lenses, it was a case about some guy claiming to trade electronic funny money while really trying to scam a good ole' boy. This case was decided before anyone walked into this courtroom. 

Case closed. Right? Actually ... not so fast.

The Guilty Party 

Judge Judy may not look very far into things, but we do. 

We initially wanted to run the story Monday morning but postponed to investigate some of the facts and statements made by the various parties. We ended up speaking with Koland again to ask him a few additional questions and gather some other information.

There were for a couple reasons for this. First to see if the claims could be verified since the show didn't bother. Secondly, we wanted to rule out the possibility that Koland was indeed guilty. 

We concluded that Marlon Koland is telling the truth. Not guilty.

It is highly unlikely he had anything to do with committing this crime and had Sheindlin taken the time to review any of the actual evidence, she may have ruled this way as well. Now granted, Koland did himself few favors with his demeanor and preparation, but the other guy wasn't exactly a stellar example of litigative perfection either. 

The Man In The Middle (The Guilty Party)

Not only were we able to obtain proof in support of Kolands story, we were able to specifically link evidence directly to the Localbitcoins.com user he mentions in the interview, johnla73. Apparently this user has been accused of fraud many times by other users of the popular platform. Mysteriously enough, johnla73 has been missing in action and offline ever since the showed aired.

Shocker there. 

He covered his tracks and executed his plan well. He built of enough trust with Koland through multiple trades to earn the ability to trade off-platform and allowing the scheme to utilize Kolands bank account  (and undoubtedly many others), and he was careful to not leave any traceable evidence outside of a bitcoin wallet address. 

He was careful, but not perfect. Despite efforts to conceal any link between Koland and himself, the history of its existence was recoverable. This linked johnla73 to Koland and everything to the specific fraudulent transaction in question. To make matters worse (for johnla73), the selection of technology used to conceal his identity is also what reveals it. The capability to link his identity is made possible by the very technology that conceals it so well. 

That information, however, is only available to law enforcement without a subpoena and only in the event of a suspected crime. Well ... that makes it interesting now doesn't it? We just so happen to have one of those. It just got blasted on national television.

Judge Judy prevails after all in that respect. Koland and Haahr may not be able to pursue legal action against each other, they can both go after johnla73.

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Story by dinbits
Banner image by dinbits staff
Judy photo - Judge Judy

NOTE: As a courtesy, some of the specific details regarding the new evidence NDC was able to uncover was omitted to allow Koland the opportunity to contact authorities and his counsel.