2. Joel offered the choice that Patrick is a scammer himself or an idiot, but I'd like to offer a marginally kinder alternative, which I think is the truth: he was duped.
If you continue to be duped while many people are clearly and patiently explaining to you why and how you are being duped, that's straying into idiot territory.
If my theory is right, he's a double victim--first from Pirate, and second from many of the borrowers who were unsurprisingly only paying high rates to scam/gamble/invest in Pirate (same difference). The only question to my mind is whether he coughs up the loses himself or passes some of the pain to his usurious creditors. If he does the former latter, especially if he tries to spread the loses evenly, I'm not sure I could fault him.
Considering that he could probably run away with everyone's money, claim that it was all lost, and little to nothing would happen, I agree that it's hard to find too much additional fault. It's not like the people who loaned money to him weren't also warned that he was operating with a business model that was vulnerable to default and there were specific warnings that everyone had much more Pirate exposure than they thought they did.
From the point of view of the community, it won't help to have Patrick suffer more. However, if his depositors all suffer at least a bit, that will likely help the community a lot.
