Essentially, Pirate can pay everyone back or he can run off with somewhere in the neighborhood of 3 million dollars. This is pretty much the way it is regardless of whether Pirate was running a ponzi scheme or not.
Of course, if he's running a ponzi scheme he almost certainly doesn't have the option to pay everyone back because he doesn't have enough funds. His only options are to carry it on to the bitter end and default without making any money or to default before he's exhausted his reserves and run away with the rest.