This is why I'm such a strong advocate for multisig escrow. We really need to make it the norm and get tools for it make it easier to use so even the most 'trusted' escrows can't run off with money. With first master-p and now this it's showing impossible to trust anybody in the bitcoin world as something besides an arbitrator. Granted that they could still work with one user to scam, but at least that would be a bit harder to pull off.
Wasn't he going to use the proceeds of a sig campaign to reimburse Master-P's victims or something like that? Seems like he was mixing honesty with extreme dishonesty. Perplexing.
I think we fell into his trap by thinking that he had good intentions. By having such a large amount of trust and being one of the 'best' members in the Bitcoin community, he was probably able to make large trades with ease and not have people question him. We don't know how much he moved online and IRL, but most people probably wouldn't have batted an eye if he popped up with a ton of money to turn into BTC.
Neither providing escrow nor using a sig campaign costed him anything, so he was making free reputation that could be cashed out with his illegitimate funds. Smart as fuck.