Archive for November, 2007
Fri 16 November 07 · Filed under Fraud News Stories
Yesterday I wrote a letter to Mark Shurtleff, Utah’s Attorney General, urging him to issue a public apology to Sam Antar. Last week, Mr. Shurtleff wrote a letter to Overstock.com (which Overstock and Patrick Byrne later attached to a press release). That letter was defamatory and embarrassing for Sam, and Shurtleff should not have written it.
While Mr. Attorney General did offer me the courtesy of a response to my letter, he says he will not apologize for the original letter he wrote.
Another individual wrote to Mr. Shurtleff, and he responded directly to her email and copied me in:
Dear Ms. xxxxxxxx,
Thank you for your inquiry. I was not aware they had issued a press release but when I sent them my letter I authorized it’s dissemination. It would not have been necessary had Mr. Antar allowed my comments to be posted on his blog.
I have no interest in getting involved in a private dispute. However, I will not allow anyone to improperly use me or my office to bolster their side of a private matter. We invited Mr. Antar to speak because we believed we could learn from his criminal expolits. He was asked not to use that invitation in any way in his dispute with Overstock or Byrne. I would not have taken exception had Mr. Antar noted his appearance at our conference in a blog entry seperate and apart from his attacks on Overstock. When my effort to clarify by posting a comment was rejected by Mr. Antar, I felt a letter was appropriate.
Sincerely,
Mark Shurtleff
I responded:
With all due respect, why did you not contact Mr. Antar directly before issuing such a letter?
He says the comments were never received on the blog, and I believe him. Prior to issuing such an inflammatory and distorted letter, did he not deserve the courtesy of a direct contact from you via telephone and/or email?
I am quite confident that if you had contacted Sam, he would have worked with you to resolved this issue to your satisfaction. I’m not sure why you chose to try to embarrass him in the way, with a complete mischaracterization of his comments about your conference, but it reflects poorly on you and your staff.
Will you be issuing an apology to him?
Tracy Coenen
Shurtleff replied:
Why are you writing to me instead of Mr. Antar? When I posted my comments I received the following notice: “Your comment has been saved and will be visable after blog owner approval.” Why didn’t Mr. Antar contact me and discuss it? There is nothing untrue or inacuurate in my letter. Therefore no apology is necessary. Thank you for your interest.
I countered:
What a classy way to handle this. Sam did not receive those blog comments. Do you not consider the fact that technology is imperfect?
Why would you not contact him directly - via email or telephone - as all other professionals conduct business? Was Sam invited to speak at your conference via a comment on his blog? Or was he contacted directly?
Your characterization of Sam’s blog post is inaccurate, and you know it. You could save face by issuing an apology and acknowledging that this was a misunderstanding. Sam would have been (and probably still would be) open to resolving this issue with you personally. He did not use this speaking engagement to promote his agenda. He merely used it as context for his presence in Utah.
I urge you to reconsider issuing an apology. You have an opportunity to right your wrong, and encourage you to do the right thing.
As expected, Shurtleff did not reply to this email.
I have several concerns:
- Shurtleff is the chief law enforcement officer of Utah. He involved himself in the dispute between Patrick Byrne (a campaign contributor of his) and Sam Antar. Even though he disclaims wanting to be involved in a “private matter,” he injects himself squarely into it. Is this appropriate for a law enforcement official to do when Patrick Byrne and Overstock.com are being investigated by the SEC?
- Prior to issuing this letter to Overstock, Shurtleff or someone from his office could have contacted Sam directly. Instead, Shurtleff left a comment on Sam’s blog. Even if Sam had received notice of the comment in a timely fashion, would he have been able to verify the authenticity of it?
- When Sam was invited to give a gratis presentation (not even being reimbursed for travel costs), was it done with a blog comment? Or was it done via a direct communication over the phone or in an email? Why didn’t Shurtleff contact Sam directly in regard to this matter? If a direct contact was good enough for the invitation to speak, it is surely good enough to resolve a blog issue.
- Had Shurtleff or someone from his office contacted Sam directly, I am confident that Sam would have worked with them to resolve the matter immediately. There was no need to handle it this way.
It should also be noted that while Shurtleff tries to paint Sam’s presentation in a negative light, other personnel in his office (specifically Chief Deputy Attorney General Kirk Torgensen) were apparently quite pleased with the presentation.
Thu 15 November 07 · Filed under Pyramid Schemes & MLM
Herbalife’s (NYSE:HLF) CEO Michael Johnson and CFO Richard Goudis contradict one another’s figures.
Fraud Discovery Institute (FDI) issues the following statement about its review of Herbalife (NYSE:HLF) presentations by CEO Michael Johnson and CFO Richard Goudis.
First, on November 7, 2007, Herbalife CEO Michael Johnson defended allegations that over 90 percent of Herbalife distributors fail by stating: “We believe that 58 percent are discount buyers, that 22 percent are small retailers and customers, and that 20 percent are potentially future supervisors. Let me repeat that - 1.3 million distributors based on average order sizes, we believe that 58 percent are discount buyers, 22 percent are small retailers and 20 percent are potentially future supervisors.” (Quote from Seeking Alpha transcript)
However, on November 14, one week later to the very day, the figures that were repeated with the, “Let me repeat,” assurance by CEO Johnson, Herbalife CFO Richard Goudis changed the discount buyer to 52 percent in slide 15 of his presentation at Morgan Stanley. Asks FDI’s Barry Minkow, “What happened to those discount buyers from 2006 within that seven-day period from November 7, 2007, to November 14, 2007?” [Read more...]
Thu 15 November 07 · Filed under Fraud News Stories
Sam Antar posted this on his blog today regarding Mark Shurtleff’s letter about Sam. He says he just received notification from blogger.com TODAY that there was a comment waiting for approval by him. I reiterate my earlier concern: Why didn’t Shurtleff contact him directly via phone or email?
Blog Update Note (11/15/07): I received the following request from Utah Attorney General Mark Shurtleff to post a comment on my blog today. In a letter addressed to “to whom it may concern,” dated November 8, 2007, written by Mark Shurtleff, Utah Attorney General, and released by Overstock.com through a press release on November 14, 2007, he claimed:
I tried to post this letter as a comment on Mr. Antar’s blog but Mr. Antar apparently refused to post it.
However, I just received Mr. Shurtleff’s comment today and posted it. Please note the date and time of the email.
I will respond to Mark Shurlteff soon. In the mean time, keep speculating.
From: mshurtleff [mailto:noreply-comment@blogger.com]Sent: Thursday, November 15, 2007 11:41 AM
To: sam@whitecollarfraud.com
Subject: [White Collar Fraud] New comment on Overstock.com CEO Patrick Byrne Continues to Dodge….
mshurtleff has left a new comment on your post “Overstock.com CEO Patrick Byrne Continues to Dodge…”:
As Utah Attorney General, I am commenting on this post to clarify why Sam Antar was invited to speak at our 14th Annual White Collar Crime Conference, <snip>
Thu 15 November 07 · Filed under Fraud News Stories
Dear Mr. Shurtleff,
I am writing to you today to request that you issue a public apology to Sam Antar for the defamatory and untrue letter you recently sent to Overstock.com regarding Mr. Antar.
Mr. Antar agreed to present at your White Collar Crime Conference at no cost to you, and he even paid for his own travel expenses. He took time out of his professional career to train your staff, and the disrespectful and defamatory letter you issued regarding the training was shameful.
Yesterday, Overstock.com and their CEO Patrick Byrne made your letter to them public. I was shocked and dismayed at the factual inaccuracies in your letter, as well as your attempt to cast Mr. Antar in a very negative light. [Read more...]
Thu 15 November 07 · Filed under Fraud News Stories
Yesterday, Patrick Byrne and Overstock.com issued a press release regarding a recent speaking engagement done by Sam Antar. The Utah Attorney General’s office invited Sam to speak at their annual White Collar Fraud Conference on October 31.
As with all of Sam’s speaking engagements, he received no fee and he paid for his own travel costs. He does many of these speaking engagements around the country, and he pays all of his own expenses, which surely total at least tens of thousands of dollars each year.
The press release issued by Overstock and Byrne was part of the ongoing battle between him and Sam, as Sam questions the unusual accounting practices and financial statement disclosures at Overstock. (Yes, I too, question the financial statements of the company and in my opinion, something is fishy there.)
The Overstock press release related to a letter written by Utah Attorney General Mark Shurtleff, and said, in part: [Read more...]
Wed 14 November 07 · Filed under Pyramid Schemes & MLM
Google search:
Herbalife SEC investigation
Answer:
Yes! The SEC is formally investigating stock sales by a former middle management employee of Herbalife (NYSE: HLF). Following Barry Minkow’s release of his Doomed by Design video and report, the SEC has also reportedly begun an informal investigation regarding issues cited in the report.
Wed 14 November 07 · Filed under Pyramid Schemes & MLM
As previously reported, Bradford Richardson, Usana’s Executive VP of Asia Pacific has been doing some serious dumping of his Usana (NYSE: USNA) stock. Now that his stock is gone, it looks like he’s been exercising options and dumping those shares as well. He’s up to $2.4 million… what a nice payday!
Here’s the latest tally:
Oh, and for those who haven’t been following… Barry Minkow and Fraud Discovery Institute produced a damaging report on October 18 about Usana’s illegal activities in China. The report revealed that Usana corporate employees in Hong Kong are helping (and encouraging) Chinese nationals to sign up for Usana and recruit more Chinese nationals. China’s law prohibits this.
It’s my theory that Usana is letting Richardson get all his money out, and then he will be the sacrificial lamb. Dave Wentz and Gil Fuller will blame Richardson for all of the China problems, say they knew nothing of his transgressions in China, “fire” him with a flourish, and vow to continue working ethically. (They still refer to themselves as ethical after numerous revelations about faked credentials and other falsified information given to the public.)
Wed 14 November 07 · Filed under Writing & Blogging
A few months ago, I wrote a series on this blog about my experience getting my first book published. I was hoping to inspire some other professionals out there who might be thinking about writing a book of their own, and from the emails I received, it looks like it worked!
I submitted my final manuscript for Essentials of Corporate Fraud in September, and so a lot of my work is done until the book is actually out. But here’s what is happening in the meantime, the deadlines associated with it all, and my part in the production process.
- The manuscript was evaluated by Wiley personnel and determined that it was ready for production, and off it went to a production manager who assigned a production editor.
- A copyeditor was assigned, and she edited the manuscript for a consistent style. She also made sure that everything was understandable.
- Manuscript came back to me for a check of edit. I read everything to make sure that none of the edits changed the meaning of the material. I also answered any questions the copyeditor had. Here’s the important point: Once this is finished by me, I can’t add any content to the book. So as I was reading the manuscript, I added a few paragraphs to sections that I felt needed a little more. (It’s amazing the clarity you get when you step away from the book for a while and then come back.) But after this, any additional material costs Wiley big bucks to insert, so it is forbidden.
- The Wiley production editor reviews the manuscript and sends it for typesetting.
- I create an index of terms and their corresponding typeset page numbers.
- The typeset manuscript (also called pageproofs) is sent to me for final review. I am looking for any remaining typos or punctuation errors. At this time, a proofreader is also doing the same thing.
- Pageproofs and index are sent back to Wiley’s production editor, who makes the necessary corrections and does one final review of the book.
That’s it! Then the book is sent to the printer and it is published! Really, I’ve done all the hard work already.
Now onto promoting the book. That will take a lot of time, but I don’t mind at all. That’s the stuff I really like doing, and I’ll talk about that process in another post.
Tue 13 November 07 · Filed under Fraud News Stories
When 84% of small business owners report being concerned about online fraud issues, there is a clear need to educate . That’s why the Association of Certified Fraud Examiners (ACFE) has organized National Fraud Awareness Week from November 11-17.
As a supporter of Fraud Awareness Week, SunTrust Banks has partnered with the National Small Business Association (NSBA) in the “Foil Fraud” survey to understand the pain point of fraud in small business and to educate small business owners about prevention.
Among the survey findings:
- 84% of small business owners are concerned about fraud in connection to their business finances.
- Although online identity theft topped the list of concerns (65 percent), check fraud (45 percent) and credit card fraud (52 percent) were the most frequently experienced types of fraud.
- With fraud striking small businesses an average of six times, it is apparent that fraud is a detriment to the livelihood of a small business—resulting in tens of thousands of dollars in losses.
- Of the 82 percent of small business owners stating they wanted banks to offer more help in fighting against fraud, 46 percent were either unsure or reported that their bank does not offer online fraud detection services.
For more information, please visit www.suntrust.com/foilfraud.
Mon 12 November 07 · Filed under Fraud News Stories
I’m generally a fan of Starbucks. They have overpriced coffee and it’s not my favorite, but it is convenient and they have built a fantastic business operation that I admire in many ways.
But this is just silly. According to Consumerist, Starbucks is suing a Michigan coffee shop called Conga for trademark infringement, and it’s all about the green circle. Conga has reportedly been using their logo for 11 years, but Starbucks just decided that it’s confusing and infringing.
Now I’m sorry, but that green circle Starbucks uses as part of its logo is pretty generic. The real part of their logo that is distinctive is the woman in the center. Conga hasn’t even copied anything about the logo - not the font, not the stars, not the image in the center.
But somehow the suits at Starbucks are convinced that people visiting Conga in Michigan might be confused and might think they’re walking into a Starbucks. Give me a break!
Compare the logos:
Sorry. I’m all in favor of protecting corporate intellectual property and identities and such, but Starbucks has this one all wrong. I sure hope that when they realize it, they’re kind enough to pay the legal fees of Conga for such a silly claim.
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