Topic: Re: Butterfly Labs CEO 25 Million USD Mail Fraud — A Concise Summary of Evidence - page 25. (Read 146793 times)

The answer seems to be: almost no money was recovered. Makes me wonder about the origin of "VC" investment, and how it brought Sonny to be in charge of BFL.

Just lining up more pieces:

http://www.scribd.com/doc/106409576/Indictment-USA-v-Vleisides-Houston-Emmett-Cloud-Walther

This one is interesting:


http://www.scribd.com/doc/106409553/Judgment-probation-order

(snip)

I cannot figure it out, but hopefully some can: how much of the alleged 25M has been recovered?

Now that the hardware exists, the CEO seems nice, we ran out of suspicious stuff to suspicify about on the forum about BFL!  Okay, I've got more, lol

CAUTION: the following post may cause your head to explode if your username is Inaba

It looks like all products use their own proprietary mining software that BFL wrote.  With such a custom interface on such a custom chip, I bet it'd take months for anyone to write an alternate mining software but they'd have no reason to.  So who says their software isn't rigged to wait 2 months post-release then steal your wallet file if it's not encrypted?  Or steal your miner account pass which may be the same as your pool account pass?  Or kidnap all your "best of" lolcat photos and hold them hostage!  Or install a browser plugin that tries to sell you group lottery ticket pool buy-ins? (Too soon? Hell no, lol)

I would take a guess that their software is about as open source as iOS lol.

It looks like all products use their own proprietary mining software that BFL wrote.  With such a custom interface on such a custom chip, I bet it'd take months for anyone to write an alternate mining software but they'd have no reason to.  So who says their software isn't rigged to wait 2 months post-release then steal your wallet file if it's not encrypted?  Or steal your miner account pass which may be the same as your pool account pass?  Or kidnap all your "best of" lolcat photos and hold them hostage!  Or install a browser plugin that tries to sell you group lottery ticket pool buy-ins? (Too soon? Hell no, lol)

Coming soon:

• FPGA Mining X6500
• Butterfly Labs's BitForce SC (ASIC) product line
• BTCFPGA's bASIC
• ASICMINER ASICs
• any other device provided for development (PM me)

Generally, it's standard practice for companies to have financial controls in place, unless they are very small or family privately owned. Since there is implication that the company ownership is shared among a few people (Sonny mentioned he was not the majority owner), all we really need to know is if they do have some financial control systems or not. Doesn't matter what the specifics are. And if they have financial controls, then Sonny's entire background is totally irrelevant.

If anyone cares, I had an interview with Sonny last night in which we discussed this whole mess.

http://codinginmysleep.com/interview-with-sonny-vleisides/

I don't think any company would reveal to anyone other than their accountants how their financial control system works. So this will continue to be speculation forever I imagine.

RESTITUTION:Pursuant to 18 U.S.C. § 3663A(c)(3), restitution is not ordered because (1) the number of identifiable victims is so large as to make restitution impracticable [3663A(c)(3)(A)]; and (2) determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process [3663A(c)(3)(B)].

Through companies located in Costa Rica, The Netherlands and other places, the defendants allegedly mailed more than 1 million solicitations that fraudulently offered people an increased chance of winning foreign and domestic lotteries such as “The Australian Lottery,” “The International Irish Sweepstakes,” and “The NY Super 7.” The solicitations claimed that people could purchase “positions” in lotteries that would be grouped together, or pooled, to buy larger blocks of tickets in a given lottery or horse race. The solicitations falsely indicated that participants in the pool had a nearly guaranteed chance to win millions of dollars and that previous participants in the pool had already won millions of dollars. According to the indictment, the solicitations misrepresented that the companies were backed by governmental or legitimate lottery entities. As part of the scheme, the solicitations claimed that winnings were invested into trust or pension accounts that would pay monthly pension checks until the end of the victim’s life, and then would pay a survivor’s benefit as if the money were a life insurance policy.

Victims of the scheme were directed to send their money to mail drops in Ireland, The Netherlands and other locations, where participants in the scheme returned the money to the United States. From domestic bank accounts controlled by Henry Walther and others, some of the money was sent back to victims who were told that they were receiving “winnings,” even though the “winnings” were far less than the amount of money sent in by victims. The rest of the money was either spent to further the scheme or to enrich the defendants. Investigators estimate that victims lost approximately $20 million during the scheme, which ran for more than 15 years until it was shut down by federal agents in July 2006.

“This investigation brought an end to an elaborate scheme in which the perpetrators relied on the public's trust in the U.S. Mail to victimize some of our most vulnerable citizens, our seniors,” said Acting Inspector in Charge Robert Malaby. “Whether it's a pension fraud scheme or an illegal foreign lottery, when the U.S. Mail is used to commit fraud, Postal Inspectors are called upon to investigate and bring the perpetrators to justice. The U.S. Postal Inspection Service is committed to keeping our nation's mail system free from criminal misuse."

Debra D. King, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation Division in Los Angeles, stated: “The fraud committed by these individuals against innocent investors in the operation of their foreign lottery and pension schemes is a crime that IRS-Criminal Investigation takes seriously. This indictment, and the arrests of the perpetrators of this fraud, is indicative of our resolve to bring those who prey upon innocent investors, for their own financial gain, to justice.”

The 23 counts in the indictment carry a maximum statutory penalty of 460 years in federal prison and fines of up to $8.75 million.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.

I am starting to wonder why any bitcoin related company would provide a presence on this trollpit - it's gotta be worse for business to announce on this forum, than to simply ignore bitcointalk.

Are you new here or just stupid?  First of all, Inaba is an ass with a bad attitude regardless of anything else.  Second, every other business announced on this forum is a scam.  So when the biggest bitcoin hardware operation ever gets announced and someone finds out the owner was convicted of large scale fraud, wooooooo, it's my birthday.  Shockingly it appears to have been a false alarm but if you think we're all being "mean" or whatever by investigating it and insulting them for hiding it and being so secretive about everything, you have no idea how the bitcoin community works.

That is unfounded speculation, nothing more. We were told the money is held by the company, not Sonny himself.

I guess the next question would be, if the money IS held in a company bank account, does it require two signatures on the check to be spent, or is it still entirely under Sonny's control? (Until Innaba answers this, any claims will continue to be speculation).

Yeah, right. People always see the light. Having Sonny Vleisides watching over ten million dollars is like hiring Charles Manson as a baby sitter when he gets released from prison. Good luck with that. 

With the common level of idiocy around this forum, I can't understand how Inaba is continuing to remain so polite to you morons. (I'm pretty sure the moroncy starts at the top around here, not much to be done about it, I'm afraid)

I am starting to wonder why any bitcoin related company would provide a presence on this trollpit - it's gotta be worse for business to announce on this forum, than to simply ignore bitcointalk.
 
Inaba, as stated above, you can't reason someone out of a position they've not reasoned themselves into.

Okay, I have to ask about pic 2....anti-disease measures, some engineering/modding/don't breathe this stuff thing, or anonymity devices?