Re: Butterfly Labs CEO 25 Million USD Mail Fraud — A Concise Summary of Evidence

[Syke]

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.

He's not in charge of BFL

He's a part-owner. He may not be the only one in charge, but he's definitely one of them.

[SaltySpitoon]

EVERYONE STOP BUYING BFL PRODUCTS!

I have undoubted proof that BFL WILL NOT deliver their ASIC products!

The evidence is all in this thread:
https://bitcointalk.org/index.php?topic=110513.0

And if you don't want to check out that thread, I'll put the most important quote from the thread below.

There is now approximately 19 hours until the deadline. I have so far received 0 BTC. I promise you that I am a man of my word and that I will use the strongest curse I know to bring down misfortune upon this forum and its posters. It is unfortunate that newbies will suffer as well but that is simply a matter of bad luck. I can say that the more you post here or are involved with this forum the more you will suffer, although those will low post count will also face hardship.

It is not too late to avert this disaster.

Edit: please note that I am aware of the BFL concerns and will be making special mention of them in my dealings with the agents of darkness. Those of you with pre-orders who wish to see them fulfilled should take note.

[Rassah]

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.

He's not in charge of BFL

He's a part-owner. He may not be the only one in charge, but he's definitely one of them.

I'm a part owner of about 500 different companies. I own mutual funds. That doesn't mean I'm in charge or can run off with anyone's money.
Did you read the interview? Again, we just have to take the word of Sonny and the person who did the interview, but for me, anyway, the "standard corporate finance controls are in place" is good enough.

In my personal view it didn't go from "it's a scam" to "it's legit," either.
It didn't start out with "it's a scam," it started out with "BFL is employing someone with a criminal background in an unknown job function," and that is ALL anyone knew about this. Sonny being the CEO, being in charge, violating his parole by accepting funds directly, or having control of the money or company and able to run off with anything, was never anything but speculation.
That "unknown job function" changed to "He's not the CEO, or in control of money, and all funds are protected using standard corporate controls and business banking practices," which, to me, means Sonny's past history, or current involvement, is irrelevant.

However, this only means that I can trust this business as much as I can trust any other online hardware business that has a history of selling products.

[the_thing]

In my personal view it didn't go from "it's a scam" to "it's legit," either.
It didn't start out with "it's a scam," it started out with "BFL is employing someone with a criminal background in an unknown job function," and that is ALL anyone knew about this. Sonny being the CEO, being in charge, violating his parole by accepting funds directly, or having control of the money or company and able to run off with anything, was never anything but speculation.
That "unknown job function" changed to "He's not the CEO, or in control of money, and all funds are protected using standard corporate controls and business banking practices," which, to me, means Sonny's past history, or current involvement, is irrelevant.

However, this only means that I can trust this business as much as I can trust any other online hardware business that has a history of selling products.

I'm sorry, but your carelessness worries me. I don't understand how you can trust a scammer just because he said something in an interview. What did you expect him to do? Of course he tried to refute all accusations (saying that he's not the CEO and he doesn't handle money in BFL etc). He would be a poor scammer if he didn't. If I was a scammer, I'd do the same thing.

Yes, there is a non-zero chance that BFL is legit. It is up to everyone to decide how high this chance is, but after everything that happend in this community, I'd expect long time members to be more careful.

[Syke]

He's a part-owner. He may not be the only one in charge, but he's definitely one of them.

I'm a part owner of about 500 different companies. I own mutual funds.

You're really going to compare owning a few shares in a public company to being an owner of a private company? How many of those 500 companies have added your signature to their bank account signature card?

That doesn't mean I'm in charge or can run off with anyone's money.

You're right, since you have no access to their bank account.

Did you read the interview? Again, we just have to take the word of Sonny and the person who did the interview, but for me, anyway, the "standard corporate finance controls are in place" is good enough.

Owners of private companies have great leaway in what they can do.

BFL can answer these simple questions:

Does Sonny have any access to the BFL bank account (i.e. is his signature on the signature card)?

Can Sonny sign corporate checks?

[niko]

Does sonny have access to millions that have not been recovered from the scam, and is he using bfl to launder the money?

[repentance]

BFL can answer these simple questions:

Does Sonny have any access to the BFL bank account (i.e. is his signature on the signature card)?

Can Sonny sign corporate checks?

A "no" to those questions doesn't mean the company won't pay any bills Sonny wants paid or make money available to him through loans, drawings or other means on request.  There are plenty of ways to get funds out of a small, privately owned business without signing the cheques yourself.

Honestly, the information is out there.  If people choose not to evaluate it in depth, then that's their problem and they don't get to cry foul down the track if BFL doesn't deliver what it promised.  From this point on, no-one can say that they didn't have the opportunity to make informed decisions and there's nothing to be gained from trying to persuade people to make any given choice.

Does sonny have access to millions that have not been recovered from the scam, and is he using bfl to launder the money?

Given the amount of time the scam lasted and the number of people involved in it, there's a good chance that those millions were spent a long time ago.

[Rassah]

@the_thing Before I only had BFL to base my trust on. Now it's based on BFL, Sonny, Inaba, and David Perry. I happen to believe David more than any of the other previous names. Also, I have not preordered yet, but am planning on buying, so I'm in a neutral position here, not stuck wishing my preorder will be honored, nor wishing BFL will fail because I'm rooting for competitors.

You're really going to compare owning a few shares in a public company to being an owner of a private company? How many of those 500 companies have added your signature to their bank account signature card?

Irrelevant, unless you have proof that Sonny has signature power.

That doesn't mean I'm in charge or can run off with anyone's money.

You're right, since you have no access to their bank account.

According to the statements, Sonny doesn't have access to the bank account, either. Though we only have his word on that.

Did you read the interview? Again, we just have to take the word of Sonny and the person who did the interview, but for me, anyway, the "standard corporate finance controls are in place" is good enough.

Owners of private companies have great leaway in what they can do.

Taking money from a business owned account that requires more than one signature is not one of them. Sonny never said how much ownership share he had. It may be small enough that he doesn't have much say if what the company does. We just don't know.

BFL can answer these simple questions:

Does Sonny have any access to the BFL bank account (i.e. is his signature on the signature card)?

Can Sonny sign corporate checks?

In the interview it was stated that two signatures are required, so Sonny doesn't have access and can't sign by himself. But that was Sonny's own statement. The question is WHO is it, specifically, that needs to state the answers to these questions, that you trust enough to believe?

[elux]

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/

Not often one reads an interview that doesn't feature a single word from the interviewee.

[repentance]

In the interview it was stated that two signatures are required, so Sonny doesn't have access and can't sign by himself. But that was Sonny's own statement. The question is WHO is it, specifically, that needs to state the answers to these questions, that you trust enough to believe?

I think Rassah has pretty much nailed it.  Those who believe leopards don't can't their spots (or at least no in such a short time) are going to believe that Sonny would surround himself with shady people in any new venture and so not take the word of anyone associated with him, so assurances from others involved in BFL are going to be pretty meaningless to them.  Those who have absolute faith in BFL aren't going to be convinced otherwise by arguments about Sonny's past transgressions.

People need to decide their own risk tolerance here.  Nobody gets a prize for persuading someone to "change sides".

[elux]

I think Rassah has pretty much nailed it.  Those who believe leopards don't can't their spots (or at least no in such a short time) are going to believe that Sonny would surround himself with shady people in any new venture and so not take the word of anyone associated with him, so assurances from others involved in BFL are going to be pretty meaningless to them.  Those who have absolute faith in BFL aren't going to be convinced otherwise by arguments about Sonny's past transgressions.

Sonny Vleisides has supposedly - albeit according to sworn testimony - lied to previous employees of his businesses about the nature of the business:

18. When interviewed, PJ and Michael Swink stated the following:

a.   PJ Swink stated that her company, Western Internet, worked for Sonny VLEISIDES. The work PJ Swink did for VLEISIDES included printing as well as stuffing and mailing envelopes. VLEISIDES gave her instructions regarding the preparing, printing, and mailing of lottery solicitations.

b.   PJ Swink was unaware of the exact name of VLEISIDES' company, because it has had multiple names over the years. Based on conversations and other communications with VLEISIDES over the years, she believed "The Shamrock Agency" and "World Expert" were companies related to VLEISIDES. She believed VLEISIDES also used the name "Atlas Informaticos." Michael Swink stated that VLEISIDES told him that VLEISIDES was a licensed broker for these companies in Europe. PJ Swink and Michael Swink have met VLEISIDES in person.

Not sure what, if anything, can be inferred from this, as the Swinks would clearly gain from pleading ignorance.

20. Henry Walther, who has pled guilty to one count of mail fraud and one count of money laundering and is cooperating with the United States government, stated the following when interviewed:

a. Henry Walther explained that the main people involved in the lottery were Houston, VLEISIDES, and Dennis Emmett. The business started with Houston and Emmett. Houston was the principal behind it. Cloud is Houston's brother or halfbrother, and lives in Amsterdam.

Is CLOUD a different uncle than the Chris (Not Sonny) Vleisides, President of Butterfly Labs?

[Syke]

Irrelevant, unless you have proof that Sonny has signature power.

Most founders/owners of companies do have such power. I ask that he confirm/deny it.

According to the statements, Sonny doesn't have access to the bank account, either. Though we only have his word on that.

Which statements?

In the interview it was stated that two signatures are required, so Sonny doesn't have access and can't sign by himself. But that was Sonny's own statement.

Where did he state he no access?

[fcmatt]

Bitcoin seems to attract skuz like a moth to a flame.

[Rassah]

Irrelevant, unless you have proof that Sonny has signature power.

Most founders/owners of companies do have such power. I ask that he confirm/deny it.

Amount of power, in most companies, depends on how much of the company you own. Sonny supposedly does not hold majority ownership, and thus only has the power to suggest and state his wishes, not make decisions. But it doesn't matter if he confirms or denies it, because you still have to take his word for it.

According to the statements, Sonny doesn't have access to the bank account, either. Though we only have his word on that.

In the interview it was stated that two signatures are required, so Sonny doesn't have access and can't sign by himself. But that was Sonny's own statement.

Which statements?


Where did he state he no access?

In the interview, this quote:

Quite important sub-point: One bit of the inner workings of BFL that I explicitly got permission to publish is that almost all bitcoins received via bitpay for preorders etc. are converted to USD by bitpay and deposited into BFL's bank account. This is important because that account is a corporate account with per-user limits, multi-signature requirements and all the standard protections enforced by the bank that keep the CEO of any company from emptying the company's bank account.

[repentance]

I think Rassah has pretty much nailed it.  Those who believe leopards don't can't change their spots (or at least no in such a short time) are going to believe that Sonny would surround himself with shady people in any new venture and so not take the word of anyone associated with him, so assurances from others involved in BFL are going to be pretty meaningless to them.  Those who have absolute faith in BFL aren't going to be convinced otherwise by arguments about Sonny's past transgressions.

Sonny Vleisides has supposedly - albeit according to sworn testimony - lied to previous employees of his businesses about the nature of the business:

18. When interviewed, PJ and Michael Swink stated the following:

a.   PJ Swink stated that her company, Western Internet, worked for Sonny VLEISIDES. The work PJ Swink did for VLEISIDES included printing as well as stuffing and mailing envelopes. VLEISIDES gave her instructions regarding the preparing, printing, and mailing of lottery solicitations.

b.   PJ Swink was unaware of the exact name of VLEISIDES' company, because it has had multiple names over the years. Based on conversations and other communications with VLEISIDES over the years, she believed "The Shamrock Agency" and "World Expert" were companies related to VLEISIDES. She believed VLEISIDES also used the name "Atlas Informaticos." Michael Swink stated that VLEISIDES told him that VLEISIDES was a licensed broker for these companies in Europe. PJ Swink and Michael Swink have met VLEISIDES in person.

Not sure what, if anything, can be inferred from this, as the Swinks would clearly gain from pleading ignorance.

20. Henry Walther, who has pled guilty to one count of mail fraud and one count of money laundering and is cooperating with the United States government, stated the following when interviewed:

a. Henry Walther explained that the main people involved in the lottery were Houston, VLEISIDES, and Dennis Emmett. The business started with Houston and Emmett. Houston was the principal behind it. Cloud is Houston's brother or halfbrother, and lives in Amsterdam.

Is CLOUD a different uncle than the Chris (Not Sonny) Vleisides, President of Butterfly Labs?

There's a lot in the documents related to Sonny's past which is incredibly damning and very much at odds with explanations given by Sonny and BFL employees.  But you can't force people to read those documents and nor are you ever going to convince those who believe there was a "government conspiracy" otherwise.

I find it highly unlikely that President/Director Chris is not entirely aware of Sonny's past transgressions, including all of the evidence presented in the indictment.  Yes, it's possible that other directors (if any) have been lied to, but I wouldn't count on it.  If you're a legitimate company, you need all of your directors to be legitimate.  If you're shady, you need all of your directors to be shady.  Whether BFL is legitimate or shady, I suspect that the directors are well aware of Sonny's past - there's just too much potential for grief if they weren't, especially when seeking outside investment.

Swink wasn't an employee and I wouldn't normally expect a contractor doing printing and mail-out work for a company to do much in the way of checking their client's bona fides much less verifying the accuracy of any information contained in the documents they were printing.  Maybe they did know, but plenty of people and small businesses will never verify information given to them about the entities with which they do business - if it sounds remotely plausible, they'll just accept it at face value, especially if those giving the information appear to be prosperous.

People will know soon enough whether BFL can deliver the first run of ASICs on time and to the standard promised.  Their lead time over competitors is not so great that they can afford a major fuck up on either delivery or performance.  

[Desolator]

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

They were objecting to the ubiquitous CCTVs in London & I think also to facial recognition software that may run on them.

Oooh, I would so do that!  I forgot, they're turning it into skynet meets 1984 lol.  Well, british people are pretty darn weird so I feel like people should keep an eye on them too but if I was over there, we're going 100% invisible man get-up.

Also, other dude above me...you misunderstand internet arguments

[Raize]

@Raize: what specifically are you referring to when you say "imply something that doesn't exist"?

Specifically that this company that is making money and hiring staff is definitely a long con run by some con artist who has publicly-divulged info about his past. Some people seem to be under the impression it already is a con while others of us are merely skeptical that the timeline is going to be met, power requirements will be reasonable, and etc. BFL is clearly shipping products despite being under Sonny's supervision. Occam's Razor tells us that if increased orders were coming in to justify custom-ASIC, that is the avenue they would pursue. BFL appears to be more than just Sonny, a lesson that even I have learned.

Yeah, right. People always see the light.

This is definitely NOT what I am saying. We all have people that we just can't trust with certain things in our lives, even if it is family or close friends. We still trust them with other stuff.

Did you ever see the history channel show about him? "If I had to do it all over again today, I would".

Of course he would, it's what made him who he is. Junior ran moonshine, and frankly I don't think most of the people on this forum would find that anywhere near equivalent to scamming in the current environment. I certainly don't. Now he sells it legitimately, so it's a moot point.

Holy crap you have michael vick on your list? Dirtbag to the Nth degree still.

I'm curious as to what your opinion is on this:
http://sports.espn.go.com/nfl/news/story?id=5967015

History is even fuller of people who have had some moral faults and never turned their life around.
It makes me wonder why you choose to ignore this fact.

I'm not.

Again, I would like to know what specifically you are referring to in this thread when you say "implying something that doesn't exist"- the documents, the inconsistencies in statements, what?
 Ley's try and stay on topic. You've see the title and the OP, right? What do you think?

I'm trying to stop, if you'll excuse my language for a second here, shit like this:

Does sonny have access to millions that have not been recovered from the scam, and is he using bfl to launder the money?

Clearly, you are a sock puppet.

To clarify, I'm responding to the accusations of people that have already decided this is a scam. It's not even October yet. You'll notice I've been harshly critical of BFL as well, but it's been on pretty obvious Bitcoin-related things other than the CEO's history.

First, I don't like the lack of a timeline or even an estimation of these things. Some of this is explainable, but they set a date of "October" and we still have like zero information about it.

Second, I don't like that they don't have the power numbers down to even a general estimate (we know the Jalepeno isn't likely to require 1.21 gigawatts, but they won't even give a ballpark). And actually, if they are this far along that they'll be able to deliver a product by October 31st, they really probably should have these numbers.

niko, you could put your money where your mouth is on BFL's honesty. Make your accusation in the form of a bet. Otherwise it is kind of irrelevant because we can't punish you when you turn out wrong.

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.

It's doubly bad that this is happening to them yet again which may incline them to release even less info and get more customers that feel like they've been duped. "PR Nightmare" is what they call these things.

I'm just glad "BFL official" forum accounts have not been trolling back, at least that lesson seems to have been learned, just like my aforementioned belief that BFL was one person.

We really need some sort of "ratings" companies or something that build trust and audit organizations on the details that matter and provide an independent review of organizations that your average newcomer can trust. They could fund themselves with a monthly fee so that they can operate, and so that your average scammer isn't going to bother using them and the ones with the long cons will still be exposing themselves to the audit.

[Inaba]

Our Super Rig SC uses 1.21 jiggawatts, though.  Just FYI.

[Jutarul]

Our Super Rig SC uses 1.21 jiggawatts, though.  Just FYI.

http://www.youtube.com/watch?feature=fvwp&NR=1&v=I5cYgRnfFDA

[Raize]

Our Super Rig SC uses 1.21 jiggawatts, though.  Just FYI.

Good thing you posted that under your normal account. Otherwise, from the sounds of how strictly people view BFL, there'd be a lot of people redesigning their datacenters to catch lightning bolts...