Bryan Micon's Butterfly Labs Scammer Investigation including Josh Zerlan

[darkmule]

Another satisfied customer: https://forums.butterflylabs.com/post-sales-customer-service/7588-bfl-you-joking-me-order-100091147-a.html

Dear BFL,

I feel like you are joking with me.

-I've placed my order on 4th Dicember - Order #100091147. The 50 Gh/s Bitcoin Miner was labeled "IN STOCK - IMMEDIATE SHIPMENT". This is the main reason i choose to order from you. The price was 2.499 dollars.
- No news for a month. Order in status "PRODUCTION": according to you FAQ, this means that the order is currently being manufactured. So IN STOCK, was a fake..
- The same item passed from 2,499 at 989
-On 2th Jan I've received the REFUND EMAIL from you: "if you still feel like your order is taking longer than expected, feel free to request a full refund prior to your order having been shipped." My order was still in status production, so I've emailed you the same day requesting the full refund.
-On 7th Jan I've received notification from you that my order was sent! No response to my refund email. I've sent another email, asking what was going on and requesting again a full refund.
- Today, my order is on is way and i've received a reply to my emails: "All sales are final according to our terms".

Now, i see on this forum you have granted a full refund to someone, after the refund email.

I DON'T WANT the item, I WANT MY MONEY BACK:

- over 30 days from my order, despite the item was labeled as "in Stock, immediate shipment". It's now useless.
- I've sent you a request of full refund, according to your email. The request was sent when my order was in status "production", as you requested.
- The same item is now priced $984.00, down from $2,499.00.


It's all your fault, I've followed your instructions and belived to what you have advertised.
Please settle this down or I'll go through other actions.

Incidentally, this is the kind of case where if there's sufficient documentation of these transactions, you are almost guaranteed to win a small claims action.  Probably by default since these douches won't show up.  Then you can proceed to collections and, if you're interested in doing the paperwork, they'll also have to cough up the costs associated with collecting.

Basically, these creeps are counting on people not going to the inconvenience over a couple grand.  Make them wrong.

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[Searing]

Another satisfied customer: https://forums.butterflylabs.com/post-sales-customer-service/7588-bfl-you-joking-me-order-100091147-a.html

Dear BFL,

I feel like you are joking with me.

-I've placed my order on 4th Dicember - Order #100091147. The 50 Gh/s Bitcoin Miner was labeled "IN STOCK - IMMEDIATE SHIPMENT". This is the main reason i choose to order from you. The price was 2.499 dollars.
- No news for a month. Order in status "PRODUCTION": according to you FAQ, this means that the order is currently being manufactured. So IN STOCK, was a fake..
- The same item passed from 2,499 at 989
-On 2th Jan I've received the REFUND EMAIL from you: "if you still feel like your order is taking longer than expected, feel free to request a full refund prior to your order having been shipped." My order was still in status production, so I've emailed you the same day requesting the full refund.
-On 7th Jan I've received notification from you that my order was sent! No response to my refund email. I've sent another email, asking what was going on and requesting again a full refund.
- Today, my order is on is way and i've received a reply to my emails: "All sales are final according to our terms".

Now, i see on this forum you have granted a full refund to someone, after the refund email.

I DON'T WANT the item, I WANT MY MONEY BACK:

- over 30 days from my order, despite the item was labeled as "in Stock, immediate shipment". It's now useless.
- I've sent you a request of full refund, according to your email. The request was sent when my order was in status "production", as you requested.
- The same item is now priced $984.00, down from $2,499.00.


It's all your fault, I've followed your instructions and belived to what you have advertised.
Please settle this down or I'll go through other actions.

Incidentally, this is the kind of case where if there's sufficient documentation of these transactions, you are almost guaranteed to win a small claims action.  Probably by default since these douches won't show up.  Then you can proceed to collections and, if you're interested in doing the paperwork, they'll also have to cough up the costs associated with collecting.

Basically, these creeps are counting on people not going to the inconvenience over a couple grand.  Make them wrong.

I was told by 3 different people on forums etc that they have WON in small claims court in usa....it went nowhere ..also have had people in fourms say if you are in Europe you have a shot..they have been refunded...for what it is worth

Searing

[frajervitalny]

these guys were obvious.

[KGambler]

Did these scammers ever fulfill their promise of donating 1,000 BTC to charity?

[Syke]

Did these scammers ever fulfill their promise of donating 1,000 BTC to charity?

They donated a small portion of it to charities. They rest they "donated" to themselves.

[Searing]

Did these scammers ever fulfill their promise of donating 1,000 BTC to charity?

They donated a small portion of it to charities. They rest they "donated" to themselves.

this is unfortunately true..check out their FAQ on their page to see how they managed this

Searing

[vayvanne]

Well, I just read through all 27 pages of this disaster of a thread.

Can someone take the time to distill exactly what the "scam" is?

I get that they delayed products a long time and had questionable refund practices during the delay, but is that it? Is there something wrong with the products themselves?

I had to RMA 3 of 5 my miners. One of it was DoA, from another one screw dropped out while unpacking. 4th one is constantly overheating, throttling but it is in 10% limit yet. 3 of 5 PSUs fried. New ATX PSU, downtime losses, RMA postal expenses on me.
And that happy new year letter, congratulating customers that the product they received just a month ago, after 7 months of waiting is reduced now three times.

[V.Kodoff]

If any of you like to start case in European court feel free to contact us.
https://bitcointalk.org/index.php?topic=556208.0

[elux]

So today, there is a very interesting article on ArsTechnica about BFL. (link here)

The TL/DR Version:

1. Sonny had his parole extended for 2 years for breaching it (in reference to BFL).

2. BFL owns the Eclipse Mining Pool (bought in 2012 for $100,000) - Josh/Inaba kinda failed to mention that one...

3. BFL Lawyers set up a dummy corporation in the Bahamas which then gave 'loans' to Nassar ($150,000), VP Jeff Ownby ($26,000), Sonny ($65,000). This is despite the Bahamas company making a lose of $800,000.

4. There was $11,000,000+ in the BFL Paypal account before it was frozen.

5. To date there have been more then 6200 complaints to Paypal.

6. BFL is permanently banned from using Paypal.... by Paypal.

also:

@Inaba

I found this bit interesting.  Care to explain?

One of the noteworthy revelations is that Butterfly Labs acquired a local Kansas-based Bitcoin mining pool, Eclipse Mining Consortium, for $100,000 in 2012. The pool's founder, Josh Zerlan, is now a vice president at BFL. (Zerlan publicly announced that he took a job with BFL in 2012, but he did not mention that he actually sold his company to BFL. Zerlan did not respond to a request for comment for this article.)

Are BFL using your former mining pool to "test" new miners until they are almost totally unprofitable before sending them out? 

To answer your question:

Re: Butterfly Labs Production of Requested Information

(...)

[to] Kate Mahoney, Assistant United States Attorney

(...)

The following information is submitted on behalf of Sonny Vleisides in response to your inquiry regarding various documents and information related to Butterfly Labs and Sonny Vleisides.

(...)

Eclipse Mining Consortium was a website that Butterfly Labs purchased from Josh Zerlan in 2012.

(...)

Butterfly Labs acquired the IP address and website from Mr. Zerlan for 100,000.

(...)

Butterfly Labs earns mining income from their burn testing of machines

Page 3/7: http://www.scribd.com/doc/217190032/Butterfly-Labs-Production-of-Requested-Information-December-6-2013

[Micon]

http://arstechnica.com/tech-policy/2014/09/feds-label-bitcoin-miner-maker-butterfly-labs-as-systematic-deception/

[eoakland]

The only people you find complaining on Bitcointalk for the most part are competitors or known trolls like Entropy, Bicknellski, etc...

To answer your question though: No there is nothing valid they bring to the table that qualifies as a scam. Just angry butt hurt trolls who can't stand the fact that all their idiotic "predictions" and false claims turned out to be lies and they are exposed for what they are. So they try to flood the threads and forum with more junk in hopes that people will forget.

try not to drop the soap beeyotch !

[notbatman]

The only people you find complaining on Bitcointalk for the most part are competitors or known trolls like Entropy, Bicknellski, etc...

To answer your question though: No there is nothing valid they bring to the table that qualifies as a scam. Just angry butt hurt trolls who can't stand the fact that all their idiotic "predictions" and false claims turned out to be lies and they are exposed for what they are. So they try to flood the threads and forum with more junk in hopes that people will forget.

This sounds almost like the crooks at Black Arrow who told the media that I work for an ASIC manufacturer as the reason for deleting my posts. The reporter was in the middle of browsing the thread for his story when BA fired up their auto-deletion bot on my posts and other customers who made too much noise; the thread shrank from 420 to 370 pages.

[Bicknellski]

The only people you find complaining on Bitcointalk for the most part are competitors or known trolls like Entropy, Bicknellski, etc...

To answer your question though: No there is nothing valid they bring to the table that qualifies as a scam. Just angry butt hurt trolls who can't stand the fact that all their idiotic "predictions" and false claims turned out to be lies and they are exposed for what they are. So they try to flood the threads and forum with more junk in hopes that people will forget.

try not to drop the soap beeyotch !

I was right... I was right!....

Mind you so were about 100 other people 12 months before I opened my mouth in 2013.

[eoakland]

The only people you find complaining on Bitcointalk for the most part are competitors or known trolls like Entropy, Bicknellski, etc...

To answer your question though: No there is nothing valid they bring to the table that qualifies as a scam. Just angry butt hurt trolls who can't stand the fact that all their idiotic "predictions" and false claims turned out to be lies and they are exposed for what they are. So they try to flood the threads and forum with more junk in hopes that people will forget.

try not to drop the soap beeyotch !

I was right... I was right!....

Mind you so were about 100 other people 12 months before I opened my mouth in 2013.

i just hope justice gets served.  they stole millions from people who took a leap a faith and wanted to be a part of the bitcoin community.  i purchased a jalapeno at 50 Million difficulty and received it 8 months later at 1 Billion difficulty.  Chinese manufacturers are the fastest at producing anything, so for them to claim it was manufacturing issues is BS.  send each one of those j-cat lames to jail.  

[DarkForces]

They should all do time, be made an example.

This is necessary to reinforce consumer confidence.

They went too far, they could have stopped at any time.

[eoakland]

They should all do time, be made an example.

This is necessary to reinforce consumer confidence.

They went too far, they could have stopped at any time.

100% agree with that summary. 

[Rawted]

Micon should be touted as a crypto-hero. He was right all along.

http://www.coindesk.com/ftc-butterfly-labs-held-back-shipments-illicit-mining/

[noviapriani]

Micon should be touted as a crypto-hero. He was right all along.

http://www.coindesk.com/ftc-butterfly-labs-held-back-shipments-illicit-mining/

I knew it also, gosh nice, lets hope they will serve time or pay back money they dont have to people who could have made profits

[Micon]

They actually printed up foam pitchforks.
I enjoy seeing BFL dead.

http://www.kansascity.com/news/business/article62022452.html

https://arstechnica.co.uk/tech-policy/2016/02/bitcoin-startup-butterfly-labs-settles-with-ftc-for-38-6m-but-it-cant-pay/

https://motherboard.vice.com/en_us/article/butterfly-labs-bitcoin-asics-miners-ftc-settlement-scam

https://www.forbes.com/sites/kashmirhill/2014/09/23/ftc-butterfly-labs-paypal/#9edd1cf2683a

http://www.theverge.com/2014/9/23/6833047/bitcoin-conspiracy-theorists-vindicated-as-ftc-shuts-down-butterfly-labs

the trail of tears that is the "Inaba" account (Josh Zerlan):
https://bitcointalk.org/index.php?action=profile;u=8198;sa=showPosts


/endthread