Sonny Vleisides (Butterfly Labs CEO) 2014 Court Transcript [The TL/DR version]

[colinistheman]

Original Transcript: http://www.scribd.com/doc/217190031/2014-01-28-USA-v-Vleisides-Transcript

I'm a BFL customer who has been denied a refund after they've had my money for 11 months, and they've banned me from BFL forums.

I read this entire court transcript (it took me 3 hours) and I copied the important parts below to save you some time. Best parts highlighted in blue.

I think it's funny how the Judge says that BFL has a smell and "smells really bad" and "It's a strong smell".


BFL complaints from customers

Q. Okay. And did you ever discuss with anyone at Butterfly Labs interactions with PayPal?
A. No.
Q. Now, the one thing that we can be certain of is that there are complaints. There have been complaints; right?
A. Thousands.
...
Q. Okay. And is it your understanding that almost all of the complaints that have come in have been complaints about delays in production and people not getting the product that they wanted on time?
A. Not receiving their merchandise is what I've been told.


Sonny Vleisides (BFL owner) using company money to buy a personal residence

Q. Okay. So let's talk about another red flag. You testified in December about the company, Butterfly Labs, owning a residence that Mr. Vleisides uses?
A. Yes.
Q. Okay. Mr. Vleisides told you about that residence; correct?
A. Yes.
Q. You've been to that residence?
A. Several times.
Q. And Mr. Vleisides told you that the company owned that residence?
A. Yes, he did.
Q. Did you ever tell him that the company's ownership of that residence and his use of it was a violation of his supervision?
A. No, I did not.


Complaints against BFL and mis-use of company funds to buy property

Q. Mr. Morris had you look at a Better Business Bureau complaint that had been resolved. Did you look to see if what the -- if Butterfly Labs had a ranking with Better Business Bureau?
A. I did. I looked Butterfly Labs up. They had an F ranking, and there were more than 100 complaints on there with the same sort of shipping and delivery issues.
Q. So is it your understanding Better Business Bureau ranks from A as in Adam to F as in Frank, and they had an F?
A. That's what I understand, yes.
Q. And you also mentioned on cross-examination that there were FTC complaints as well?
A. Yes.
Q. And so those are available on a law enforcement database Consumer Sentinel?
A. Consumer Sentinel, yes.
Q. Do many of those complaints include language such as no refund, final sale, refusal to refund?
A. Oh, yes. I -- I have looked them over and I know that they can't be brought into exhibits. But consistently people say that when they've asked for a refund, they've been told that all orders are final.
Q. All right. So Mr. Morris gave you the example of Amazon, and just as an analogy. If -- if a customer orders from Amazon and then they don't get their product for say eight to ten months and asked for a refund and Amazon doesn't give them a refund, would you consider that a proper business model?
A. No.
Q. All right. And is that what is being reported to happen there?
A. Yes.
Q. And is it a concern for you, especially when you see some self dealing in that while not shipping product or often refunds to some customers, there are undocumented loans being made to officers?
A. Oh, definitely. Yes.
Q. And then there also is property being bought by the company for use by the officers?
A. Yes.
Q. Such as a house and a car?
A. Definitely.


Sonny Vleisides violating his parole and using customer money for loans

A. Can I-- just further on the loans? Mr. Vleisides, if he got --it's a gray area. But if he got a loan, it should have been reported to me. In the past he has asked if he wanted to get a $500 Home Depot card, he asked me. And when his girlfriend's car went out, he emailed me asking for approval to get a loan, because per his conditions he cannot apply without it. So it's -- it's problematic.
Q. What is the amount of the undocumented loan?
A. The documentation I got from him says $65,000, I believe.
Q. Have you received any documentation as to the terms of the loan or the paperwork?
A. No.
THE COURT: For the record it's in document 23.1, page 4 of 7. It's question 6. Which shareholder received a $242,000 loan from Butterfly Labs? There's $65,977.19 attributed to the defendant, and the annual rate is .22 percent. That's in that document. Okay.
Q. And so my question was, did you have the underlying paperwork of the terms of the loan...
A. No.


BFL company gross profits, staff size & location

Q. Okay. How large is the company?
A. There's different ways to measure how large a company is. The two typical ones are how many employees and how much revenue. Butterfly, since I've been there, peaked at about 110 employees when we were in full manufacturing swing. At current time, because we've manufactured and shipped all the products in the backlog, and we are not yet producing the next version of the product, we have downsized, laid off staff who were assembling parts and components that are not necessary right now.So at this point the company is about 60 people. But our expectation is when we do begin to construct the next iteration of these products will increase staff to manage that production.
Q. And how many facilities are involved just locally with the manufacture of that product?
A. There -- the primary manufacturing spot and company headquarters is in Leawood. That's the primary manufacturing site. There is a -- a warehouse where there's some parts and there's some component assembling that's done that's also inthe vicinity. I want to return for just a moment. You asked me about how large is the company, and I said there were two measures. I talked about employees. In terms of revenue, in 2012 the company did about $2 and a half million of revenue. For 2013 we have not finalized the financial statements, but I expect that the revenue for 2013 is going to be between $25 and $30 million.


PayPal

Q. And that's where I want to go next. Let's talk about, we've heard some discussion about money being frozen with PayPal. Can you talk a little bit about what it means to havea frozen account with PayPal?
A. Sure. In the same way that an insurance company collects premiums from a lot of people and expects to have claims, but not claims from a hundred percent of those people, the insurance company holds a portion of all the money that it collected as a reserve for claims, and the rest of that money is available to pay their expenses and hire people and dividends to their shareholders. PayPal works more or less the same way. They collect payments from everybody who is paying, ordering from a particular company. And generally they hold back a portion of those funds and release the rest to the company for what ever purposes the company chooses to use the money. Once the volume of complaints had risen to a point that it was getting higher level management attention at PayPal, PayPal decided to start holding a hundred percent of the money, not a lesser percent of the money. So they froze the account in a sense that Butterfly could not draw from the account. But at that time new orders could be placed using PayPal so the amount in that account could continue to -- to grow. At a later point in time PayPal removed the company's ability to -- to take large orders using PayPal, and then about a month after that they said you can no longer takeany orders using PayPal.
Q. So, in essence, then, you had this pile of money that was sitting with PayPal; correct?
A. That's correct.
Q. Okay. And because the company was not able to access that money, there was probably some conversation that occurred between Butterfly Labs and PayPal; would that -- would that befair to say?
A. Yes.
Q. And when you came to work for Butterfly Labs, that was one of the first issues that you probably dealt with?
A. In -- in late August PayPal had limited the dollar amount of an order that could be placed using PayPal. I started beginning of September. September 20th PayPal cut off all new orders from the company. Their concern was that the amount of money they were holding and the amount of orders that needed to be satisfied was imbalanced, and they therefore wanted to hold a hundred percent of the money that they had. So this was my first and primary activity with the company.
Q. Tell us what you did to look into what could be done.
A. So the company had begun shipping products in late April, but the production volume was very slow. Very small in April, May and June. Actually in June and July they started shipping a bit more product. By September the production line, the supply of parts, the assembly process was getting resolved to the point where the production volumes were coming up. So I spoke to our PayPal account manager... We have an account manager [at PayPal]. So I spoke to him and I said, "Look. What are we -- what do we need to do?" The situation at that point in time was that PayPal was holding between 11 and $12 million. The account was frozen. And Butterfly needed to satisfy about 16 or $17 million worth of orders. So had a hundred percent of those orders come back for refund, PayPal didn't have enough money. And that's what they were worried about was that we're under-reserved. What they said was, "Well, look. Either you got toship these people their product, or you need to refund them their money." So what I did is created a report using our online order system and our online shipping system that listed every order that had been paid through PayPal, whether it had been shipped or not. And for those that had been shipped what was the shipping tracking number, so that we could match orders placed and dollars paid against orders shipped and dollars earned more or less. At that point in time there were 23,000 PayPal orders, of which about 2,000 had been shipped. About a million and a half dollars out of 19 million total. That's mid September. Every week after that I updated that report so that we could show them progress against reducing that backlog and lowering PayPal's exposure, although there were 5 million more in orders than there was in money held. So it took a while to get down to where that backlog was -- was even with the amount they were holding. We reached that point in about mid November [2013]. After that, as we continued to ship -- and by this time our shipping was between 1 and a half and $2 million a week. After mid November once the backlog was below the amount of the reserve, I said to them, "Okay. Look. Your exposure is less than a hundred percent. You need to start releasing part of this money." And they worked with us cooperatively to release -- there wasn't a hard and fast rule. But generally if we shipped a million and a half dollars, I asked them to release a million dollars out of the reserve. So that's what brought the account down by mid December, to about 7 million held versus the 11 million that they initially had it at.


65nm product refunds and upgrades to Monarchs from previous 65nm tecnhology

Q. Where is that -- and so now this is probably about a month later. Where are we on that number now?
A. So there are actually three ways to satisfy an order. One is to refund the individual, the second is to ship the goods, the third is that some people decided, the company's coming out with a new line of this product similar, same function, but a different form factor, a different shape. Some people chose to transfer their order for that equipment to an order for the new equipment. That equipment is not due to be shipped until March or April [2014] (it's presently July 2014 and still no delivery). So where we stand today is out of that 19 million, about a million and a half has transferred into future product orders. All but about $2500 of the remainder has either been shipped or refunded. So the remaining amount that PayPal needs to hold is the million and a half for the future orders, plus about $2500. As of last Friday PayPal was holding $6 million. I would add that the total refunds that we've made related to PayPal, out of $19 million we've refunded $1.5 million. 1,550,000. When you use PayPal, as a vendor, PayPal can elect to make a refund on your behalf. They don't necessarily ask your permission. So, to a large extent, those refunds would have been involuntary refunds, but to some extent we would have gotten involved. There's a difference between whether the person requests their money back in -- within 10 days, or within 45 days, or beyond 45 days. At any rate, we've refunded about 8 percent of the total volume of orders.


Pre-orders & no phone customer service

Q. And when a company receives preorders, are there representations made to customers about wait times or -- or anything associated with the production of the product?
A. Specifically at Butterfly Labs?
Q. At Butterfly.
A. Yes. I -- I didn't come to the company before September, but my understanding in reviewing screen shots and talking with company executives is that all along they have said to people, you know, this is a preorder, preorder terms, nonrefundable. Delivery of your product may take quite sometime, two months or longer. Essentially don't order the product if you're not willing to wait the amount of time it takes.
Q. And are you aware of efforts that Butterfly Labs made to try to keep customers informed through its website about what was happening with the process?
A. Yes. With this product, in particular, there was a delay from the expected initial delivery date that caused the company to have to say, this -- you know, we need to do some rework on the product. Once they had a handle on the redesign of their chi por the -- the reengineering of the power that was being consumed and the heat that the chip was producing, they put an advisory on their website that said, Okay. We're we're nearly at the point of producing at full scale. It's still going to take a while. We have orders dating back several months. So if you're in line, we're going to give you an opportunity now to get out of line by taking a refund. Or you can elect to stay in line for future delivery of this product. And then for people who ordered after that date, when -- when you were ready to place your order, one of the terms of sale, you had to check a box that said, essentially,I acknowledge that this could be a multi-month delay and I do choose to -- to stay in line for my product.
Q. So it sounds like there's some active communication going on with PayPal, but it sounds also like there's some active communication directly from Butterfly Labs to the customer about what kinds of issues Butterfly Labs is facing withrespect to production?
A. Yes. For any customer with a paid order prior to May 1st, they received an active outreach to them saying, you know, we need you to reaffirm your order, or take a refund. And for anyone who ordered after May 1st that showed as a pop-up on their order screen.
Q. Did you ever have a customer support center in place at Butterfly Labs? Was there ever anything like that put in place?
A. There's a customer service department that operates in the headquarters, same place where we do the manufacturing.
Q. And would that customer service department also field calls from -- from consumers about timing, expected delivery, maybe complaints about the product itself?
A. Yes. Although I would say not phone calls, unlike a call center. Everything with Butterfly, as is typical with a lot of tech start-ups, is done via email. So the customer service center received inbound emails. Very rarely was there an actual phone call.


Using customer funds for personal things

Q. And how does the company, that perhaps is showing loss on its tax return, buy a house or a car?
A. So we talked about the prepaid sales model earlier where you get cash in advance of delivering on whatever the promised product is. So the actual cash available comes from those presales. It would -- it would certainly be unwise to spend all of that money that you collected, because you have to pay payroll and you have to buy parts and you have to pay your taxes, et cetera. But to the extent you can estimate the profitable portion that will be retained out of that, you can use that for any sort of company expenditure. So the financing of it is through the presale order.
...
Q. Well, it kind of sounds like what happened, from your description, was that these shareholders were using company credit cards and making personal purchases and then they just turned into loans? They were turned into loans at some point?
A. To some extent I would say that's correct. The company --the company credit cards were used for both personal and business purposes, and the personal portion was shown as an advance that would be -- need to be repaid by the shareholder.
Q. Now, should people who have company credit cards use them for personal expenses?
A. They should not.
Q. All right. And so does that continue on, do you know, by -- by Mr. Vleisides?
A. I -- I will say that it probably has continued.
Q. All right. Are there other employees, in particular Mr. Vleisides' mother, who has a company credit card that makes personal purchases on?
A. There are other company emp -- there are other company employees who -- you know, the only one I've looked at closely is Mr. Vleisides because of this issue. There are other company employees who have company credit cards. I do not know whether Mr. Vleisides' mother has a company credit card.


BFL has multiple lawsuits

Q. Okay. The final thing I want to talk about is the -- the issue of the lawsuits that were raised. I believe there were-- there were two that was raised. One was in Johnson County and one was filed in the District Court of Kansas. And I want to ask you, to your knowledge, is the company handling these lawsuits? I mean, were they aware of them before they just came up today in -- in testimony?
A. The company is responding to those lawsuits.
Q. Okay. And who do they have engaged as a firm that is working on those lawsuits?
A. Polsinelli, who serves as external counsel for the company.
Q. Okay. So Polsinelli is actively engaged with handling those lawsuits?
A. Actively engaged.


Monarch & Shipping

Q. The Monarch BPU was said to begin shipping at the end of 2013. Has that happened?
A. No.
A. ...In general, the largest liability that the company has remains for preorders now, not of that version [65nm] of the product, but the next version [28nm Monarch] of the product. So we've received moneys from customers, preorders for the next iteration of these products. That's the largest liabilities on the books if we had our financial statements current. And we probably, at this point, I'd say that liability would be north of $10 million.
Q. Okay. We talked about this Monarch BPU that has not yet shipped. What is the Monarch BPU?
A. It's the next generation of this product. It's more in the form of a card, about the size of your hand, that would --it's kind of a plug and play type of component if you'rebuilding computer hardware. So it's a more powerful version of -- of this that will be coming out soon.
Q. Okay. And, you know, as far as where things are on the process of getting that out the door, what -- where do things stand, if you know?
A. The -- all of these products are based on this chip that I was describing before. The -- the chip that's in this is called a 65 nanometer chip. The chip in the new one is a 28nanometer chip. Everything's shrinking. It's Moore's Law. So you have to design the chip, and then you have to geta firm that builds chips to actually build some prototypes that you can test and see if they function the way that you want them to. This process is multiple. I mean, it's many months from design to initial manufacturing to testing to full production. Where we are in it today [January 2013] is that the prototype chips have been delivered to the lab that will do the testing on those chips. So the testing process should take until, well, the end of this week or maybe into next week. At that point we'll know if the chip's functional as they designed, if they live up to the engineering specifications. At that point modifications will be made, if necessary. You have to re-prototype and then you go into production assuming the re-prototype works correctly.
Q. And similar to what we talked about before, is Butterfly Labs keeping its customers apprised of its progress in that regard?
A. Yes. I think, you know, we had a newsletter that was just recently released to anyone who's ordered from us before advising them of the status of the current product.
Q. Okay. So, in other words, they're not hiding from the product, that they are trying to address it actively?
A. Yes.


The Court's ruling that Mr. Vleisides is guilty of violating his probation terms by taking loans on company money without being open about this

THE COURT: Okay. That concludes the evidence. Let me tell you what I think. Let's see. Get my notes here. Mr. Vleisides, here's your problem. You are on supervised release for fraud. So any time we get concerns that, A, you're not completely forthcoming with all the information that we think you should be; and B, we've got $11 million in escrow that's being held based upon customer complaints, you have a huge problem. As far as the evidence, I -- I -- based on the evidence I've heard at this point in time, I am going to find that you are in violation of your probation in this way -- or your supervised release, in that you did fail pursuant to the special conditions of probation and supervised release, you did fail to advise or seek permission from your probation officer to apply for any loan or open any line of credit without prior approval. That's clear. I don't think there's any question about that. Whether or not we call it an advance or a loan, you took money out. It lacked the transparency that we expect based upon your conditions of supervised release. So on that particular issue, the Court will make a finding. The other stuff is pretty close. It smells really bad. And but I am not going to make a particular finding on that. Yes, sir.
MR. NASEEM: Judge, can I be heard? Maybe I can --
THE COURT: No. No. I'm sorry. We're done with evidence and I'm -- I'm going to rule here on this. So that's the particular issue that you're stuck with today. Now, my job first is to calculate the guidelines. You are still a criminal history category I. The guideline range is 3 to 9 months. The supervised release range is custody and supervised release may not total more than three years.
THE COURT: Twenty-four months of continued supervision.
...
Mr. Vleisides failed to give all the information that was required of him. That's the basis of this violation. Now, there is a stench coming from Butterfly Labs. It's a strong smell. It's not enough to send you to prison today, because, to be quite honest with you, if it was, we'd be talking about 24 months in prison. It's not -- I think it's too close. I think Mr. Bourne did a very good job of testifying, and it assisted your defense greatly. But if I find out that there is this fraud word involved in this part, you know, Mr. Vleisides, as we say here at the courthouse, you need to get your toothbrush and get your things in order, because fraud will not be tolerated, you understand that? So I would work very hard to make these consumers happy consumers who you've dealt with. Now, I do believe that a continued term of supervised release is important. So we're not going to lock you up today based on this violation.
THE COURT: Today it is pursuant to the Sentencing Reform Act of 1984, it is the judgment and sentence of this Court, based upon his violation of supervised release, that Sonny C. Vleisides is hereby placed on supervised release for an additional term of two years. While on supervised release the defendant shall comply with all the conditions previously imposed in the original judgment dated September 15th, 2010. Further, the defendant shall abide by the following addition -- additional conditions. The defendant shall submit his person, his property, house, residence, office, vehicle, papers, computer, other electronic communication or data, storage devices or media and effects to a search at any time conducted by a U.S. probation officer at a reasonable time ina reasonable manner, based upon reasonable suspicion of contraband or evidence of a violation of a condition of release.Failure to submit to a search may be grounds for revocation. The defendant shall warn any other residents that his premises may be subject to searches pursuant to this condition. The defendant shall file a personal and business tax returns as required by law and provide the probation officer with copies of all tax documents as directed by the probation officer. As I said earlier, Ms. Pierce is going to make some proposed suggestions to the Court related to how we can better supervise you, Mr. Vleisides, and make sure that we have transparence in that supervision. Your job is to make sure that she understands everything, and this -- this business about her not understanding, I don't buy it. Your job is to communicate, create transparencies. Any loan, especially $64,000 or whatever it is, is something she needs to know about before it's made, no matter -- I know you're calling it -- we're calling it an advance today, but I find it's a loan, so we're clear on that part as well. I hope this is successful for you, Mr. Vleisides. I'm -- I'm pulling for you. I hope Butterfly Labs is a legitimate company that enjoys success. But there's a smell, and that's what I'm addressing today.



The TL/DR of the TL/DR is: Don't do business with BFL because their company and owners are loaded with corruption and shady business practices at the customers' losses.




You can do something about it. Class Action Lawsuit against BFL:

If you are a BFL customer, yes, you can do something about it.

There is a Class Action Lawsuit against BFL. If you are a BFL customer or have been in the past, you can submit your information to Wood Law Firm's Class Action Lawsuit on Butterfly Labs below. They sent an email out today to those of us who have already joined and they asked for evidence from all those with complaints. There are about 50+ people complaining and providing information so far. We need to make that number even bigger.

http://www.woodlaw.com/cases/butterfly-labs-and-bf-labs-inc-bitcoin-miners
(There is a form at the bottom of the page to submit your information)

I filled it out and all Monarch customers should do the same. Provide factual information including correspondence and information on refused refunds with screenshots of order pages.




If you've not done so already then also raise a complaint with the FTC.

http://www.ftccomplaintassistant.gov

As BFL are violating the rules set out by the FTC.

www.business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule

If enough people do this then they might take action against BFL themselves.

If you want a refund you should request one by opening a support ticket, BFL will refuse, reply to their email insisting that you no longer have any need for the item and they have no legal basis to deny a refund. If you keep replying in different ways then they will eventually give up responding. Pass on all the details to woodlaw. The class action is still in discovery and the class hasn't been decided yet, so you might not be able to get in on it anyway. Bringing action yourself might be better, as if you find you're excluded from the class then at least your case is further on. If you wait until the class is decided then BFL might disappear before your case is heard.





Update July 14, 2014:  BFL Buys out a website just to change the bad things stated about BFL into good things and to promote itself:  http://techcrunch.com/2014/07/14/bitcoin-mining-company-buys-critical-site-to-improve-google-results/

[Cryptocables]

Great read. Thanks for the shortened version, I never would have read it otherwise.

[colinistheman]

Great read. Thanks for the shortened version, I never would have read it otherwise.

Thanks and you're welcome.

It's my way of helping the community and a way for me to do something about it, since I am also a victim of BFL's dishonesty and poor business practice. I was denied a refund this month on my $4680 August 2013 Monarch order.




I just went through and highlighted all the best parts of the text in blue as well.

[bitpop]

Hope he gets life in jail

[odolvlobo]

That people continue to send money to BFL is a failure of the Bitcoin community. We must strive as a community to prevent newbies from falling into BFL's trap. Whenever we see BFL mentioned, we must warn people to stay away. It is the only honorable action to take.

[ProfMac]

That people continue to send money to BFL is a failure of the Bitcoin community. We must strive as a community to prevent newbies from falling into BFL's trap. Whenever we see BFL mentioned, we must warn people to stay away. It is the only honorable action to take.

One way would be to put the summary of the court proceedings, above, on a Google doc and add keywords for BFL, Monarch, and so on.  Perhaps even make a web page with a Google adwords link.

[Ente]

Original Transcript: http://www.scribd.com/doc/217190031/2014-01-28-USA-v-Vleisides-Transcript

I'm a BFL customer. I read this entire court transcript (it took me 3 hours) and I copied the important parts below to save you some time. Best parts highlighted in blue.

I think it's funny how the Judge says that BFL has a smell and "smells really bad" and "It's a strong smell".

[..]

The TL/DR of the TL/DR is: Don't do business with BFL because their company and owners are loaded with corruption and shady business practices at the customers' losses.

Thank you a lot for the work you did!
I wouldn't have read through the original file, but this tl;dr is very much worth it.
Personally, I would have been too ashamed to even give those answers.

Ente

[QuestionAuthority]

Thanks for this, it was fun to read. There is no corner of the Bitcoin economy that doesn't attract scumbags and felons. From mining equipment to exchanges and everything in between. For now I guess all we can do is hope he violates his parole, gets raped in prison and Josh Zerlan joins him.

[OgNasty]

Looks like the judge is going to give Sonny enough rope to hang himself.

[CanaryInTheMine]

It wouldn't surprise me if he resigned as a manager (CEO) or sold the company at this point (if he has any major ownership).  for various reasons.

[BanksWorstFear]

Josh Verlan is attending at least two upcoming bitcoin conferences in Europe

I noticed his name when compiling a complete list of upcoming events for my site @
http://BanksWorstFear.com/events

[Viceroy]

first page!  (josh, you are still a scumbag)

[colinistheman]

Thanks for this, it was fun to read. There is no corner of the Bitcoin economy that doesn't attract scumbags and felons. From mining equipment to exchanges and everything in between. For now I guess all we can do is hope he violates his parole, gets raped in prison and Josh Zerlan joins him.

lmao

[CanaryInTheMine]

Thanks for this, it was fun to read. There is no corner of the Bitcoin economy that doesn't attract scumbags and felons. From mining equipment to exchanges and everything in between. For now I guess all we can do is hope he violates his parole, gets raped in prison and Josh Zerlan joins him.

lmao

I've heard of the golden rule...  What is the bitcoin rule?

[Beans]

Can I get my refund now? I've been waiting 2 years already ffs.

[colinistheman]

Can I get my refund now? I've been waiting 2 years already ffs.

Same. Yes, you can do something about it.

There is a Class Action Lawsuit against BFL. If you are a BFL customer or have been in the past, you can submit your information to Wood Law Firm's Class Action Lawsuit on Butterfly Labs below. They sent me an email today asking for evidence from all those with complaints. There are about 50 people complaining so far. We need to make that number even bigger.

http://www.woodlaw.com/cases/butterfly-labs-and-bf-labs-inc-bitcoin-miners

(There is a form at the bottom of the page)

I filled it out and all Monarch customers should do the same. Provide factual information including correspondence and information on refused refunds with screenshots of order pages.

[Hunyadi]

That's some seriously shady stuff...

[SirHat]

That people continue to send money to BFL is a failure of the Bitcoin community. We must strive as a community to prevent newbies from falling into BFL's trap. Whenever we see BFL mentioned, we must warn people to stay away. It is the only honorable action to take.

I personally haven't been involved with mining directly, but what gets me is that these guys (BFL and reps) are still attending all the high-end btc conferences (Bitcoin2014 amsterdam/ inside bitcoins hong kong being most recent) and giving endless publicity interviews etc.. why? What do they hope to achieve and who is even listening to them? Seems very deceptive to me, newbies beware indeed.

[klmist]

It wouldn't surprise me if he resigned as a manager (CEO) or sold the company at this point (if he has any major ownership).  for various reasons.

Yea.. that seems like the best action imo.. he basically got off.. 24 months supervised release.. which I guess he was already on from before, so essentially no change.. if he cuts all ties now I can't see him getting in any further trouble over this.

[colinistheman]

(deleted)

I saw your post other post as well. I understand your situation. I am in the same boat with you. I just finished compiling all the evidence I could find and writing an email to WoodLaw firm. Did you do the same? If not, can you? The more of us that tells our story with all the evidence, the more chance we will help each other out getting refunds.

[Bubbles06]

That people continue to send money to BFL is a failure of the Bitcoin community. We must strive as a community to prevent newbies from falling into BFL's trap. Whenever we see BFL mentioned, we must warn people to stay away. It is the only honorable action to take.

I personally haven't been involved with mining directly, but what gets me is that these guys (BFL and reps) are still attending all the high-end btc conferences (Bitcoin2014 amsterdam/ inside bitcoins hong kong being most recent) and giving endless publicity interviews etc.. why? What do they hope to achieve and who is even listening to them? Seems very deceptive to me, newbies beware indeed.

They hope to achieve more people prepaying for hardware that they'll never receive. Or receive many months or even a year or more after the fact.

[Chris_Sabian]

Excellent post and summary OP.

The level of deceit is amazing.
 

[mrpark]

yes, and I will let them also know about the 50% card scam. I have the evidence in the email with order numbers and all the wording. The wording was that they were going to refund my orders TOGETHER, it even has the numbers and amounts for each card.

[Bit_Happy]

Great read. Thanks for the shortened version, I never would have read it otherwise.

Thanks and you're welcome.

It's my way of helping the community and a way for me to do something about it, since I am also a victim of BFL's dishonesty and poor business practice. I was denied a refund this month on my $4680 August 2013 Monarch order.




I just went through and highlighted all the best parts of the text in blue as well.

Your effort is helpful, and I'm really glad to see BFL having to "face the music" by going to court. 

[cereal7802]

It wouldn't surprise me if he resigned as a manager (CEO) or sold the company at this point (if he has any major ownership).  for various reasons.

Not entirely sure selling the company would work to his benefit. The new owners would surely have a good case against previous management once they had internal information regarding invoices and communications. It might open them up to more issues than letting the ship burn in whatever way it does end up going. Also can't really see anyone willing to put money up for the company with its current standing in the community. even gox stands a better chance of clearing the shame of their name before BFL could.

[ibminer]

Almost at the end...... but I want to say it is disheartening to me that BFL is making deals with TigerDirect and that companies like MicroCenter are even talking to a company like Butterfly Labs. I also find it sickening that BFL will gladly send $240,000 worth of equipment over to credit card companies (for free) but not fulfill their own customers orders.

It is unfortunate that BFL is riding the backs of their early investors to ride up the commercial ladder and leave all of them behind in the dust.


EDIT: done reading. Judge should have locked him up based on that smell. It smells for a reason.

[murraypaul]

I thought this bit was very interesting:

A. So we -- the company was approached several months ago by a major significant credit card company about the possibility of using that hardware in validating credit card transactions as either authentic or fraudulent. That company is currently conducting testing using 12 of the company's suitcase-sized machines, much large -- about eight times more powerful than this one. So they're running a test on that, and if that turns out, what my understanding, as of last week, is their testing is going well. That would -- if they decide to adopt this technology for validating all of their credit card transactions, which I would say given the size of this company would be 10s of millions if not hundreds of millions of transactions a year, we would be looking at a multimillion dollar order from them and the opportunity to then take that product to other credit card companies as a whole new -- a whole new market for this technology.

[colinistheman]

I thought this bit was very interesting:

A. So we -- the company was approached several months ago by a major significant credit card company about the possibility of using that hardware in validating credit card transactions as either authentic or fraudulent. That company is currently conducting testing using 12 of the company's suitcase-sized machines, much large -- about eight times more powerful than this one. So they're running a test on that, and if that turns out, what my understanding, as of last week, is their testing is going well. That would -- if they decide to adopt this technology for validating all of their credit card transactions, which I would say given the size of this company would be 10s of millions if not hundreds of millions of transactions a year, we would be looking at a multimillion dollar order from them and the opportunity to then take that product to other credit card companies as a whole new -- a whole new market for this technology.

That is very interesting. more mis-use of customer funds and dishonest priorities

[LostDutchman]

Well, keep an eye on:

WeDemandJusticeFromBFL.com

I'm sure Sonny is!

LOL!

We at WeDemandJusticeFromBFL.com are deidcated to ensuring the BFL deliver product in a timely manner or make immediate refunds to those who request it.

BFL will rue the day that it failed to do either!

https://bitcointalk.org/index.php?topic=150803.msg7760011#msg7760011

The Dutchman.

[colinistheman]

Wow, you registered that domain? Awesome

If I can provide information to aide you I will be happy to do so.

Please use this thread's first post as you see fit.

I think the word of the day is rue.

[LostDutchman]

Wow, you registered that domain? Awesome

If I can provide information to aide you I will be happy to do so.

Please use this thread's first post as you see fit.

I think the word of the day is rue.

We are coming after BFL and Hell is coming with us!

RUEAGE!

MAXIMUM RUEAGE!

(You know, you gave me an idea so to protect RUEAGE, I bought the .com!)

Yippie-Cai-Yah!

(Edit) And "Maximumrueage.com.)

heh, heh

[ibminer]

I thought this bit was very interesting:

A. So we -- the company was approached several months ago by a major significant credit card company about the possibility of using that hardware in validating credit card transactions as either authentic or fraudulent. That company is currently conducting testing using 12 of the company's suitcase-sized machines, much large -- about eight times more powerful than this one. So they're running a test on that, and if that turns out, what my understanding, as of last week, is their testing is going well. That would -- if they decide to adopt this technology for validating all of their credit card transactions, which I would say given the size of this company would be 10s of millions if not hundreds of millions of transactions a year, we would be looking at a multimillion dollar order from them and the opportunity to then take that product to other credit card companies as a whole new -- a whole new market for this technology.

This is what I meant by the $240,000 worth of equipment sent to credit card companies but still not able to fulfill customer orders. They are in it for themselves and are just using customer funds to try and push their way up the ladder, at the same time downplaying their issues as growing pains and a lack of understanding on how to run a business. Such BS.

[bitpop]

Where's phinneus 

[colinistheman]

Where's phinneus 

Why? Does he have a large Monarch purchase with BFL?

[QuestionAuthority]

Where's phinneus 

No one knows dude. Maybe a barn fell on him.

https://bitcointalk.org/index.php?topic=663251.0

[JorgeStolfi]

Where's phinneus 

He hasnot logged in since 2014-06-17.  Someone, somewhere on this forum, claimed that he is on holiday.  Someone else tried to call him about some unresolved business, and no one answered.

[mrpark]

BFL has banned me from the forum for life. heh... Nice way to treat a paying customer. I think anyone who moderates a forum to that degree, you should not buy anything. Anytime you have a problem they are going to shun you. I am glad we still have bitcointalk to say whatever we want about butterflylabs.com While they can lock down the forum, they can't lock down the internet.

[LostDutchman]

BFL has banned me from the forum for life. heh... Nice way to treat a paying customer. I think anyone who moderates a forum to that degree, you should not buy anything. Anytime you have a problem they are going to shun you. I am glad we still have bitcointalk to say whatever we want about butterflylabs.com While they can lock down the forum, they can't lock down the internet.

Damn right they can't and they are about to learn that shit the hard way!

I'll have the content on WeDemandJusticeFromBFL.com no later than this Saturday morning and the fun will begin!

The Dutchman.

[colinistheman]

If you've not done so already then also raise a complaint with the FTC.

http://www.ftccomplaintassistant.gov

As BFL are violating the rules set out by the FTC.

www.business.ftc.gov/documents/bus02-business-guide-mail-and-telephone-order-merchandise-rule

If enough people do this then they might take action against BFL themselves.

If you want a refund you should request one by opening a support ticket, BFL will refuse, reply to their email insisting that you no longer have any need for the item and they have no legal basis to deny a refund. If you keep replying in different ways then they will eventually give up responding. Pass on all the details to woodlaw. The class action is still in discovery and the class hasn't been decided yet, so you might not be able to get in on it anyway. Bringing action yourself might be better, as if you find you're excluded from the class then at least your case is further on. If you wait until the class is decided then BFL might disappear before your case is heard.

[Fiyasko]

Nice summary, It'd only be better if you added the Line #'s attached to the sentence so we can go and look it up and verify

[LostDutchman]

I AM SORRY WE'VE DECEIDED YOU ARE NO LONGER ECONOMICALLY VIABLE TO US AT BFL,  GOOD BYE FOREVER YOU ARE NOW SHUNNED FOR LIFE!

They banned me for life from the forum for trying to get a refund... (notice no reason is given for banning me for life from the forums)



Everyone please repost this...

BFL = http://www.butterflylabs.com
BFL FORUM = https://forums.butterflylabs.com

Fuel to the fire, my friend, fuel to the fire!

[colinistheman]

Nice summary, It'd only be better if you added the Line #'s attached to the sentence so we can go and look it up and verify

Just select a partial sentence or unique couple of words and do a search on the document. You will find it easily.

[Fiyasko]

Nice summary, It'd only be better if you added the Line #'s attached to the sentence so we can go and look it up and verify

Just select a partial sentence or unique couple of words and do a search on the document. You will find it easily.

It's what I did. Very good work

[colinistheman]

Nice summary, It'd only be better if you added the Line #'s attached to the sentence so we can go and look it up and verify

Just select a partial sentence or unique couple of words and do a search on the document. You will find it easily.

It's what I did. Very good work

Thanks. Yeah it's all 100% from the document

[Hyena]

Thanks for the topic. I had no idea such things are taking place and I feel somewhat pleased with the fact that repressed customers can strike back.

[colinistheman]

Thanks for the topic. I had no idea such things are taking place and I feel somewhat pleased with the fact that repressed customers can strike back.

You're welcome. I just hope that these things actually accomplish something. (like BFL forced to refund everyone, or justice being served)

[Chronikka]

Thanks for the topic. I had no idea such things are taking place and I feel somewhat pleased with the fact that repressed customers can strike back.

You're welcome. I just hope that these things actually accomplish something. (like BFL forced to refund everyone, or justice being served)

Unfortunately, BFL has quietly managed to get themselves into the background again. ASIC companies are everywhere now, and for most people BFL is just an ugly chapter in the history of Bitcoin, nothing more.

I think anger/outrage/frustration towards BFL is decreasing simply because their customer base is decreasing. Without a renewal of fresh complaints they will probably get away with it all. If they couldn't find enough to put Sonny back in jail today, they probably won't ever.

[LostDutchman]

Caught this on another thread:

http://techcrunch.com/2014/07/14/bitcoin-mining-company-buys-critical-site-to-improve-google-results/

Seems it's OK for Sonny and BFL to engage in a bit of SEO here and there but not OK to engage in SEO to fight them.

Interesting thinking, eh?

[colinistheman]

Caught this on another thread:

http://techcrunch.com/2014/07/14/bitcoin-mining-company-buys-critical-site-to-improve-google-results/

Seems it's OK for Sonny and BFL to engage in a bit of SEO here and there but not OK to engage in SEO to fight them.

Interesting thinking, eh?

LMAO! That is the first I've heard of that... Hilarious and horrible at the same time.

How low can BFL's ethics stoop?  If you can't win fair, then just buy out the opposition (with customer funds of course)!

[LostDutchman]

Caught this on another thread:

http://techcrunch.com/2014/07/14/bitcoin-mining-company-buys-critical-site-to-improve-google-results/

Seems it's OK for Sonny and BFL to engage in a bit of SEO here and there but not OK to engage in SEO to fight them.

Interesting thinking, eh?

LMAO! That is the first I've heard of that... Hilarious and horrible at the same time.

How low can BFL's ethics stoop?  If you can't win fair, then just buy out the opposition (with customer funds of course)!

I have a solution but few will listen.

[colinistheman]

I have a solution but few will listen.

Few will pay for it. They have already paid and lost dearly.

You need a solution that doesn't involve asking people for money.

[LostDutchman]

I have a solution but few will listen.

Few will pay for it. They have already paid and lost dearly.

You need a solution that doesn't involve asking people for money.

Lemmee see here................................

...a few grand properly spent saves millions?

Yep.

Not a good plan at all.

I'll rethink it but thank you for your input.

[colinistheman]

I have a solution but few will listen.

Few will pay for it. They have already paid and lost dearly.

You need a solution that doesn't involve asking people for money.

Lemmee see here................................

...a few grand properly spent saves millions?

Yep.

Not a good plan at all.

I'll rethink it but thank you for your input.

Your sarcasm is unnecessary

The plan in theory is a good one but nobody is going to give you money. So it's not going to happen in actuality.

Feel free to prove me wrong and I'll eat my words.

[ibminer]

I have a solution but few will listen.

Few will pay for it. They have already paid and lost dearly.

You need a solution that doesn't involve asking people for money.

Lemmee see here................................

...a few grand properly spent saves millions?

Yep.

Not a good plan at all.

I'll rethink it but thank you for your input.

Your sarcasm is unnecessary

The plan in theory is a good one but nobody is going to give you money. So it's not going to happen in actuality.

Feel free to prove me wrong and I'll eat my words.

Not entirely sure what plan you are both talking about and don't have an opinion either way, BUT I can say that if people are stupid enough to still be giving BFL money for pre-orders then they are stupid enough to give money to anyone for anything. 

[colinistheman]

Not entirely sure what plan you are both talking about and don't have an opinion either way, BUT I can say that if people are stupid enough to still be giving BFL money for pre-orders then they are stupid enough to give money to anyone for anything.  

LostDutchman is referring to a website & idea for getting back at BFL that he created: http://www.WeDemandJusticeFromBFL.com

[ProfMac]

I have a solution but few will listen.

Few will pay for it. They have already paid and lost dearly.

You need a solution that doesn't involve asking people for money.

Lemmee see here................................

...a few grand properly spent saves millions?

Yep.

Not a good plan at all.

I'll rethink it but thank you for your input.

I did go read the your web page.  I think that the plan disturbs uninvolved people, and is partially untruthful;  this will sure spray you with backspatter, and ultimately harm the moral high ground position that they occupy.

However, the ultimate concept of causing a bolus of communications from the large number of customers involved intrigues me, and is an approach that I have envisioned many times in the past, but have never carried out.

What do you think of this course of action, where no one crosses over a line misrepresenting their identity or denying service to innocent bystanders:  each BFL customer, perhaps 20,000 or more, sends a small number of paper letters, for a total cost of under $5.

• Directly to the court
  
• To the attorney representing the plaintiff
  
• To BFL itself.
  
• Sonny's parole office
  
• BFL's attorney
  

I think this could be one letter to BFL with CC to the other parties.

I further think the letter should be very polite.  It should mention facts and ask for an action.  Each letter should be written so that it reflects well on you under the most hostile reading environment, whether in court, on TV, or in the BFL boardroom.  There should be absolutely no threats, exaggerations, or excesses in the letter.  The letter should be minimal.  It is the 20,000 quantity all from upstanding victims that is the excess, but that excess does not reflect back on any of the customers.  Each piece of that mail is sent to people who are involved in this particular piece of business, are not innocent bystanders, and is a proper use of a paid government service, the USPS.

You want the court and probation people to think that you are squeaky clean, and never, ever to get the idea that any one of you is a problem of any kind.  While my background story here is not that important, I can say that I have been a victim/witness in a murder trial, and that I got much better service from the prosecutors that did the people who acted like they would bring guns into the courtroom and, although victims, become criminals themself.   Avoid any suggestion of vigilantism.

Specimen:

Code:

Dear BFL

I have an order for 3 @ Monarch bitcoin miners placed on Feb. 18, 2013 for $5,650.  Prompt delivery time was 
a dominant portion of the value of this order, and the order is now unfit for the purposes for which we initiated 
business with each other.

I have been harmed by this delay, and I am disturbed to read court documents, for example, that Sonny has 
purchased a house with order payments before my order was fulfilled.

At this time, I require a prompt refund of my order.

Sincerely,

John Q Customer

[LostDutchman]

I have a solution but few will listen.

Few will pay for it. They have already paid and lost dearly.

You need a solution that doesn't involve asking people for money.

Lemmee see here................................

...a few grand properly spent saves millions?

Yep.

Not a good plan at all.

I'll rethink it but thank you for your input.

I did go read the your web page.  I think that the plan disturbs uninvolved people, and is partially untruthful;  this will sure spray you with backspatter, and ultimately harm the moral high ground position that they occupy.

However, the ultimate concept of causing a bolus of communications from the large number of customers involved intrigues me, and is an approach that I have envisioned many times in the past, but have never carried out.

What do you think of this course of action, where no one crosses over a line misrepresenting their identity or denying service to innocent bystanders:  each BFL customer, perhaps 20,000 or more, sends a small number of paper letters, for a total cost of under $5.

• Directly to the court
  
• To the attorney representing the plaintiff
  
• To BFL itself.
  
• Sonny's parole office
  
• BFL's attorney
  

I think this could be one letter to BFL with CC to the other parties.

I further think the letter should be very polite.  It should mention facts and ask for an action.  Each letter should be written so that it reflects well on you under the most hostile reading environment, whether in court, on TV, or in the BFL boardroom.  There should be absolutely no threats, exaggerations, or excesses in the letter.  The letter should be minimal.  It is the 20,000 quantity all from upstanding victims that is the excess, but that excess does not reflect back on any of the customers.  Each piece of that mail is sent to people who are involved in this particular piece of business, are not innocent bystanders, and is a proper use of a paid government service, the USPS.

You want the court and probation people to think that you are squeaky clean, and never, ever to get the idea that any one of you is a problem of any kind.  While my background story here is not that important, I can say that I have been a victim/witness in a murder trial, and that I got much better service from the prosecutors that did the people who acted like they would bring guns into the courtroom and, although victims, become criminals themself.   Avoid any suggestion of vigilantism.

Specimen:

Code:

Dear BFL

I have an order for 3 @ Monarch bitcoin miners placed on Feb. 18, 2013 for $5,650.  Prompt delivery time was 
a dominant portion of the value of this order, and the order is now unfit for the purposes for which we initiated 
business with each other.

I have been harmed by this delay, and I am disturbed to read court documents, for example, that Sonny has 
purchased a house with order payments before my order was fulfilled.

At this time, I require a prompt refund of my order.

Sincerely,

John Q Customer

"I did go read the your web page.  I think that the plan disturbs uninvolved people, and is partially untruthful;  this will sure spray you with backspatter, and ultimately harm the moral high ground position that they occupy."

PARIIALLY UNTRUTHFUL?

YOU CALLING ME A LIAR?

PUT UP OR SHUT UP!

I AM NOT IN THE MOOD!

No one gonna "backspatter" me 'cause they can't prove I'm doing it and eve if the did, what the fuck do you care?

You ain't my Daddy!

What a nice fuckin letter.

Translation:

"Dear BFL,

I know you one of the biggest scumbags on the planet and ripping people off all over the world on a daily baiss but would you please take pity on me and send my money back?

On bended knee.

Fucked Customer."

[colinistheman]

Specimen:

Code:

Dear BFL

I have an order for 3 @ Monarch bitcoin miners placed on Feb. 18, 2013 for $5,650.  Prompt delivery time was 
a dominant portion of the value of this order, and the order is now unfit for the purposes for which we initiated 
business with each other.

I have been harmed by this delay, and I am disturbed to read court documents, for example, that Sonny has 
purchased a house with order payments before my order was fulfilled.

At this time, I require a prompt refund of my order.

Sincerely,

John Q Customer

LostDutchman, I understand your frustration with the situation (as I am in it myself with BFL with about $5k at stake), but I too have learned is that acting out your emotions, even if justified, does not serve to help you. It just makes people think you are unstable or a criminal yourself. It doesn't matter whether they can find you or not. They will ignore you if you sound arrogant or hostile because you sound just as bad as the accused.

ProfMac has the right idea here. Very intelligent approach to the situation.

I propose a solution of mixing ProfMac's solution with your website. We should promote ON your website the address of these 5 different avenues of mailing letters. BFL customers can go there to get the information (including a sample letter like ProfMac has supplied), and the addreses to mail to.

I agree 100% it is very important to take all name calling and vigilantism out of the equation. Not because it is the wrong mentality, but because it will get your efforts ignored. You can't fight fire with fire.

What do you think, LostDutchman?

This is something that people will do because it doesn't cost them anything more than stamps. It is a realistic approach that could very well achieve some results.  Assuming you weren't trying to profit from your previous solution, then you should be up for this idea.

ProfMac, the next step would be acquiring the physical mailing addresses of the individuals/groups you mentioned:

• Directly to the court
• To the attorney representing the plaintiff
• To BFL itself.
• Sonny's parole office
• BFL's attorney

Imagine the Judge of that court trial getting a copy of all our hundreds of letters stating how we have been treated. Sonny will likely get jail time.

[ProfMac]

PARIIALLY UNTRUTHFUL?

YOU CALLING ME A LIAR?

PUT UP OR SHUT UP!

I AM NOT IN THE MOOD!

Yes, I am.  You are going to try to make it appear that BFL is doing something that they are not by using an overseas posting shop, according to your web page, and you mention the risk of getting caught.  It is fraudulent.

You are getting down in the mud with them.  I think it will hurt your chances. 

It will give the BFL people the opportunity to say that they aren't really that bad, that they are victims of a smear campaign.  It is a step backwards that gives them an advantage.

I know you're angry.  I think you should use your anger to energize your planning against BFL.  I think you are letting your anger muddy your mind, and diminish your chance for success.

[LostDutchman]

Specimen:

Code:

Dear BFL

I have an order for 3 @ Monarch bitcoin miners placed on Feb. 18, 2013 for $5,650.  Prompt delivery time was 
a dominant portion of the value of this order, and the order is now unfit for the purposes for which we initiated 
business with each other.

I have been harmed by this delay, and I am disturbed to read court documents, for example, that Sonny has 
purchased a house with order payments before my order was fulfilled.

At this time, I require a prompt refund of my order.

Sincerely,

John Q Customer

ProfMac has the right idea here. Very intelligent approach to the situation.

LostDutchman, I understand your frustration with the situation (as I am in it myself with BFL), but the thing I too have learned is that acting out your emotions, even if justified, does not serve to help you. It just makes people think you are unstable or a criminal yourself. It doesn't matter whether they can find you or not. They will ignore you if you sound arrogant or hostile because you sound just as bad as the accused.

I propose a solution of mixing ProfMac's solution with your website. We should promote ON your website the address of these 5 different avenues of mailing letters. BFL customers can go there to get the information (including a sample letter like ProfMac has supplied), and the addreses to mail to.

I agree 100% it is very important to take all name calling and vigilantism out of the equation. Not because it is the wrong mentality, but because it will get your efforts ignored. You can't fight fire with fire.

What do you think, LostDutchman?

You don't understand.

There is no emotion involved on my end at all.

This ain't personal; this is business.

It is obvious to me that Bitcoiners are perfectly OK with allowing BFL continuaing its financial rampage and rape of the internet and therefore so be it.

You can fight fire with fire; it's done all the time but evidently not in the Bitcoin world.

Ever heard of a backburn?

Standard forest fire fighting technique.

You know how that letter reads to me?

Like this:

(Voce Truman Capote)

"Dear Mr, Bfl, DEAR Mr. BFL.

I have written you several times requsting that you send back my money and I have not received a reply or a refund.

I know you must have been so very busy and may have just overlooked my request, so with apologies I ask you again to please send me back my money. (I don't want to hurt your feelings and we can still be freinds!)

Alas, if you don't send me back my money I have to talk to my attorney who is a really terrible man who will write you a horrible demand letter and I hate to have him do that because it will hurt your feelings and might put you off your lunch.

I don't want to do these things because you are such nice people and I do so want to remain freinds, so could you just return my money and I won't even tell anyone because I don't want to hurt your reputation in any way.

Pleaase have a nice day and when you get around to it plese send me back my money, mkay?

Thank you and hoping our freindship lasts through all eternity.

Signed:

Fucked BFL Customer."

[LostDutchman]

PARIIALLY UNTRUTHFUL?

YOU CALLING ME A LIAR?

PUT UP OR SHUT UP!

I AM NOT IN THE MOOD!

Yes, I am.  You are going to try to make it appear that BFL is doing something that they are not by using an overseas posting shop, according to your web page, and you mention the risk of getting caught.  It is fraudulent.

You are getting down in the mud with them.  I think it will hurt your chances. 

It will give the BFL people the opportunity to say that they aren't really that bad, that they are victims of a smear campaign.  It is a step backwards that gives them an advantage.

I know you're angry.  I think you should use your anger to energize your planning against BFL.  I think you are letting your anger muddy your mind, and diminish your chance for success.

"Yes, I am.  You are going to try to make it appear that BFL is doing something that they are not by using an overseas posting shop, according to your web page, and you mention the risk of getting caught.  It is fraudulent."

Oh, really?

Like BFL ISN"T robbing Bitcoin users blind?

Actually, I'm not going to suggest that BFL is donig a damn thing and never said I would.

You boviously have no clue how this kind of SEO works.

some other fool suggested tht I was going to try to embarrass BFL online.

Nope.

Not even going to metnion the problems.

I have never seen such a bunch of namby-pamby, no-ball pussies outside of the old Pink GArter as I see in the Bitcoin world.

"Oh, BFL fucked me?"

"Well, yeah, but I only want to play FAIR with tht lot of scumbickets, reprobates, felons and thieves".

"I want to hold the MORAL HIGH GROUND!"

This while BFL continues its rape an pillage of the crypto world.

"Moral High Ground" my ass.

Pussies and scared shitless more like it.

What don't you all just bend over again for BFL?

oh wait

That's already what you are doing.

never mind

[ProfMac]

There is no emotion involved on my end at all.

I think you're drowning in anger.  I've been there, the energy from righteous anger can help push a mighty effort.  I think it is good for you to embrace it and use it.

Ever heard of a backburn?

Standard forest fire fighting technique.

Blackburn removes fuel in a controlled way before the wild-fire gets there.  Typically, they are small enough to stay under control.  Usually, there is an attempt to prevent collateral damage.

You know how that letter reads to me?

Like this:

(Voce Truman Capote)

Cool, I've never been read by Truman Capote.  Though I'd really like to go for Morgan Freeman.

You don't seem to think that BFL will do anything because of the letter.  You think it reads a bit wimpy and over civilized.  I think you are 100% right.  The letter isn't written for BFL, it is written for the judge and the prosecutor.  It just has to address BFL and be sent to them.  It is to make the judge and prosecutor go for the kill. 

It is up to you if you want to thump your chest and type in all caps, or want to cause a maximum punishment for Sonny.

[LostDutchman]

There is no emotion involved on my end at all.

I think you're drowning in anger.  I've been there, the energy from righteous anger can help push a mighty effort.  I think it is good for you to embrace it and use it.

Ever heard of a backburn?

Standard forest fire fighting technique.

Blackburn removes fuel in a controlled way before the wild-fire gets there.  Typically, they are small enough to stay under control.  Usually, there is an attempt to prevent collateral damage.

You know how that letter reads to me?

Like this:

(Voce Truman Capote)

Cool, I've never been read by Truman Capote.  Though I'd really like to go for Morgan Freeman.

You don't seem to think that BFL will do anything because of the letter.  You think it reads a bit wimpy and over civilized.  I think you are 100% right.  The letter isn't written for BFL, it is written for the judge and the prosecutor.  It just has to address BFL and be sent to them.  It is to make the judge and prosecutor go for the kill.  

It is up to you if you want to thump your chest and type in all caps, or want to cause a maximum punishment for Sonny.

"Thump my chest"?

Right.

I take it you've never heard Truman Capote speak!

Tyr this on for size!:

https://www.youtube.com/watch?v=ySkwEXDVgEg&list=RDySkwEXDVgEg#t=76

I know the difference between you and me now.

You are all about punishing Sonny.

You've made it personal.

I'm all about getting the money back for all those poor people scammed by BFL.

Get the money back first, punish Sonny later.

For me it ain't personal; it's business.

There will be lots of time to propely punish Sonny later.

Locking up Sonny at this point will not get one thin dime back for the people scammed by BFl.

The judge couldn't order it because he/she would have no power to do so.

Bend BFL over backwards and you might get some money back to the victims.

My plan could bend them like a pretzel but you do what you like.

[vayvanne]

LD, spam and that kind of pressure IMHO will give nothing. BFL should be punished legally as a company and in persons both. I more like the professor's approach though it is very first of steps what community could do. BFL took out very much of resources which could develop bitcoin industry and community too and should be set responsible in modern ways until the legal system elephant will stop this scam covered by hi-tech shawl.
Edit: I reported it as a scam on facebook yesterday.

[LostDutchman]

LD, spam and that kind of pressure IMHO will give nothing. BFL should be punished legally as a company and in persons both. I more like the professor's approach though it is very first of steps what community could do. BFL took out very much of resources which could develop bitcoin industry and community too and should be set responsible in modern ways until the legal system elephant will stop this scam covered by hi-tech shawl.
Edit: I reported it as a scam on facebook yesterday.

No.

Overloading their email box, melting down their phone system, causing a serious drop in SERPS and couple of other nifty effects will go a long way towards getting their attention. My  plan would cripple thier ongoing ability to do business.

[LostDutchman]

One thing I notice whch permeates all threads concering the BFL scam and that is "punishment" for BFL.

Punishment for BFL, its workers, shills anad associates is not on my agenda at all right now.

"Punishment" will be handed down by the courts.............................eventually.

I am not saying that BFL should not be punished but for the moment, let's get our priorities in order.

My goal is to force BFL to start issuing refunds where there is still money to refund.

Most who talk about punishment have made the issue a personal one.

Neither my partners nor myself have a single Satoshi, not a single dollar, not one thin dime and not one red cent at stake in this matter, having gotten our Minirig refunds some time back.

My goal is to make BFL's life so miserable that they beg me to stop and with the support of the community, I can indeed do that.

The lawsuits are going to take months, if not years to force an action and by that time, BFL will have had time to move assets, disguise wallets, spend down the corporate treasury and have things set up just right for a bankruptcy, which most likely would be what we in certain businesses call a "Straight Fuck You!, which means "The money is gone, we fucked up, we're broke, so have a nice day!"


I've see int before and so have you.

Terrahash come to mind?

We can't stop BFL from doing a Terrahash but we can maybe make all their lives miserable enough to force them into beginning refunds.

This aint' personal.

It's just business.

The Dutchman.

[ibminer]

One thing I notice whch permeates all threads concering the BFL scam and that is "punishment" for BFL.

Punishment for BFL, its workers, shills anad associates is not on my agenda at all right now.

"Punishment" will be handed down by the courts.............................eventually.

I am not saying that BFL should not be punished but for the moment, let's get our priorities in order.

My goal is to force BFL to start issuing refunds where there is still money to refund.

Most who talk about punishment have made the issue a personal one.

Neither my partners nor myself have a single Satoshi, not a single dollar, not one thin dime and not one red cent at stake in this matter, having gotten our Minirig refunds some time back.

My goal is to make BFL's life so miserable that they beg me to stop and with the support of the community, I can indeed do that.

The lawsuits are going to take months, if not years to force an action and by that time, BFL will have had time to move assets, disguise wallets, spend down the corporate treasury and have things set up just right for a bankruptcy, which most likely would be what we in certain businesses call a "Straight Fuck You!, which means "The money is gone, we fucked up, we're broke, so have a nice day!"


I've see int before and so have you.

Terrahash come to mind?

We can't stop BFL from doing a Terrahash but we can maybe make all their lives miserable enough to force them into beginning refunds.

This aint' personal.

It's just business.

The Dutchman.

From website:

What we at WeDemandJusticeFromBFL.com are going to do is this………………….
….we are going to flood the internet and I mean FLOOD, not with hundreds, not with thousands, not with hundreds of thousands but with MILLIONS of forum posts all across the world and the internet, with each and every post containing some kind of contact information for BFL.

There is no way to launch a campaign/attack like this against BFL and not punish them in some way.

Regardless, I am curious what else would be contained in these millions of posts besides contact info?  would this be BFL bashing posts or BFL loving posts (to make it appear like BFL).  If bashing, most are not going to believe its BFL making the posts.  If its 'BFL is the greatest' types of posts, wouldn't this just help them with SEO, publicity, and possibly sales?

I am also not entirely sure about the anticipated meltdown of ISP's and Forum mods. Do you realize how many emails it would take for an ISP to feel the need to go in and block email addresses. And even if they did, it would probably be temporary. These would be legitimate complaint emails in your scenario - not necessarily something ISP's or spam filters would even care about.  

BFL will quickly change its number and invalidate your posts and if the emails overwhelmed them, I wouldn't doubt seeing them change their domain from butterflylabs to BFL-labs.com or just changing their email aliases entirely and then making an announcement about hackers trying to attack them, etc, etc. and play the pity card. Again, invalidating all of the prior posts with old contact info. They are not just going to sit down and say "ah, they got us".  You would need to continually do something like this for a long time to really have any type of impact, and I don't really see it being a business-crippling impact.

I would also think this type of campaign (or attack) would really just cause more people to look into who/what BFL is (especially if they know nothing about Bitcoin)... and I am not sure BFL is the best company I want people researching when they first learn about what Bitcoin is - not the best example.  

[LostDutchman]

One thing I notice whch permeates all threads concering the BFL scam and that is "punishment" for BFL.

Punishment for BFL, its workers, shills anad associates is not on my agenda at all right now.

"Punishment" will be handed down by the courts.............................eventually.

I am not saying that BFL should not be punished but for the moment, let's get our priorities in order.

My goal is to force BFL to start issuing refunds where there is still money to refund.

Most who talk about punishment have made the issue a personal one.

Neither my partners nor myself have a single Satoshi, not a single dollar, not one thin dime and not one red cent at stake in this matter, having gotten our Minirig refunds some time back.

My goal is to make BFL's life so miserable that they beg me to stop and with the support of the community, I can indeed do that.

The lawsuits are going to take months, if not years to force an action and by that time, BFL will have had time to move assets, disguise wallets, spend down the corporate treasury and have things set up just right for a bankruptcy, which most likely would be what we in certain businesses call a "Straight Fuck You!, which means "The money is gone, we fucked up, we're broke, so have a nice day!"


I've see int before and so have you.

Terrahash come to mind?

We can't stop BFL from doing a Terrahash but we can maybe make all their lives miserable enough to force them into beginning refunds.

This aint' personal.

It's just business.

The Dutchman.

From website:

What we at WeDemandJusticeFromBFL.com are going to do is this………………….
….we are going to flood the internet and I mean FLOOD, not with hundreds, not with thousands, not with hundreds of thousands but with MILLIONS of forum posts all across the world and the internet, with each and every post containing some kind of contact information for BFL.

There is no way to launch a campaign/attack like this against BFL and not punish them in some way.

I don't care about any "punishment" aspect.

Regardless, I am curious what else would be contained in these millions of posts besides contact info?  would this be BFL bashing posts or BFL loving posts (to make it appear like BFL).  If bashing, most are not going to believe its BFL making the posts.  If its 'BFL is the greatest' types of posts, wouldn't this just help them with SEO, publicity, and possibly sales?

Makes no difference but mere contact info with a statement like "Contact us for the best in ASIC mining euipment!"  No, a few bazillion posts quickly drive down their SEPS, piss off people and no one is going to buy from a company they're already pissed off at.

BFL will get "loved" to death.  It is a common misconception that oper-promotion actually leads to increased sales.  It does not.

I am also not entirely sure about the anticipated meltdown of ISP's and Forum mods. Do you realize how many emails it would take for an ISP to feel the need to go in and block email addresses. And even if they did, it would probably be temporary. These would be legitimate complaint emails in your scenario - not necessarily something ISP's or spam filters would even care about. 

ISP blocking is not important or significant.  It can happen though by simply shutting down deliveries of all emails to BFL.  I've seen it happen.  The main thing is to clog up BFL's inbox with so much shit that they can't handle it.  This is easily done.

BFL will quickly change its number and invalidate your posts and if the emails overwhelmed them, I wouldn't doubt seeing them change their domain from butterflylabs to BFL-labs.com or just changing their email addresses entirely and then making an announcement about hackers trying to attack them, etc, etc. and play the pity card. Again, invalidating all of the prior posts with old contact info. They are not just going to sit down and say "ah, they got us".  You would need to continually do something like this for a long time to really have any type of impact, and I don't really see it being a business-crippling impact.

No, they won't.  there will be far too many posts out there for them to try to play the Google "invalidate links" game.  Just can't be done.

So they change all the domains and lose all the SERPS connected with the old ones.  Good deal!  We'll know if and when we do that and we then change our postings and go after the new ones.  They'd have to publish the new info someplace or forward the old domains to the new and well, there ya go!.

I would also think this type of campaign (or attack) would really just cause more people to look into who/what BFL is (especially if they know nothing about Bitcoin)... and I am not sure BFL is the best company I want people researching when they first learn about what Bitcoin is - not the best example.   

Yeah, people will look and when they Google BFL the first couple of dozen pages acre littered with posts from this forum and others describing what a shitload of dirtbags BFL really is, so few if any worries on that count.  Mure buuthurt for BFL!

You need to undersantd that this kind of campaign is good old-fashioned Negative SEO; strictly blackhat stuff and it works.

I really works and it workd well.

Try it, you'll like it!

[JorgeStolfi]

Sigh.

I have tweeted a warning about the BFL scam to my Brazilian followers (if there are still any active ones), with links to this thread and the "20 million mail fraud" thread.  That is the kind of appropriate action anyone can take to help.

Spamming the BFL inbox is sort of OK, but will only give them an excuse to ignore client emails. 

Pestering CoinDesk, the Bitcoin Foundation, and other bitcoin outfits that are guilty by their silence on the matter would only be fair, and may be more effective.

But mass spamming other sites and people who have nothing to do with bitcoin or BFL is a terrible idea.  Add up the time spent by users and admins of all the sites you intend to spam, and it will easily be more than the amount BFL owes, and certainly much more than what they are likely to return as a result of this campaign (which is quite probably zero).

It is not a matter of "keeping the high moral groud in the fight against BFL": people who do that sort of thing for that sort of motive are scumbags, no matter what their grievances are.

(And, since I or my employer may end up being a target of that spamming, of course I have all the right to complain here.)

[ibminer]

I dunno man, these types of blackhat techniques have worked in the past but I am not optimistic with this working today.

Clogging up an inbox isn't as easy as it once was, there are many rules that could be created to block out or move these types of emails to their own folder... most of them are going to be people screaming 'stop posting' or would contain words like 'forum' & 'post' & 'stop', etc. They would be able to filter out a good chunk of the complaints generated from these posts.

In an extreme case, they could create a contact form on the website as the only method to contact them and block all emails to their direct inbox, of course while still specifically allowing frequent domains they communicate with directly to their inbox.

IMO, I see a lot of potential failure points in your plan, although I do agree that it could potentially lower their search rankings because most search engine bots out there do not like this type of post spamming, but your also increasing the amount of times butterflylabs is mentioned across many many sites on the internet, so I feel like it could be a double-edged sword. I would also think a lot of forum mods/admins would be removing these posts before search engines even cared about them?

In any case, I do hope BFL gets what they deserve.

[LostDutchman]

I dunno man, these types of blackhat techniques have worked in the past but I am not optimistic with this working today.

Clogging up an inbox isn't as easy as it once was, there are many rules that could be created to block out or move these types of emails to their own folder... most of them are going to be people screaming 'stop posting' or would contain words like 'forum' & 'post' & 'stop', etc. They would be able to filter out a good chunk of the complaints generated from these posts.

Nope.  Too many emails delivered from too many different ISPs, different content in each email.  No way to block them.

In an extreme case, they could create a contact form on the website as the only method to contact them and block all emails to their direct inbox, of course while still specifically allowing frequent domains they communicate with directly to their inbox.

So what?  The complainers will simply use the contact form and soon overlaod it as well.

IMO, I see a lot of potential failure points in your plan, although I do agree that it could potentially lower their search rankings because most search engine bots out there do not like this type of post spamming, but your also increasing the amount of times butterflylabs is mentioned across many many sites on the internet, so I feel like it could be a double-edged sword. I would also think a lot of forum mods/admins would be removing these posts before search engines even cared about them?

Makes no difference if they do remove them

They still complain.

No double'edged sword here at all!  It's alll bad for BFL.

Look man, I got a PH fucking D in Negative SEO and I know what I am doing.

There are enough open forums blogs and wikis that zillions of the posts stick, even if only for a short time.

Google caches them and even if down the road, the search results lead to a dead link, the still affect BFL's SERPS.

In any case, I do hope BFL gets what they deserve.

If I get enough support rom the community, if the community decides what it is willing to do to get BFL to start refunidng it will indeed get what it deserves and it will come right out of their deep pockets before the money is gone.

The clock is running.

The Dutchman.

[colinistheman]

LostDutchman, If you get the money and donations to fund your campaign then you are free to do as you please of course. But what happens if you don't get the funding? Are you going to do anything? or nothing at all? There's a lot of words spoken on this page about what "is going to be done to BFL". But words are different from actions. I personally disagree with your method for the record, but again, you are free to do as you wish.

Please stop being so defensive and stop attacking others who even slightly disagree with you. It's making you look bad. You seem to be one big ball of pent up hate and anger and it's tiresome to read over and over.

My OP was made to provide the facts of the court case and to allow the user to decide for themselves what to think about BFL.

So again, what happens if you don't get the funding to do your plan?

[LostDutchman]

LostDutchman, If you get the money and donations to fund your campaign then you are free to do as you please of course. But what happens if you don't get the funding? Are you going to do anything? or nothing at all? There's a lot of words spoken on this page about what "is going to be done to BFL". But words are different from actions. I personally disagree with your method for the record, but again, you are free to do as you wish. Please stop attacking others who disagree with you. You seem to be one big ball of pent up hate and anger.

I have no "pent up hate and anger".

How "liberal" and poitically correct of you to suggest that going after a bunch of bottom feeding, scumbucket liars, robbers, theives, con men and crooks is an indicator of having "pent up hate and anger"!

I like that.

Pussified but original.

I am not "attacking" anyone; I have only replied reasonably and rationally to criticisms of my plan.

If there is no community support I will do nothing.

Nothing at all and BFL can go right on robbing, deceiving and stealing from both current and future members of the crypto community, continuing with the wild abandon it is engaging in now.

Won't be my problem.

Should that turn out to be the case, have fun in the courts; you'll certainly be there long enough, so you'd better learn to like it.

In the meantime of course, nothing at all will be done to "encourage" BFL to start refunding before the money is hidden andrtuns out.

In the meantime those owned money, who desperately need those funds returns will just have to suck it up.

I'll make my decision soon.

Have a nice day now, ya hear?

[ibminer]

Given the recent shady behavior of the Marketing group for BFL and what they did with "buttcoins".... am I putting on my tinfoil hat when thinking that the real LostDutchman could have sold his account to the BFL marketing group and now they are attempting to pull in funds for a positive marketing campaign using bitcointalk forum users funds and then later blaming things on technical issues with the software/proxies not working correctly and not making enough posts, resulting in a positive SEO campaign for BFL  

 

[colinistheman]

Given the recent shady behavior of the Marketing group for BFL and what they did with "buttcoins".... am I putting on my tinfoil hat when thinking that the real LostDutchman could have sold his account to the BFL marketing group and now they are attempting to pull in funds for a positive marketing campaign using bitcointalk forum users funds and then later blaming things on technical issues with the software/proxies not working correctly and not making enough posts, resulting in a positive SEO campaign for BFL  

 

This makes more sense.

I too wondered if his technique wouldn't backfire and actually help BFL.

[LostDutchman]

If there is no community support I will do nothing.
...
Won't be my problem.

That's what I thought. Please take a hike.

And Good Morning to you there, Colin!

I see you're in fine form so you must have eaten your Cheerios!

One thing though, you're really supposed to put milk on them, not whiskey or beer.

Only real men put whiskey or beer on their Cheerios.

[colinistheman]

Hearts and kisses to you too. Good-bye!

Go start your own thread please

[LostDutchman]

Hearts and kisses to you too. Good-bye!

Go start your own thread please

See ya later Colin!

Have fun!

Now back to the main theme of this little internet syposium!

Any ieas what to do about BFL and Sonny besides sit back and wait for the court dockets to count down?

[Lassi]

Given the recent shady behavior of the Marketing group for BFL and what they did with "buttcoins".... am I putting on my tinfoil hat when thinking that the real LostDutchman could have sold his account to the BFL marketing group and now they are attempting to pull in funds for a positive marketing campaign using bitcointalk forum users funds and then later blaming things on technical issues with the software/proxies not working correctly and not making enough posts, resulting in a positive SEO campaign for BFL  

 

Case details