Butterfly Labs (BFL) raided today by U.S. Marshalls 9/19/14

[Furio]

Only issue the FTC is gonna run into is BFL did deliver some units and clearly was actively working on R&D (to some extent at least) so the only real solid case against them is misuse of company funds which is basically a hefty fine no jail time and more than likely no settlement on delayed orders, at most they may be forced to use any monarch cards they have in their cloud mining datacenter to send to customers which at 40 billion network difficulty would only make a few bucks a day. I doubt if any real repercussions will come about. One judge has already said he believes there was foul play and if he could he would lock the 3 of them up for the full 24 months.. yeah at best only 24 months for a multi million dollar scam so I seriously doubt if there will be any satisfactory justice for those of us that were duped.

"Some units", yes. But how many? If you only ship half of what you promised, while refusing refunds to the rest after you convince them to upgrade to the next, much more powerful hardware generation (in exchange for a 10% restocking fee, natch), that's a deceptive business practice as well. Not to mention the fact that NONE of the shipped units, aside perhaps from the first few that went to special friends, delivered the yield BFL promised, due to the extensive delays.

And don't forget their massive "burn-in" farms, which comprised up to 3% of the entire network and poured their proceeds directly into BFL's pocket. In financial circles, that's called the "skim", and it's illegal as hell (not least because of the additional shipping delays it caused - taking BTC that should have gone directly into customers wallets).

I don't know if failure to disclose that BFL purchased Eclipse way back in June 2012 - a fact that wasn't revealed until the release of a deposition - is deceptive as defined under law, but it was certainly unethical.

If they failed to disclose their millions in BTC income, because they believed it untraceable, then they might be looking at many years of turning large rocks into smaller rocks.

The BFL Three just got an extra week to provide the evidence demanded by the court. Come back next week when they ask for another week, but aren't granted it.

I completely agree with you, I also hope I'm wrong and they get locked up. I'm just looking at it from a legal perspective and while yes everybody knows they acted in a very deceptive way and drained I believe it was 40 million dollars from company funds to enrich their lifestyles it has to be proven beyond a reasonable doubt that they set out from the beginning to never deliver and since they did deliver on a fraction of what they sold and proved they were in active development it will be near impossible to prove what their mind set was. As I said I whole heartedly hope I'm wrong and that the judge is willing to bend the law a little to see them behind bars where we all know they belong however if that did happen  I am fairly confident the decision could easily be overturned by a different judge in appeals court. Although  they are clearly guilty as sin it's not what we know it's what can be proven in court and in my opinion the prosecution will have a difficult time proving what BFL's intentions were because they clearly stated no refunds and late deliverys can be claimed as simply manufacturering  delays the only solid case I see is misuse of company funds. Hopefully I'm wrong.

What BFL did and does, is in fact the corporate view on marketing, bullshit innovations, while earning very high profits, corporate America applauds BFL....

[Raskal]

That's right success at any and all costs, and a judicial system that can easily be twisted and manipulated so they can do it all "Legally" or at least their corporate lawyers spin on legality.

[ElGrandJefe]

They haven't been very successful at that so far. See ORDER regarding misconduct. Signed on 10/27/2014 by District Judge Brian C. Wimes. (Wells, Claudia)

The Court is aware of the growing lack of civility and professionalism among the parties in this case and, therefore, puts the parties on notice of several options available to it if such conduct continues. Through its inherent power to maintain respect and decorum, the Court is
granted the flexibility to equitably tailor a sanction that appropriately fits any misconduct. See Plaintiffs’ Baycol Steering Comm. v. Bayer Corp., 419 F.3d 794, 802 (8th Cir. 2005) (recognizing inherent power to sanction after notice and opportunity to be heard).
Available sanctions include a lecture from the Court, a monetary penalty, a recommendation by the Court to the appropriate bar association that the attorney be subject to disciplinary action, or a public reprimand directly by the Court and made available on the Court’s website. More extreme sanctions include disbarment or contempt findings.

The Court recognizes that this is a contentious and vigorously disputed lawsuit. But the Court expects the parties to treat each other, the Temporary Receiver (which is appointed by, and serves as, an officer of the Court), and the Court with professionalism and respect. Name calling, veiled suggestions, ad hominem attacks, and unfounded accusations directed at opposing counsel, the Temporary Receiver, or the Court will not be tolerated and potentially subjects a party to the above sanctions.

The parties, the Temporary Receiver, and the Court have a lot of work to accomplish in a little amount of time. The Court will not allow harassing and unbecoming conduct to distract from the orderly administration of this lawsuit. If it continues to observe inappropriate behavior,
the Court will not hesitate to schedule a show cause hearing to address the offending conduct .

IT IS SO ORDERED.

To quote Austin Powers, "Oh, behave!"

[Raskal]

They haven't been very successful at that so far. See ORDER regarding misconduct. Signed on 10/27/2014 by District Judge Brian C. Wimes. (Wells, Claudia)

The Court is aware of the growing lack of civility and professionalism among the parties in this case and, therefore, puts the parties on notice of several options available to it if such conduct continues. Through its inherent power to maintain respect and decorum, the Court is
granted the flexibility to equitably tailor a sanction that appropriately fits any misconduct. See Plaintiffs’ Baycol Steering Comm. v. Bayer Corp., 419 F.3d 794, 802 (8th Cir. 2005) (recognizing inherent power to sanction after notice and opportunity to be heard).
Available sanctions include a lecture from the Court, a monetary penalty, a recommendation by the Court to the appropriate bar association that the attorney be subject to disciplinary action, or a public reprimand directly by the Court and made available on the Court’s website. More extreme sanctions include disbarment or contempt findings.

The Court recognizes that this is a contentious and vigorously disputed lawsuit. But the Court expects the parties to treat each other, the Temporary Receiver (which is appointed by, and serves as, an officer of the Court), and the Court with professionalism and respect. Name calling, veiled suggestions, ad hominem attacks, and unfounded accusations directed at opposing counsel, the Temporary Receiver, or the Court will not be tolerated and potentially subjects a party to the above sanctions.

The parties, the Temporary Receiver, and the Court have a lot of work to accomplish in a little amount of time. The Court will not allow harassing and unbecoming conduct to distract from the orderly administration of this lawsuit. If it continues to observe inappropriate behavior,
the Court will not hesitate to schedule a show cause hearing to address the offending conduct .

IT IS SO ORDERED.

To quote Austin Powers, "Oh, behave!"

That proves my argument, it is saying they believe there was criminal negligence but are unable to prove any unlawful act. The statement about no slanderous statements being tolerated is sadly as much to protect the court as it is to protect the BFL's defendants from any defamation of character statements from being publicly released under penalty of law.

[ElGrandJefe]

It proves nothing of the sort. The FTC is in the process of proving the violations of its statutes before a court of law. The court obviously feels they have a sound case, or it never would have imposed the ex parte order in the first place.

Apparently, BFL's lawyers are attempting to use the same tactics of insult and intimidation that BFL themselves used against their customers, but the judge has said "Homey don't play dat." They're also trying a Hail Mary with their motion to dismiss ("with prejudice", which is a legal middle finger to the opposition). In light of the overwhelming evidence against them, this is the only tactic available to them, but has zero chance of succeeding.

Sorry, but you obviously have no idea what you're talking about. And even more likely, you're a BFL sockpuppet. Your constant attempts to downplay the charges seem to indicate something in that direction.

[Raskal]

It proves nothing of the sort. The FTC is in the process of proving the violations of its statutes before a court of law. The court obviously feels they have a sound case, or it never would have imposed the ex parte order in the first place.

Apparently, BFL's lawyers are attempting to use the same tactics of insult and intimidation that BFL themselves used against their customers, but the judge has said "Homey don't play dat." They're also trying a Hail Mary with their motion to dismiss ("with prejudice", which is a legal middle finger to the opposition). In light of the overwhelming evidence against them, this is the only tactic available to them, but has zero chance of succeeding.

Sorry, but you obviously have no idea what you're talking about. And even more likely, you're a BFL sockpuppet. Your constant attempts to downplay the charges seem to indicate something in that direction.

Did you even read the order you posted? I think you like most of us want BFL to get what we know they deserve so badly that you are just twisting what is clearly written in that order. I hope they do get locked up but if you read the documents that have been released with an unbiased mindset you too will see they aren't what you're thinking/hoping they are. Hopefully I'm wrong and the prosecution has some evidence that has yet to be made public that will get BFL the jail time they deserve but so far none of the evidence or court orders look very promising. Especially the undeniable fact that BFL website, while under temporary receivership, is still allowed to sell miners; if fraud charges were certain that website would have been immediately taken down. So I do hope BFL is held accountable but so far it doesn't look good.

[bitcoinvest]

i just visited their website just now http://www.butterflylabs.com/ and the announcement from the court is not there anymore?

what are the news?

[Syke]

i just visited their website just now http://www.butterflylabs.com/ and the announcement from the court is not there anymore?

what are the news?

The FTC will continue with its lawsuit. In the meantime, BFL will start to get back to business with 2 main changes. 1, no more pre-orders, and 2, prompt refunds. The Monarch product is no longer competitive, so anyone who has an order and doesn't request a refund is an idiot. BFL will get no new customers, because they are banned from taking pre-orders, and they cannot develop a new product without the pre-order cash.

[bitcoinvest]

thank you for your reply i wasn't awere of that and in fact i think it's good news.

but do you know what happens with all the other that we got ripped off and that is proven.
I received my 1 of two orders 1 year later
and i received refund on the other in usd and not in BTC even though such an information was not written.
I had a skype contac't with Dave and he told back then "i'm not going to refund you in BTC for no reason."
And when i told him you advertised something you can't provide and i paid you in btc so it's your problem you can't deliver not mine
he told me ok we didn't write this on the site but we will write it and we are not going to refund you in btc i felt been ripped off and that is proven not only for me...
so what will happen with all of us we got ripped of by them??

[eneloop]

You have to consult a lawyer.

[ElGrandJefe]

Your options:

You can join the class action lawsuit at Wood Law Firm - Info here.
You can still submit a complaint about BFL to the FTC, using this form. The FTC lawsuit is still ongoing, and any additional complaints they receive will strengthen their case.
You can get your own lawyer, as suggested above, but that would probably not be cost-effective.

In any case, you can make sure that everyone on the Internet knows what kind of company BFL is.

[janahoch]

In any case, you can make sure that everyone on the Internet knows what kind of company BFL is.

They knew before and that didn't stop many from sending them their hard earned.

[WhatsBitcoin]

Good to see BFL gonna get fucked here, they deserve it after all the bullshit they've caused me and many others. Luckily I was only invested for a couple hundred fiat wise.

[jh7phone]

I'm a little late but I was also a victim of BFL fraud... twice. I submitted a complaint to the Federal Trade Commission.

Firstly between Jan-Mar 2013 I ordered 6 30GH miners and 1 60GH miner for grand total of $6089.00. These orders took over 1 year to be delivered and were useless on delivery. Secondly On August 19, 2013 I ordered: two 600 GH/s Bitcoin Miners $4,680.00 each shipping & handling was $90.00 for a grand total of $9,450.00 (this order I paid in Bitcoin total was 96BTC) bitcoin was worth around $100 when I ordered. These miners were never delivered, we were given lies every few days saying they were almost ready. I wated over a year and during this time my 96btc was worth over $100000. When they offered refunds they only gave me back 1/6 of my bitcoins I paid or the USD equivlent at the time. I got 16.5BTC refunded from a 96BTC order, Butterfly Labs also kept the mining hardware for themselves. I was frauded out of $6089.00 and 79.5 bitcoins.

[clownius]

You ordered again after the first miner were a year late...

I feel for the people who went for upgrades due to how late the miners were who went to the upgrade.  But damn after a year late you ordered more....

[jh7phone]

You ordered again after the first miner were a year late...

I feel for the people who went for upgrades due to how late the miners were who went to the upgrade.  But damn after a year late you ordered more....

I'm still hurting all over from this  the 2 times bitcoin shot up in value my money was in the wallets of BFL. I'm still working on paying my debts off.

Who would of thought they would take a over a year (again) on the monarchs? I paid no attention to the bad attitude of Josh and the way he does not get along well with with his customers. I figured he's a just a geek with bad HR. I thought they were just incompetent and not scammers on the 30GH & 60GH miners, I had no idea they were using my miners to get more bitcoins.

I think the main reason I ordered a monarch was because there was no bitmain or spoondoolies at the time & the monarch was just as fast as the minirig which was $30000. It seemed like I could break even after a year, I was really into mining and bitcoin was new to me. They said they learned from their mistakes on the previous generation and the Monarch would not be delayed, they were confident when they opened pre-orders, then the delays started "two more weeks" he says. LIES! I even believed the story about the weak metal layer in the chips and stuff. 

[clownius]

Well you learned your lesson a very hard way sadly.  I do feel sorry for you still.

I watched the monarchs from their announcement.  I was looking for a good miner for home at the time and wanted to rack mount but decided against when i read more into their first ASIC experince.

In that way i got lucky thanks to bitcointalk.

But i missed the boat on mining.  At this point the miners around just draw too much power for my home wiring sadly.

So i lost too in the end

[bitcoinvest]

Your options:

You can join the class action lawsuit at Wood Law Firm - Info here.
You can still submit a complaint about BFL to the FTC, using this form. The FTC lawsuit is still ongoing, and any additional complaints they receive will strengthen their case.
You can get your own lawyer, as suggested above, but that would probably not be cost-effective.

In any case, you can make sure that everyone on the Internet knows what kind of company BFL is.

Thanks for the info i just send the complaint!

[bitcoinvest]

Here are the news i received by email

http://www.spencerfane.com//SnapshotFiles/fe6ec39c-1858-4244-8390-6b06950c2839/Subscriber.snapshot?clid=dd7f0e88-f2b4-4c82-91fd-07403facf79b&cid=e610c6a3-35d6-4e50-85e1-ffffd2d55145&ce=N%2f5mUKyduycDBpX19gxMSwdgnpW4zqhr


Thank you for your inquiry regarding BF Labs, Inc. d/b/a Butterfly Labs (“Butterfly Labs”). You have previously contacted this receivership and the purpose of this email is to provide you an update with respect to the same.

A preliminary injunction hearing was held on November 24-25, 2014. On December 12, 2014, the Court entered an order denying the FTC’s motion for preliminary injunction, asset freeze, appointment of receiver, and other equitable relief.

On December 23, 2014, the Court entered its order related to procedures for the wind down of the temporary receivership (“Wind Down Procedures Order”). Pursuant to the Wind Down Procedures Order, Butterfly Labs’ management has full control and authority over its business operations.

All inquiries related to operations, products, refunds, and shipping, should be directed to Butterfly Labs. For further information, you may visit the Butterfly Lab’s website at www.butterflylabs.com or email Office@butterflylabs.com.
------------

What will happen now?

[QuestionAuthority]

Here are the news i received by email

http://www.spencerfane.com//SnapshotFiles/fe6ec39c-1858-4244-8390-6b06950c2839/Subscriber.snapshot?clid=dd7f0e88-f2b4-4c82-91fd-07403facf79b&cid=e610c6a3-35d6-4e50-85e1-ffffd2d55145&ce=N%2f5mUKyduycDBpX19gxMSwdgnpW4zqhr


Thank you for your inquiry regarding BF Labs, Inc. d/b/a Butterfly Labs (“Butterfly Labs”). You have previously contacted this receivership and the purpose of this email is to provide you an update with respect to the same.

A preliminary injunction hearing was held on November 24-25, 2014. On December 12, 2014, the Court entered an order denying the FTC’s motion for preliminary injunction, asset freeze, appointment of receiver, and other equitable relief.

On December 23, 2014, the Court entered its order related to procedures for the wind down of the temporary receivership (“Wind Down Procedures Order”). Pursuant to the Wind Down Procedures Order, Butterfly Labs’ management has full control and authority over its business operations.

All inquiries related to operations, products, refunds, and shipping, should be directed to Butterfly Labs. For further information, you may visit the Butterfly Lab’s website at www.butterflylabs.com or email Office@butterflylabs.com.
------------

What will happen now?

Sounds like nothing happened to them because the FTC is a powerless piece of crap agency. You should have directed your complaint to Safeway or Walgreens. You would have seen more effective action taken against BFL.