[Announcement] Butterfly Labs

[sadpandatech]

Scum is scum...

Quoting this from here since I noticed Inaba just magiclly happened to not read the last part of David's post here and then the convo quickly moved away from the subject again......

Code:

davidspitzer 

Re: BFL SC / Jally first picture? 
September 19, 2012, 07:22:13 PM  #243  

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.. but according to the indictment, there was no offshore gaming, just people pretending to be associated with offshore games, when in fact they were simply taking people's money. No gambling at all was occurring, which is why the indictment/conviction was for mail fraud, not illegal gambling.

It's my understanding (but I am not a lawyer) that the government would not be able to get a prosecution for the offshore gaming (and Italy would not extradite if the US intended to prosecute on those charges), since it was legal in that jurisdiction and instead went for mail fraud, since the lotteries via mail were involved.

in the indictment though it states:

...From the Payment Accounts, at the direction of defendants VLEISIDES, HOUSTON, and EMMETT, defendant WALTHER and others known and unknown to the Grand Jury wrote checks falsely represented as lottery winnings and sent them back to the victims. The amount of the alleged "winnings" sent to each victim was far less than the amount the victim had sent in.

This would seem to indicate that the knowingly attempted to deceive people into thinking they had won a foreign lottery to induce them to send in more money. I hate to say this but the two accounts do not line up for me"

That's exactly what it indicates. And any person who can read is able to assertain that the two stated allegations are indeed different events.

I find it very hard to swallow that Inaba believes that the software/patent thing is at all what Mr. Sonny was alleged of doing for the past decade+..

Inaba's first statment of such is either a very purposefully driven misdirection or he is actually as naive as anyone else who would continue to support a company who has such a character playing any role in it.


..What role could Sonny possibly fill at BFL? He can't be a 'funding' partner as the courts found he had 'no ability' to pay any restitution. He certanly is not trustworthy to fill any sort of leadership role. Is he an engineer then? Did he design any of the circuits, software or facilitate any other such engineering function?




All said, I just feel bad for the hard working people who are being robbed of their dignity by either working for this company or giving this company money. That's why sadpanda is sad.

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[hahahafr]

@Inaba/BFL_Josh:
What's your current plan to counter the new Avalon ASIC giving 60 GH/s @ $1299?
Are you not afraid?

[MrTeal]

@Inaba/BFL_Josh:
What's your current plan to counter the new Avalon ASIC giving 60 GH/s @ $1299?
Are you not afraid?

Why would BFL be afraid of the Avalon ASIC?

[crazyates]

@Inaba/BFL_Josh:
What's your current plan to counter the new Avalon ASIC giving 60 GH/s @ $1299?
Are you not afraid?

Why would BFL be afraid of the Avalon ASIC?

Because it offers 50% more speed for the same price. However, those numbers are only for the first 300 preorders. Once they get into the full swing of things, the price will go up to $1999, which puts it right in line with BFL's GHs/1kUSD. I see nothing for them to be "afraid" of.

[MrTeal]

@Inaba/BFL_Josh:
What's your current plan to counter the new Avalon ASIC giving 60 GH/s @ $1299?
Are you not afraid?

Why would BFL be afraid of the Avalon ASIC?

Because it offers 50% more speed for the same price. However, those numbers are only for the first 300 preorders. Once they get into the full swing of things, the price will go up to $1999, which puts it right in line with BFL's GHs/1kUSD. I see nothing for them to be "afraid" of.

Yeah, but when the Avalon is released it will have recovered 0% of its NRE. I don't know BFL's books but estimates on here place the value of their preorders at over US$1M, they're going to have significantly more leeway to adjust prices than anyone else. Even if the Avalon starts becoming available for immediate shipment at 60GH/s @ $1299, nothing says that the Single won't be dropped to $800. The 7970 isn't $500 anymore, either.

[hahahafr]

The 7970 isn't $500 anymore, either.

Why the heck would you drop a 7970 for comparison here

[crazyates]

@Inaba/BFL_Josh:
What's your current plan to counter the new Avalon ASIC giving 60 GH/s @ $1299?
Are you not afraid?

Why would BFL be afraid of the Avalon ASIC?

Because it offers 50% more speed for the same price. However, those numbers are only for the first 300 preorders. Once they get into the full swing of things, the price will go up to $1999, which puts it right in line with BFL's GHs/1kUSD. I see nothing for them to be "afraid" of.

Yeah, but when the Avalon is released it will have recovered 0% of its NRE. I don't know BFL's books but estimates on here place the value of their preorders at over US$1M, they're going to have significantly more leeway to adjust prices than anyone else. Even if the Avalon starts becoming available for immediate shipment at 60GH/s @ $1299, nothing says that the Single won't be dropped to $800. The 7970 isn't $500 anymore, either.

They haven't ever dropped the price of their current Single, have they?

[BFL_Josh]

From what I know of the Avalon, the power requirements are going to make it only interesting to those that don't have to pay for power. Our units are optimized for power efficiency as well as performance, not just one or the other.

[Syke]

From what I know of the Avalon, the power requirements are going to make it only interesting to those that don't have to pay for power. Our units are optimized for power efficiency as well as performance, not just one or the other.

And how much power do they take?

[BFL_Josh]

The same or less than our current models.

[MrTeal]

The 7970 isn't $500 anymore, either.

Why the heck would you drop a 7970 for comparison here

Because the 7970 was the first of a new generation of GPUs. It debuted at $550. However, once the 680 dropped the price of the 7970 plunged.

Similarly, the marginal cost of an SC Single is not $1300. BFL is really the Intel of the FPGA (and now ASIC) scene. They have way more latitude to adjust prices than their competitors.

[hahahafr]

From what I know of the Avalon, the power requirements are going to make it only interesting to those that don't have to pay for power. Our units are optimized for power efficiency as well as performance, not just one or the other.

And how much power do they take?

The same or less than our current models.

You mean that they draw more power than your current models, don't you?
If not, and the Avalon draws less/same power or has more GH/s/$ than the Single SC, then we have a problem. I hope you have something in your bag in that case, at least something like a commercial gesture for your loyal pre-order customers.

We are only in September 2012, and we already have competitive offers against BFL. The ASIC competition might be stronger than we thought...
The difficulty throughout 2013 is gonna be scary.

[ShadowOfHarbringer]

From what I know of the Avalon, the power requirements are going to make it only interesting to those that don't have to pay for power. Our units are optimized for power efficiency as well as performance, not just one or the other.

Hey !
You just skipped answering to REALLY important questions !

Let me re-quote the original post:

WARNING
BFL CUSTOMERS

The CEO of Butterfly Labs is a convicted felon (25M USD worth of mail fraud.)

BFL hid this fact from its customers. (As they knew how the silly internet would react to this information.)

The information here presented would predictably make it much harder from BFL to acquire huge amounts of money through pre-orders.

(Yes, they have successfully taken in huge amounts of pre-paid pre-orders on untested, unreleased products, as can be easily verified.)

This post aims to collate the relevant, publicly available information and present it in a concise, readable format.


A concise summary of evidence:


(1) Chris Vleisides is the President/Director of Butterfly Labs Inc:

ENTITY DETAIL Name: BF Labs Inc.
...
President / Director: CHRIS VLEISIDES 2507 JEFFERSON KANSAS CITY, MO 64108

https://wyobiz.wy.gov/Business/FilingDetails.aspx?eFNum=149144214231010201167112190255028042109060235081

(2) Mr. Vleisides and associates orchestrated a massive mail order scam that ran from 1990 to 2006, causing a loss of at least 19M USD out of the ~25M USD invested in the scheme:

Sonny Chris Vleisides, 39, previously of Kansas City, MO was arrested in 2007 and held two years in Italy before he was extradited to the United States.
Vleisides was sentenced to 14 months in prison followed by three years supervised release after pleading to one count of mail fraud.

https://postalinspectors.uspis.gov/radDocs/PressRoom/nr110114.htm

(3) It has been established that Mr. Vleisides implicated in the mail order scam and Vleisides of BFL is the same person:

Sonny Vleisides is associated with BFL and it's the same Sonny listed in the case documents.  He was involved in off shore gaming in the capacity of selling and providing software engineering to companies that did the actual offshore gaming (there is even a US patent application for the process). The industry came under attack (as we all remember) around that time, and Mr. Vleisides was caught up in the process as well as a good portion of the industry based in Costa Rica.

Although this may be cause for concern to some, the fact is that we're a robust company with 22 employees.  One of them has a colorful background in offshore libertarianism.  If I thought there was even the possibility of something unsavory going on within BFL, you can rest assured I would a) not be part of it and b) would let everyone know it.

The reality is, we are legitimate, we have released revolutionary products and we are going to release more revolutionary products.  I was made aware of this back story prior to my employment and I evaluated it and concluded that it was immaterial to the business at hand and thus joined BFL.  There was nothing hidden from me and Sonny has always answered questions and been completely open about his past, but I think we can all agree that it's not something you just announce to the world.

https://bitcointalk.org/index.php?topic=109349.msg1202784#msg1202784

Inaba is an employee of Butterfly Labs Inc, who posts on these forums under the names inaba and BFL_Josh.


(4) The mechanics of the scam, per DOJ Agent testimony:

A joint investigation involving the IRS-CID and the United States Postal Inspection Service (USPIS), revealed that from at least 1990 through July 2006, SONNY VLEISIDES, James Ray Houston, Dennis Emmett, William Cloud, Henry Walther, Scott Henry Walther, and others committed a massive international lottery scam using the following company names: Shamrock Agency, German Swiss Group, World Expert Fund, Mutual Medical Insurance Co, Old Amsterdam Trust Co, Euro American Fax Co, European Union Commission, EU American Payment Co, Global Search Network, North American Foreign Payments Services, Wor'dwide Verification Service, and others. VLEISIDES ran the scheme along with Houston and Emmett. VLEISIDES, Houston and Emmett, who were all located in Costa Rica, worked with mailing houses which, at the direction of VLEISIDES, Houston, and Emmett, sent out tens of thousands of mailings to victims in the United States, many of whom were elderly. The mailings contained false statements, half truths, and omissions, and induced the victims to participate in various international lotteries, falsely stating that if the victims participated, they were guaranteed to win or had a very good chance to win. The mailings directed the victims to send their money to Ireland, at d the Netherlands, among other locations, where William Cloud had set up addresses with commercial mail receiving agencies and individuals to forward the money, eventually, back to the United States. After receipt at the commercial mail receiving agencies, the victims' money was sent to Henry Walther, who, along with his son Scott Henry Walther, deposited the money into various bank accounts and then distributed it as directed by VLEISIDES, Houston, and Emmett. Some of the money was spent on furthering the criminal activity. Some of the money was paid out to victims in small-dollar checks that the co-schemers misrepresented to be lottery winnings. The rest of the money was paid out to the co-schemers and others for their own use. VLEISIDES and the other defendants did not buy any lottery tickets, and the vast majority of the victims lost the money they sent. The total loss from the scheme is in excess of $19 million.

...

An analysis was done on approximately twenty of the bank accounts established in the United States at the direction of VLEISIDES and his co-schemers. The analysis revealed, in summary, that the victims' money was first deposited into accounts established by the co-schemers at numerous banks in accounts with names that sound like official lotteries: SHAMROCK AGENCY, WORLD EXPERT, OLD AMSTERDAM, GERMAN SWISS, and EUC. (Hereinafter, accounts at this first layer will be referred to as "Deposit Accounts.") The co-schemers obtained over $19 million from tens of thousands of victims and deposited them into these accounts. After the co-schemers deposited the victims' money into the Deposit Accounts, they transferred the money to the next layer of accounts, hereinafter referred to as "Payment Accounts." These accounts were in names that included NORTH AMERICAN PAYMENT and EU PAYMENT SERVICE. From the Payment Accounts, the co-schemers wrote checks represented as winnings and sent them back to the victims. The amount of the alleged "winnings" was far less than the amount the victims sent in - for the over $19 million going into the accounts from victims, only approximately 20% was sent back to victims in the form of "winning" checks. The co-schemers transferred some of the money from the Deposit Accounts and Payment Accounts to the next layer of accounts, which will hereinafter be referred to as "Syphon Accounts." The co-schemers wrote checks (or used wire transfers) from the Lottery Accounts and the Payment Accounts to the Syphon Accounts, which were in names that included WESTERN INTERNET, BUTTERFIELD, CARNEGIE and HENRY WALTHER ATTORNEY WIRE ACCOUNT. Money from the Syphon Accounts was used to continue the scheme by paying scheme expenses, as well as to provide benefits to the co-schemers. The co-schemers also took money at each layer in the form of checks to cash, checks to themselves, or checks to the payment of personal or scheme expenses.

http://www.scribd.com/doc/106417808/Affidavit-for-Extradition-Warrant

(5) Mr Vleisides, the CEO of Butterfly Labs is forbidden from soliciting funds according to the terms of his parole.

September 15, 2010

UNITED STATES OF AMERICA v. SONNY VLEISIDES

...
The defendant is hereby placed on supervised release, effective immediately, for a term of three years under the following terms and conditions:
...
The defendant shall not engage, as whole or partial owner, employee or otherwise, in any business involving loan programs, gambling or gaming activities, telemarketing activities, investment programs or any other business involving the solicitation of funds or cold-calls to customers without the express approval of the Probation Officer prior to engagement in such employment.
...
All fines are waived as it is found that the defendant does not have the ability to pay a fine.
...
As directed by the Probation Officer, the defendant shall provide to the Probation Officer: (1) a signed release authorizing credit report inquiries; (2) federal and state income tax returns or a signed release authorizing their disclosure and (3) an accurate financial statement, with supporting documentation as to all assets, income and expenses of the defendant. In addition, the defendant shall not apply for any loan or open any line of credit without prior approval of the Probation Officer.
...
The defendant shall not transfer, sell, give away, or otherwise convey any asset with a fair market value in excess of $500 without approval of the Probation Officer until all financial obligations imposed by the Court have been satisfied in full.
...
Upon a finding of violation of probation or supervised release, I understand that the court may (1) revoke supervision, (2) extend the term of supervision, and/or (3) modify the conditions of supervision.

http://ca.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20100915_0004129.CCA.htm/qx

Thus, it can be seen the CEO of Butterfly Labs is likely* in violation of his parole.

* (Unless given express prior approval from his probation officer on a number of counts.)


To return to the first point, the CEO of BFL is a convicted felon and a scammer, as should be evident from the above.

I sincerely hope BFL is not simply a preorder scam, and I hope BFL does everything in their power to show that they're in fact not.


However, alarm bells should be ringing, and red lights flashing all over the place. This could be the biggest, and by far most professional scam yet.

For the time being, and under the weight of the public and indisputable evidence presented above, it seems prudent to say:

Do not order ASIC "Supercomputers", or other unreleased products from Butterfly Labs Inc.

This post summarizes what is known at the present time. This thread will be updated with new information as it becomes available.


Notes:

(1) This summary was originally posted to: Bryan Micon's List of Bitcoin Scammers, Shills, and Users Not To Trust IMO

Can we get an official explanation  please ? Are you scam or not ?

[flower1024]

the official answer from BFL_Josh was that he would leave if it would be a scam.
as he didn't leave: it is answered.

[ShadowOfHarbringer]

the official answer from BFL_Josh was that he would leave if it would be a scam.
as he didn't leave: it is answered.

Not good enough.

Also, what about the other guy which (was ?) involved in 25M fraud ?

[flower1024]

the official answer from BFL_Josh was that he would leave if it would be a scam.
as he didn't leave: it is answered.

Not good enough.

Also, what about the other guy which (was ?) involved in 25M fraud ?

not good enough != not answered
would there be any answer you would accept? i guess no.

[tbcoin]

https://bitcointalk.org/index.php?topic=110868.0

[BFL-Engineer]

Dear ShadowOfHarbringer,

Usually I don't respond to unfriendly posts, but maybe this one needs a bit of addressing. We've had the honor of having Sonny in our corporation
for the past year. He is a bright and honorable person who had come face to face with strong forces behind the scenes without knowing. Many movies
have been made to try and demonstrate how governments and lobbying powers operate. They can kill, sabotage, prosecute or pretty much do anything
they desire without consequences as they have the power, money and weapons to make their point.

The United States Government does not recognize international bounderies when it comes to its interests and demands. The attack on the PirateBay
servers in Sweden is a good instance. Should the owners of PirateBay been Americans, I'm sure they'd already been serving for life in some prison in USA,
under charges of money-laundry, tax evasion (ads on the site), child pornography and so on and so forth. It's easy to hurt people who are powerless.
Even in France this may happen, eventhough on a much smaller scale ( I can't recall any at this point ).

Regarding whether we are a scam or not, the several thousand shipped units can speak for itself. We've used the experience gained in mass production
of our singles in our SC production cycle (we've got a MyData Pick-And-Place and an Oven for high-speed and high-volume inhouse assembly). Someone
mentioned the backlog is already 5,000. On a production speed of 500 units a day for instance, 5,000 will only take 10 days. We've already prepared the
infratructue for very high volume production, since the great portion of the orders will come in after the SC is released to the public. 5,000 units is not much
compared to orders we expect to receive after SC release, so we're very ready for it.

I hope this message has addressed some of your questions.


Regards,
Nasser

[ShadowOfHarbringer]

the official answer from BFL_Josh was that he would leave if it would be a scam.
as he didn't leave: it is answered.

Not good enough.

Also, what about the other guy which (was ?) involved in 25M fraud ?

not good enough != not answered
would there be any answer you would accept? i guess no.

Of course there is.

But for now i have not heard **ANY** real explanation from them. "I would leave if it would be a scam" is simply NOT any kind of explanation.

[ShadowOfHarbringer]

Dear ShadowOfHarbringer,

Usually I don't respond to unfriendly posts, but maybe this one needs a bit of addressing. We've had the honor of having Sonny in our corporation
for the past year. He is bright and honorable person who had come face to face with strong forces behind the scenes without knowing. Many movies
have been made to try and demonstrate how governments and lobbying powers operate. They can kill, sabotage, prosecute or pretty much do anything
they desire without consequences as they have the power, money and weapons to make their point.

The United States Government does not recognize international bounderies when it comes to their interests and demands. The attack on the PirateBay
servers in Sweden is a good instance. Should they owners of PirateBay been Americans, I'm sure they'd already been serving for life in some prison in USA,
under charges of money-laundry, tax evasion (ads on the site), child pornography and so on and so forth. It's easy to hurt people who are powerless.
Even in France this may happen, eventhough on a much smaller scale ( I can't recall any at this point ).

Regarding whether we are a scam or not, the seveal thousand shipped units can speak for itself. We've used the experience gained in mass production
of our singles in our SC production cycle (we've got a MyData Pick-And-Place and an Oven for high-speed and high-volume inhouse assembly). Someone
mentioned the backlog is already 5,000. On a production speed of 500 units a day for instance, 5,000 will only take 10 days. We've already prepared the
infratructue for very high volume production, since the great portion of the orders will come in after the SC is released to the public. 5,000 units is not much
compared to orders we expect to receive after SC release, so we're very ready for it.

I hope this message has addressed some of your questions.


Regards,
Nasser

And this is what i call an answer.
Maybe it isn't perfect, but at least it is a proper answer.

Thank you very much.