Satchel,
There is a press release that the Federal Trade Commission just issued
regarding the Norvergence case at
http://www.ftc.gov/opa/2004/11/norvergence.htm . A copy of the actual
filing
of FTC vs. Norvergence is available at
http://www.ftc.gov/os/caselist/0423184/041104norvergecmplt.pdf .
I found it rather amazing that at least one company agreed to pay as
much as $340,000 for the Norvergence "Black Box". Exactly why a
company would sign such a huge deal without at least showing it to
their lawyer (who should have suspected fraud from the get-go) is
beyond me.
The complaint itself mainly seeks injunctive relief, in order to
release former Norvergence customers from their "Matrix Box"
leases. They have a pretty solid case for that, I believe.
Unfortunately, the FTC did NOT seek any temporary injunctive relief,
which means that any company that does not make lease payments until
the case is settled is still technically liable, and can be sued by
the banks holding the leases. Thus, it is quite possible that during
the interval period, those who are contractually bound to make
payments may very well be sued by these lease holders, lose, and have
such lawsuits upheld by freezing a company's assets, taking cash out
of their bank accounts, etc. Needless to say, this was a major
"oversight" by the FTC.
Those who live in a handful of states (Florida, Texas, New Jersey) are
in luck though. Each of those state's Attorney Generals have launched
suits against the leasing companies, and residents who hold contracts
in those states are not required to make lease payments, pending the
outcome of their investigation. Other states like New York, Illinois
and Colorado have also launched their own investigations, but have not
provided their state's consumers with any temporary injunctive relief.
The FTC complaint also seeks restitution of legal fees for Norvergence
customers, fines, penalties, and barring Norvergence from offering
leases again in the future. There is just one problem though. THERE IS
NO NORVERGENCE!!! The company was dissolved under Chapter 7 Bankruptcy
law. Other than the leasing companies, there is no one left to sue.
Norvergence has no one to represent them, because they no longer
exist. Period. Any consumer who is hoping to get any type of
compensation or restitution in this matter is basically SOL, insofar
as the law goes. At best, they may be able to get out of the rest of
their lease payments.
The law does not provide for restitution from a corporation that no
longer exists. The only way such a thing could be done is if a
complaining party can prove that the officers and shareholders of the
company intentionally set out to defraud them criminally. In that
case, consumers could go directly after the corporate officers and
shareholders of Norvergence. This is commonly known as "piercing the
corporate veil". In this particular action, no entity that I am aware
of has targeted the officers or shareholders for personal liability or
criminal prosecution though. It is very rare for any entity or
government agency to be able to be able to prove criminal intent in
cases such as these, so most don't even try. It would probably bust
the budget of most states or even the FTC itself to hire enough
lawyers to be able to build a winnable case of this kind. Even if they
did, the officers and shareholders of Norvergence likely have their
money packed away in Swiss bank accounts by now, so any award would
likely be meaningless to consumers.
The moral of this story is, don't depend on the government to bail you
out of a bad business deal, no matter how screwed up it is. Once they
have your money, it is likely gone for good. Do your due diligence on
matters of such importance. An ounce of prevention is worth a pound of
cure in matters such as these.
William Van Hefner
Editor - http://www.thedigest.com
> From: dor@writeme.com (Satchel Paige)
> Subject: Re: Any News on the Feds v. Norvergence?
> Date: 8 Nov 2004 21:34:47 -0800
> Organization: http://groups.google.com
> What kind of recourse do I have? I originally reported Norvergence
> to the FTC in September of 2003. I then posted Norvergence's fraud
> here to warn everyone about them and to ask everyone to report
> Norvergence to the FTC as well. Norvergence sued me. And because I
> could not afford to travel from California to New Jersey, let alone to
> hire a New Jersey attorney, a default judgement was passed against
> me.
> [TELECOM Digest Editor's Note: Good question. PAT]
[TELECOM Digest Editor's Note: Mr. Van Hefner, with no more
Norvergence, who is there now to enforce any judgment obtained
against Satchel Paige? Or is the judgment entered against him now
technically at least the property the Bankruptcy Trustee as one of
the 'assets' due the creditors of Norvergence, i.e. miscellaneous
recievables due Norvergence. My other question is, consider the
poor business people who paid out good money to the finance
companies. If, as we suspect, the leases are all overturned by
the court, then cannot the victims of the fraud (the business
people) turn on the finance companies and banks and sue them for
the return of what they *did* pay? In other words, the banks and
finance companies get it twice: once from (no more) Norvergence
and once from 'debtors' suing them to get back what they paid
in on their leases. I really hope the banks and finance companies
get the screws turned on them so badly; you know at least some of
them had to be in on the scam along with Norvergence. PAT]
William Van Hefner (vantek@thedigest.com)