The companies listed in the table below have licenses to use Blueberry Software’s technology via the Arbortext product Interchange. Their licenses are recorded in Arbortext’s License Key Database. See Exhibit AC if you wish to verify any of these listed companies.

Arbortext, however, did not report these sales to Blueberry nor pay Blueberry any royalties on these sales, as specified in the Blueberry/Arbortext Royalty Contract. This makes these licenses a form of pirated software.

Blueberry makes no complaints or accusations against these companies or entities, some of whom are State and Federal agencies, and is quite certain these companies paid Arbortext for their software in good faith.

It is Arbortext that is the guilty party. Although they have a contractual right to distribute Blueberry’s technology, they may only do so if Blueberry is paid royalties on the sale. Regarding the list below, this did not happen. Blueberry was given away entirely or in part without remuneration and the sales were hidden from Blueberry in the Arbortext Royalty Reports.

Bear in mind, the following list is only a partial list of Arbortext piracy. Due to an audit cover up by Mark Robinson of Plante Moran and a highly suspicious ruling by American Arbitration Association arbitrator Kathryn J. Humphrey of the Michigan law firm of Dykema Gossett, Blueberry was prevented from a full investigation of Arbortext’s fraudulent accounting system. Blueberry obtained this partial list from the working papers of Mark Robinson’s Plante Moran audit report, which were uncovered during Arbitration Discovery proceedings two years after his report was issued. He did not mention this piracy at all in his official audit report. Quite the opposite. He said everything was hunky-dory. See Chapter 36 and Chapter 45.

The licenses herein were extracted from the License Key Database – after Robinson allowed Arbortext to destroy and/or edit the original database, which he described on the phone to us as having “significant discrepancies,” and then allowed Arbortext to submit this altered database version to Robinson for his report.

Blueberry is convinced that there are many more licenses issued by Arbortext that were not reported. If this list is not considered by Robinson to contain “significant discrepancies,” what oh what did the original database contain! Only a full and complete investigation of Arbortext’s records will suffice to determine the extent of criminal behavior by this company.

Software Piracy and Accounting Fraud are crimes, and these crimes are delineated in great detail in the Rape of Blueberry on this site. It’s time for an official investigation of this company and the individuals who commit these crimes with impunity. Stockholders deserve to know what kind of company they are investing in and what kind of people are running that company.

The Piracy List 

The Rape of Blueberry (see Table Of Contents to the right) tells the story of Accounting Fraud, software royalty fraud, and Intellectual Property Theft by Arbortext, Incorporated in Ann Arbor, Michigan. It names the company owner (Jim Sterken) and the executives (Ray Schiavone, Dave Peralta, Jim Haggarty, Cherie Van Allen, and Joyce Svechota) who conspired with him to commit these white collar crimes – the CEO, CFO, CIO, Controller, and Director of Product Management. It tells how their crimes were covered up by a Plante Moran auditor (Mark Robinson), which faciliated an Acquisition by Parametric Technology, and eventually led to a highly suspicious decision by an American Arbitration Association arbitrator (Kathryn J. Humphrey).  All of these villains and entities are located in the Ann Arbor/Detroit area of Michigan.

This is a fascinating and highly entertaining story that will take you on a journey through the polluted justice system of America and make you laugh, make you cry, and make you shake your head in bewilderment and disgust.

If you prefer to read this story in its entirety, without negotiating through the various Chapter posts of the TOC, click HERE. Those of you who are not interested in the action packed, death defying, throat-clutching, heart-pounding narrative of this amazing story, and are only concerned with examining the evidence, you can read the following seven posts and the Gist of The Case should be clear and convincing. These are not nice people. Their greed, arrogance, and disregard of the law represent a microcosm of the corporate attitudes and policies that have currently brought such economic disaster to this country.

Chapter Eight: First Evidentiary Exhibits of Fraud
Chapter Ten: The Disappearance of $4,000,000
Chapter Thirty-One: The Extraordinary Fear of Audits
Chapter Thirty-Six: The Plante Moran Cover Up
Chapter Thirty-Eight: The Demand Letter To Arbortext
Chapter Forty-Five: The Smoking Gun
Arbortext Royalty Fraud: The Piracy List

Chapter Forty-Six

The Toad Ride Ends

The day before our Response to Parametric’s Motion was due, we received an email from Palizzi containing a document which he wanted us to sign in return for him allowing Mark Robinson to release to us the material in his files that had so far, in defiance of the Arbitrator’s orders, been withheld.

The document was a legal paper entitled “Stipulated Protective Order.”

Palizzi tried to foist this off as just some ordinary legal horseradish necessary so he could promptly release the suppressed evidence to us. The fact that he waited until the next to last day of our filing deadline to fling his foist was a bit comical. Apparently, he felt that we were so desperate to get this info that we would quickly sign the document and then spend the final day of our filing hastily rewriting our whole Response in light of the new evidence.

Which proved two things. One, he thought we were idiots. Two, he didn’t understand much about the case. Sitting on his desk under his nose was all the evidence of fraud that we had needed for our Response. Of course, he probably wasn’t paying a fly’s attention span to the facts of the case. All he had been hired to do was squash it – whatever the heck the whole thing was about.

His foist impressed Mary and I so much that, after some polite tittering, and a quick skim through, we tossed the paper into a corner. It was only after we had finished our filing, emailed it to Hannah Cook, and returned to our humble abode in the Rhinoceros Palace that we read it.

What a sneaky little boy you are, Mr. Palizzi. Carefully threaded throughout the Order was the all encompassing attempt to place every piece of evidence and all arbitration proceedings – past, present, and future – under a strict Confidential seal. Never to be spoken of or revealed to the public. Had we signed it, you would not now be reading about this case of Accounting Fraud and Audit Cover Up.

The old Smoke Filled Back Room ploy. Parametric sure didn’t want anybody to ever get wind of this case. Even though there was no case, according to them, and they were innocent as lambs. Not to the point they would welcome that the case be heard so they could be resoundingly exonerated, of course.

Judicial courts are indeed alien realms, hell bent on ticky-tacking over precisely worded ambiguities and loop hole options at the utter expense of obvious reality. Parametric knew it owed us money, acted like it owed us money, and was choosing to wiggle out of the debt on a technicality. The Arbitrator knew this from the second Palizzi adopted his dispositive strategy. And we knew it. If there were 600 people in the court room, all 600 would know it, too. Making the entire effort allowed by Humphrey nothing more than a ridiculous and woeful sham. For the sole purpose of allowing a billion dollar corporation to stiff two people out of their rightful earnings. Entertaining the thought of strictly and brutally enforcing one single part of one single clause in the Contract which immensely favored Parametric/Arbortext, while blissfully ignoring the multitude of other clauses in the Contract that Arbortext had systematically, ruthlessly, intentionally, and criminally violated for 84 consecutive months.

Nevertheless, we felt our evidence could not be ignored and the next three weeks crawled by with our hopes at an all time high. Finally, on April 4, 2007, Mary dialed in for the conference call with the Arbitrator which would wrap up the matter of Palizzi’s Motion. Ms. Humphrey had promised to give her ruling two days later.

The phone call lasted nearly three hours.

Mary emerged from the RV at long last, sat down next to me on the swing, and burst into tears.

I waited till she was done. In the past five years, I had gradually become adept at receiving bad news with numb impassivity. A far, far cry from the me that had once so long existed on the brink of raw emotional eruption.

“What happened?” I asked quietly.

“It was horrible. She practically ignored me.”

“What did Palizzi say?”

“He wasn’t there any more. It was someone else. A woman named Kristen Spano. A really snotty lady.”

“That’s weird.”

“She and Humphrey spent practically the whole time talking about Parametric’s side of the case and what was the proper way to rule according to FRCP regulations.”

“What the hell is FRCP?”

“The Federal Rules for Civil Procedures. They govern district and federal court proceedings. They don’t govern arbitration proceedings, though. They shouldn’t even be discussed. Kathryn Humphrey is going to rule against us. I just know it. She postponed giving a ruling now like she promised. She wants us to submit some more briefs.”

“Briefs about what?”

“How she should rule. Can you believe that. She’s asking both of us how she should rule. She also wondered out loud if either side would accept her ruling without appealing it. But the worst part was when I butted in at one point after she and Spanos had been talking for what seemed like forever. I started off with an apology for not being a lawyer. Before I could say what I wanted to say, Humphrey said ,‘That’s all right. We expected that.’”

“We? As in her and Spanos? Like they’d been talking to each other before the conference call?”

“You’re getting the picture. It popped out of her mouth really fast.”

So that’s how it was going to be. Five years and every dime in our lives and everything we owned to bring our case before an Arbitrator and the wretched little woman was going to refuse to hear it.

Yecchh.

Mary and I dutifully filed our briefs explaining to Kathryn J. Humphrey, Michigan Lawyer of the year 2006, what an Arbitrator’s job responsibilities were. Duh! We dial into a conference call to get her ruling and she says she doesn’t know what or how to rule. Baloney had now achieved mythical proportions in our lives.

See Exhibit AE and Exhibit AF for our responses to her. We did not mention in them that an Arbitrator was supposed to find an EQUITABLE solution, even if that required bending a few FRCP rules. She knew this was an Arbitration guideline item. Pointing it out might seem insulting, or worse, like we were begging. We preferred to leave the begging to Spanos and Parametric.

Then we waited. And waited. And waited. After three phone calls from Hannah Cook requesting the status of Humphrey’s final ruling, the first two of which were ignored or put off, fully three and a half months later, on July 13, 2007, Kathryn J. Humphrey dismissed our case. See Exhibit AG for her ruling. Have puke bowl handy.

She was required under Arbitration rules to deliver a ruling in 30 days or less. Apparently, it wasn’t enough entertainment for her to simply ruin us by sweeping under the rug the blatantly fraudulent actions of two corporations; she felt compelled to torture us also. And thumb her nose at the Arbitration Association’s toothless guidelines and administration.

Regarding the evidence of continuous and long running Fraud which we have painstakingly detailed, Kathryn J. Humphrey ruled that even though this evidence was discovered with her permission and approval, and occurred under her watch and in her “court room,” and was a critical component of the Audit that she referenced as the starting point of the clock she used to torpedo us, it was beyond her scope to consider any of it.

WHAT ARE YOU TALKING ABOUT, MS. HUMPHREY!!!!!!!!! What system of judicial Logic are you employing here? First you allow evidence to be introduced, then you say you can’t look at it. This isn’t an Arbitration Court or an FRCP Court. I believe the correct term is Kangaroo Court.

And oh, by the way, Ms. Humphrey concluded that the email that Arbortext had used as a pretext for all the various royalty calculations over the entire history of the contract was NOT VALID. Meaning Blueberry had not ever been paid properly. And since this was the first time this email issue had ever been officially questioned, it was “timely” and the interpretation of the contract could now be decided by an Arbitrator. That’s you, Kathryn. You can decide what we should have been paid for the past seven years. And most certainly for the past ONE year provided by the contract clause you are using to dismiss the entirety of our arbitration case. A year in which, by your ruling, Parametric has not paid Blueberry proper royalties.

I guess making fair and unbiased rulings is just “outside your scope” Kathryn. The only scope you seem to have developed in your life is protecting rich thieves from any sort of culpability.

July 13 had two “coincidental” items of significance. It turned the page on one more entire year of liability for Arbortext since the contract signing date had been July 12, 2000. And it also coincided with Mark Robinson’s departure from Plante Moran, either voluntarily relinquishing his partnership status – or perhaps involuntarily. I’m sure it’s just a coincidence. Right? After a career working for both KPMG and Plante Moran, Robinson now had his own consulting agency. Need some shady audits? He’s your man.

Ray Schiavone had oozed off sideways to become the CEO of Quark and had “quietly” brought along some former Arbortext personnel such as Jim Haggarty and P. G. Bartlett. I’d advise the public to take his company pronouncements with a large grain of salt.

Dave Peralta had moved his “independent auditor” dictionaries and fear of audits across town to NanoBio Corporation in Ann Arbor, where he was now Vice President, COO, and CFO. Nothing like presiding over some wholesale Fraud to provide career opportunities and advancement.

Jimmy “The Crook” Sterken continued his massive assault on malignant phoniness by becoming the Treasurer and Vice President of the Board of Directors of Habitat For Humanity of Huron Valley. He still maintained his title as VP of Engineering at Arbortext, but now had his hands firmly on another set of funds. Might want to keep your eye on the books, Habitat people. Don’t want any funds leaking out the back door into a BMW glove compartment.

The irony of Sterken’s new public image of concern for people’s habitats, while showing none for mine or Mary’s, was not lost upon us. Perhaps he had experienced a spiritual awakening. Even Remorse! Okay, nada on that last thought. Nada on both, actually, since he hadn’t yet bothered to pay us what he owed us and had let three corporations and quite a cast of co-conspirators pay the price of shame and infamy for helping to cover up his criminal behavior rather than rectify his wrong doing and accept responsibility for turning out to be such a louse . What a guy. Go Jimmy! You da man.

The American Arbitration Association. What a hoax. Kathryn J. Humphrey should never be allowed to disgrace this organization again. Get her off the Arbitrator list. Now.  And get some “guidelines” that an Arbitrator can’t simply ignore. And if someone doesn’t get to arbitrate their case, have the decency to refund their money.

And dear sweet Parametric, perhaps you really didn’t know how crooked Arbortext was, and in particular how crooked Jim Sterken was, when you acquired them. If so, I hope this story has enlightened you and motivates you to do the right thing and pay us what you owe us.

As for Mary and myself, we have a new life now – smaller, more humble than the one we had before. But gone are the lawyers, the courts, the corporations, the constant ugliness, and the endless assault on sanity and wallet. The wondrous road of life is once again open and safe to travel. And we still have our swing.

During our long battle with the forces of white collar crime, we received a lot of empathy – but usually with the telltale shake of the head that indicated we were crazy to fight City Hall. They would crush us. And they had. No doubt about it.

Neither one of us, however, regretted our choice. If one’s life wasn’t worth fighting for, then one’s life wasn’t worth much. And neither of us saw our lives as too worthless to bother defending, or too precious to risk the consequences.

“We gave them one heck of a fight, didn’t we?” Mary said, as we sat on the swing one night, feeling the anger and outrage ebb away into the mists of time.

“We certainly did, Ollie,” I said. “We certainly did indeed. And we beat them, too.”

“Get real. They walloped us.”

“They had to cheat, though. It’s not a victory if you cheat.”

“This wasn’t a football game, Steve. We lost our house and all of our money.”

“But we proved they were crooks. Nobody believed us at first. Now they do. All of them.”

“I wish they’d just paid us what they owed us. That’s all we ever asked.”

“What do you think all that spooky Saia stuff meant?”

“Exactly what it was. No more, no less.”

“Trust in my son Jesus?”

“That’s what the message was.”

“I guess we weren’t supposed to prosper and become philanthropists then.”

“I guess not.”

“Rats. I kinda liked that ending.”

“Maybe you’ll like the one that’s ahead even more.”

There are eight hundred million stories in the Naked Blog. This has been one of them.

THE END

(maybe)

Chapter Forty-Five
The Smoking Gun

As I previously mentioned, the Working Papers of Plante Moran’s Mark Robinson produced the Smoking Gun we had been looking oh so long and hard for. He had this evidence when he concluded his audit, but did not include it in his report. Worse, his conclusion found no significant problems with Arbortext’s accounting practices at all.

As I promised earlier in Chapter 36: The Plante Moran Cover Up, we will now revisit Robinson’s Audit Report in light of his Working Papers. While the initial entries may seem tame fudging, and even somewhat tedious, I include them here to demonstrate the all encompassing travesty of Robinson’s eventual “clean” conclusions, especially in conjunction with the final exhibit, Working Papers #19, which will completely explode the validity of his audit and demonstrate beyond any doubt the fraudulent accounting practices of Arbortext.

Working Papers #1:

This has only one page which says “WP-1 is the electronic version of the Sales Database.” Mark Robinson therefore has a computer file of the Sales Database. He omitted sending this file to us to examine. Pity. It would have been a possibly damning piece of evidence, since this database can be compared to the Royalty Report and the License Key database. I presume it is still somewhere in Plante Moran’s offices. Or should be.

Working Papers #2: (See Exhibit W)

This is a list of the Query statements used by Arbortext to extract Blueberry’s royalty related information from the Accounting System/Sales Database Invoices. The first page lists the SKU product numbers to include in the search. Robinson says in his report that:

“Plante & Moran reviewed the code (WP-2) associated with performing the extract and did not identify any errors. Plante & Moran also reviewed Arbortext’s complete Product SKU Listing (WP-3) to ensure all SKUs associated with software products that contain Blueberry software are incorporated in the code that is used in performing the extract.”

Perhaps Robinson “did not identify any errors,” but certainly there were problems that he left unmentioned. He mentioned uncertainty about whether the Email modified the contract, but did not report that the percentage based system Arbortext was using did not reflect either the contract OR the email. It was simply an Arbortext invention.

The second and third pages are divided into two sets of different programming “if…else” queries. The first set focuses on all invoices that have a date greater than 9-30-04 – the cutoff date of the Plante Moran audit. The second set will pick up all invoices prior to this date that the audit will actually be examining.

This audit period second set has several formulas based on the number of CPUs involved in the license sale, with the top end of the set being 20% for a 1 CPU sale and scaled downward to 14% with a 4 CPU sale. This is the percentage of the total sale that will be extracted to the Royalty Report, where it will then have Blueberry’s royalty percentage applied to it. This entire concoction has no basis in the Contract and was invented and first applied by Arbortext on the July 2002 Royalty Report which punished Blueberry for catching Arbortext cheating.

The post-audit set of formulas produces a top end royalty percentage of 16% and is scaled downward to 11%. Yet another reduction in Blueberry’s royalties unilaterally imposed by Arbortext with no input or acceptance by Blueberry and placed into action immediately beyond the scope of the Audit.

No comment was made by Mark Robinson about this double set of queries. He mentions that there could be a case made that Arbortext’s formulaic percentage based system has no justification in the Contract, but he does not mention that the system itself is still undergoing a downward adjustment solely at Arbortext’s whim, for their financial gain and Blueberry’s financial loss.

Working Papers #4: (See Exhibit X)

These are Consolidated Financial Statements from Arbortext’s auditor KPMG, covering the years 2000 – 2003.

They are curious. For what is there, and what isn’t.

The first report, issued February 28, 2001, covers the year 2000. The Table of Contents for this, and all of the reports, refers to six following pages. Only the first three are included. Pages 4, 5, and 6 are excluded. These pages cover Shareholder’s Equity and Comprehensive Income, Statements of Cash Flows, and Notes to Consolidated Financial Statements. It is unclear why these pages are missing.

The “Independent Auditor’s Report” page, which leads off the reports, all have the exact same boilerplate first three paragraphs. The first Report, however, has a fourth paragraph which reads thusly:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 12 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 12. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.”

This was the precarious financial condition of Arbortext prior to gaining the technology of Blueberry Software to translate MS Word, Framemaker, and Interleaf documents into its Epic Editor and E3 products, which proved so successful that Parametric Technology forked over $194,000,000 in cash five years later to acquire Arbortext.

The three boilerplate paragraphs are standard auditing disclaimers. The above paragraph is an opinion of the auditor. The reports for 2001, 2002, and 2003 do not have any opinion from the auditor. Only the three boilerplate paragraphs.

Why no comments/opinions from KPMG on these reports? Are the totals on these reports the same as the ones in KPMG’s own records? Did Robinson get these reports from Arbortext or straight from KPMG? He uses them as a cross reference verification in his audit.

There is, for instance, a one million dollar difference in the Cost of Revenues and Gross Profit figures listed for 2001 on the 2001 report and the 2001 figures listed on the 2002 report. How did these figures change? And what’s on the missing three pages from each report? What Notes are we not getting to examine?

I won’t mention that all the reports have little binder ticks on the left side of the pages, except for the December 31, 2002 and 2001 report pages, which have none. To draw attention to this curiosity might seem like I was having a false, paranoid projection.

Oh well. We’ll find out more when we proceed to Discovery in Arbitration and get to subpoena the actual records of KPMG. Right? Surely we will. Won’t we?

Working Papers #5: (See Exhibit Y)

This section was a print out of, I guess, Total Revenue covering the period Q1 2000 through Q3 2004. The period examined by the Audit. I mention guessing, because there is no Header on any of these pages identifying what exactly they are. It appears they are from a spreadsheet, and not a report blurted forth from the Accounting System, with Company Name and Logo, Headers, Footers, dates, and all that mundane official report type stuff. Apparently, after twenty some years in business, nobody in the accounting department had thought to put together an official Total Revenue report. I wonder if Robinson thought that this was a bit funky, to say the least.

At any rate, the report was, to be quite blunt, a phony doctored submission given to Plante Moran by Arbortext. Not only the suspicious non-professionalism mentioned above, but it also contains clearly edited and inserted entries. Robinson even referred to these edits and insertions: “Plante & Moran verified certain write-offs against the bad debt reserve (WP-5 and WP-6) that resulted in the reduction of royalties that were paid in earlier periods.” Isn’t a Revenue print out a strange place to verify bad debt reserve write-offs? Isn’t that a General Ledger type of deal?

The dollar amounts involved here aren’t hugely significant. Which makes the tortured effort of deceit even more pathetic. Arbortext needed these Revenue amounts, vis a vis Blueberry, to match up with the Cumulative Royalty Report and give it validity. In other words, Arbortext’s whole effort with its audit submissions begins with the Royalty Report and works upward to the Accounting system, not vice versa as would be the norm. Given the year long head start that Peralta and Blair’s delaying tactics had given Arbortext to prepare for this audit, to still produce such an amateurish sham speaks volumes about the scarcity of intellect roaming the hallways in this company.

To begin with, these are Revenue reports, not General Ledger or Profit and Loss Statements. There should be no entries here other than Revenue. Yet on many of the pages, down near the bottom, there are accounting entries such as “check – $60, Inv# 18006 -Raymark Xpert” (page 3, Q3 2000 report). This type of entry is a General Ledger type of entry and is out of place in a Revenue report. It’s a manually inserted comment.

Another type of non-revenue report insertion is the frequent notation at the bottom of the License Revenue list “Write-off’s Against Bad Debt Reserve,” which Robinson referred to above as a verification technique. This notation is indented at the same level as the licenses listed in the License Revenue portion, but occurs beneath the non-indented sections titled “Revenue-Maintenance” and “Revenue Professional Services.” Out of place in location and by existence on a revenue report. Each one of these entries achieves a reduction in royalties owed to Blueberry, making the Revenue Report totals match the actual royalties paid on the Royalty Report. Sort of.

Another concoction is fairly laughable and occurs on the Q3 2000 page. All of the licenses listed on these pages are the exact line item descriptions from the SKU numbers in their accounting system (and Robinson’s WP-3). Except for ONE: “Publishing Site License, exluding [sic] interchange”. There is no such SKU line item description anywhere in their accounting system. IT’S A PHONY. It was even mistyped when it was phonied up! It’s sole purpose is to proclaim loudly: We don’t owe Blueberry any money for this $453,643.00 site license figure.

Q1 2003 has one of the entries “Write-offs’s Against Bad Debt Reserve.” It deducts $8,400 from the total Interchange sales that the License Revenue report spit out. Once again, presumably to match the Royalty Report itself. Except that it doesn’t. The Royalty Report lists $104,585.36 in applicable Interchange royalties for this period. The License Revenue Report lists $102,777.13. After the Write-off, the Revenue Report lists $94,377.13. This represents a $10,208.23 discrepancy between the Revenue Report and the Royalty Report.

Additionally, this page has an entry at the very bottom “ATI paid minimum – $7,500.” This isn’t even a General Ledger type entry. More like just a sticky back note, supposedly generated by the Revenue print out. And for what purpose?

Q3 2003 has an entry “Reseller Commission due on Sale” which deducts $9,000 from the total Interchange revenue. Even with this bogus entry, the total on the License Revenue report is $184,955.10, while the total on the Royalty Report is $151,740.29. Since the Royalty Report already HAS the $9,000 Reseller Commission deducted from its total, this entry is a double dip and these two reports are $33,214.81 different – and not in Blueberry’s favor.

Mr. Robinson’s comment? No problemo. ZZZZZZzzzzzzzzzzzzzz.

These revenue reports clearly indicate that Robinson did not generate them himself. He merely examined, somewhat, the information Arbortext gave him to examine. Or perhaps just stuck the stuff in his binder without a glance. That is not performing an audit and it certainly is not performing any forensic work. Twelve of the nineteen pages here have been visibly doctored.

Enough on the WP-4 Revenue print outs. The only thing they prove is that Arbortext has submitted false documents to a licensed CPA and Certified Fraud Examiner conducting an “independent” audit. Since these reports are VISUALLY suspect, without even getting out the calculator, that Robinson failed to raise a red flag, or any kind of note at all, is not particularly due diligence in the performance of an audit.

Working Papers #10: (See Exhibit Z)

Let’s revisit Corporate Controller Karen Sharplin’s email about the Intermarket product at this point. Her email to Robinson said, “Epic Intermarket was a new product that was to be developed some years ago, however it never was developed. There have never been any sales of this product.”

After this email, Mary faxed Robinson our Intermarket evidence (Zoltan Gombosi’s resume and several web page print outs describing Intermarket and announcing its release) and concluded by saying, “I do not know if this additional information [our Intermarket evidence we sent to him] will aid you in locating ‘Epic Intermarket’ sales. Since Arbortext, through Karen Sharplin, has stated that they never even completed development of the product, we would at least like the record to show that this most certainly appears to be false.”

We heard nothing more from Robinson except his two MRO explanations in his Audit report. He did not mention in that report that Sharplin had lied about Intermarket.

In his audit report conclusions, Robinson stated “it is unclear as to what software components are contained in E-Catalog or are part of a Site License” and he had further information about MRO, but deferred to Arbortext as to whether he could release it. This left the impression that this information would further support his conclusion.

However, the further information turned out to be the MRO / Arbortext Contract and it completely refuted his conclusion and Sharplin’s email and thus the Audit’s entire “explanation” about E-Catalog/Intermarket. The first paragraph of this contract states (emphasis added):

Whereas, ATI has designed and developed and licenses its proprietary EPIC and eCatalog computer software programs (the “ATI Programs”) which are further defined in Section 1.5 below, and is experienced in the design and development of customized software. MRO wishes to license the ATI Programs from ATI for incorporation into an MRO-branded content management product (“MRO.com Content Manager”);

Doesn’t get any clearer than that, Mr. Robinson. E-Catalog, very first sentence, very first paragraph, designed, developed, and licensed. Appendix D, page 18 of your Audit Report, payments made for E-Catalog License ($100,000 in 2001) and payments made for Site License for this E-Catalog License. Why do you attempt to deny this in your Audit Conclusion?

These are Arbortext products SOLD to MRO and PAID for by MRO and the nature of the two companies’ relationship and its abandonment is irrelevant.

Working Papers #19: (See Exhibit AA)

The Smokingest Barrel Melting Gun of All.

An indictment of both Arbortext and the Plante Moran Audit.

These pages represent a print out of the License Key database. AFTER it was cleaned up and fixed by Arbortext. The original database print out, the one Robinson said on the phone to Mary had “significant” discrepancies with the Royalty Report, is missing from the Working Papers. Either it was destroyed by Robinson or he purposefully did not include it.

The single most important piece of evidentiary proof of Arbortext Fraud and the vindication of our reasons for hiring Robinson to perform the Royalty Compliance Audit was shredded or withheld.

Yet even this fixed up and altered print out of that database proved that Arbortext was cheating us and that Robinson lied about it on his report.

Robinson says in his report (emphasis added):

We verified that the Active Licenses identified in the ‘Key Database’ (WP-19) had revenue associated with them in the Total Arbortext Sales Database (WP-1). We also verified the number of Active Licenses with the number of licenses reported in the Cumulative Royalty Report sent to Blueberry, Exhibit A.

(See Exhibit AB for the actual Royalty Report referenced above and throughout these pages.)

So, Robinson compared licenses in the Key database to the Sales database – pronouncing them as pretty close to matching, but did not compare the licenses in either database to the Royalty report – the subject of the entire audit! He only compared the NUMBER of licenses.

Perhaps because six of the first ten customer licenses listed in the Key Database, that Robinson “verified” had revenue associated with them in the Sales Database, are not on the Royalty Report!

Hard to miss that, Mark. And if you “verified” that these licenses had revenue associated with them in the Sales Database, then it’s clear Arbortext stiffed Blueberry for payment of royalties on them.

And this was the “cleaned up” version of the Key Database. Which is still a phony and is readily identifiable as such by simply looking at it. The first 211 licenses are visually doctored entries. The dates are all December 31, 1999 and in a different column and a different font size than the entire rest of the license key list. Blueberry didn’t sign a contract with Arbortext until July 12, 2000 and the product descriptions in these 1999 licenses contain products that weren’t released by Arbortext until 2002 and 2003!

What was Arbortext hiding/obscuring/manufacturing here? Surely doesn’t seem to justify Robinson’s remark that “the current key distribution system is linked with the current product sales and is automated versus manual and is less prone to errors.”

A further damning revelation of this cleaned up Key Database and Mark Robinson’s report concerns the U.S. Coast Guard. The following is what Robinson said about this customer in his audit and the remarks I made about it (Chapter 36: The Plante Moran Cover Up).

• U.S. Coast Guard – A solicitation notice from the U.S. Coast Guard requests maintenance on 2 E3 single processor licenses and 2 E3 quad processor licenses (WP-18). Our review of the Key Database and the Total Arbortext Sales Database both agree that only one E3 single processor license and 1 E3 quad processor license were ever sold to the U.S. Coast Guard. This finding agrees with the Cumulative Royalty Report as well.

[

In other words Mark, the solicitation notice from the Coast Guard (which we sent to you) requests maintenance on 4 E3 licenses, yet only 2 are in the Sales Database, the Key Database, and the Royalty Report. Thanks for glossing over this point that Blueberry did not receive royalties on HALF of the Coast Guard sales. In fact, these sales seem to be missing from Arbortext’s records entirely, just like the $4,000,000 in Intermarket sales. You don’t seem to be mentioning that this is a PROBLEM.

]

The cleaned up WP-19 License Key Database now contains ZERO Coast Guard licenses!

They have disappeared. I’m sure the Coast Guard will be quite unhappy to learn that they no longer have valid licenses for any of the products they purchased. In fact, the above statement by Robinson in his Audit Report is a flat out lie. His review of the Key Database and the Total Arbortext Sales Database DO NOT agree with the Cumulative Royalty Report.

Perhaps Robinson’s statement above was made from viewing the Key Database before it was cleaned up, not afterward. And if there were 2 Coast Guard licenses in the original Key Database and 2 in the Sales Database, then the new Key Database no longer matches the Sales Database, either. There is thus no agreement amongst any of the three critical databases.

Making Mark Robinson’s Plante Moran Audit and its findings a total hoax and a fraud.

So, if we have a shadow database for Licenses and another one for Royalties and likely a third one for Sales (since E-Catalog has never been found in there), then the phoniness of these three databases makes the Revenue printouts, which were keyed to match the Royalty Reports, also completely phony. It also makes the financial statements of KPMG phony because the Cost of Goods/Services, where Blueberry payments would be recorded, is not accurate. Which makes five years of Arbortext tax returns reported to the IRS false, and the information provided to the SEC during the Acquisition false.

Virtually all of the information provided by Arbortext in Robinson’s Audit Working Papers was a fabrication, a partial-truth, an admission of guilt, or an outright forgery. Since the veracity of all of it depends ultimately and entirely on the veracity of the Royalty Report, and that report is demonstrably false, I rest my case of deliberate Fraud by Plante Moran and Arbortext.

How bad was this Fraud and its Cover Up? See for yourself by downloading the following Excel spreadsheet. This Excel file contains a merger of the License Key database entries and the Royalty Report entries. In Black letters are the Royalty entries; in Red are the License Key entries. Not to spoil the drama, but there are 761 discrepancies between the two databases! How many more existed before Arbortext “fixed” things up and made their system “less prone to errors”? The discrepancies involve both sales that were reported to Blueberry, but have no license in the Key Database, and licenses in the Key database that have no corresponding sale in the Royalty Report. These two databases simply DO NOT EVEN REMOTELY MATCH.

If any of you have remained skeptical of the accusations I have made throughout this saga concerning Arbortext and Plante Moran, this file presents Clear and Convincing Proof of the truth of my claims. You don’t need to be a CPA to easily see the breadth and scope of this cheating.

You can still, however, entertain the opinion that I have been a little too forceful in my choice of adjectives, adverbs, and metaphors while describing this sordid tale. That’s fair. In my defense, though, I’ve been a little ticked off by this whole long running nightmare and the devastation it has caused to me, to Mary, and to our family.

Click Exhibit AC to view or download this Excel file and draw your own conclusions.

After examining this file, if you live in Michigan, call your Representative and demand an investigation. Oh, wait. That won’t be necessary. We have Kathryn J. Humphrey, Michigan Super Lawyer of the Year 2006, from the prestigious judge-providing law firm of Dykema Gossett, sitting right here in the Arbitrator’s chair. She’ll get to the bottom of this skullduggery. Surely she will. Won’t she?

Note:

See Exhibit AD for Blueberry’s Response to Parametric’s Motion To Dismiss. We made a little boo-boo on the first page, inadvertently accusing Palizzi of Fraudulent Concealment himself, which he dutifully scolded us for. Oops. Hey, we’re not lawyers, old boy, we’re just prey. Slack off and chill.

To be continued . . .

Chapter Forty-Four

The Blohungusinebriatrocity Factor

Mary and I now had two weeks to write the most important document we had ever attempted to write – legally speaking.

We were aided somewhat by two events. One which occurred while we awaited Palizzi’s Motion To Dismiss, and one which occurred as we began to write our response.

The first event involved money. More precisely, the lack of it. What’s new?

While we were in the midst of ignoring thinking about not having enough of it to finish the Arbitration case, Mary looked up from her computer one morning and said, “I just got an email from somebody who wants to buy our Domain Name.”

“Which one?” I asked.

We had two. Blueberrysoftware.com, which we had purchased following Dwan’s theft of the Blueberry.com name which was located at our Blueberry web site. You may recall from the Beigel vs Dwan trial, that a value of $20,000 was placed on the Blueberry.com domain name and I had been ordered to pay Dwan $10,000 for his share of that value as the name then became owned entirely by me. Blueberry now had both domain names parked on each other at our one web site.

“Blueberry.com. They are offering $40,000. I did some research a while ago and a company that appraises the value of domain names said blueberry.com was worth between $79,500 and $94,000. Amazing, huh?”

“You’re kidding. Is it a serious offer?”

“Sure looks that way. It’s from an Ashley Saddul at ImpressiveDomains.com.”

“Jeez. We’ve had blueberry.com for a long, long time. It goes way back to the early nineties – maybe even the late eighties. That’s how people have been reaching us for years.”

“They reach us through our web site mostly. That’s all blueberrysoftware.com now. I don’t think losing the other one will hurt us.”

“I suppose it’s a moot point,” I said. “We sure need that money. Even if it’s worth twice that much down the road.”

“It’s an answered prayer. I’m going to call her and accept it.”

I knew what Mary’s prayers were like. They were direct to Jesus. Please help us, if that is Your will for us. Mine? I was never sure if it could be called praying when I wandered around inside my own skull screaming, “What are we gonna do? We’re dying here. Five years down the drain because we can’t pay the Arbitrator. Somewhere, somehow, something’s got to happen or we’re dead. Aaaarrrrggghhh!!!”

Mary whirl-winded into the phone and after a few days of haggling, posturing, doing the Jump Up/Jump Down tango, and running some careful bluffs, she got Ms. Saddul to bump the offer up to $44,000. Which covered her commission and left us with the original offer of $40,000. It seemed so much bigger than $36,000. And I guess an extra four grand to two broke bums was indeed a lot bigger.

Answered prayer, indeed. We’re alive!

Not only alive, but a bit beyond that. Enough so to look around at our meager and depressing dwelling accommodations in the RV and make a fairly quick decision to temporarily move ourselves and all our files and equipment to a far more spacious room at a nearby Best Western Heritage Inn, where we could concentrate on the task at hand of replying to Palizzi’s Motion.

The room was quite spacious – compared to our RV. About three times more so. It felt like we’d moved into a palace. It even had a full sized tub with Jacuzzi jets. Heavenly! There were two queen size beds and we used one of them to spread out all our papers and evidence. There was a Starbucks down the street, but the complimentary coffee was pretty good, too. And free. Along with the ample breakfast buffet and equally ample evening buffet. What a joint!

We signed up for the weekly rate and settled in for two weeks of some serious fake lawyering.

Our first action was to send Palizzi’s Motion to Claudia Rast for her opinion. Then we spent a couple of days freaking out. The only thing we knew regarding this one year liability limitation in the contract was what every lawyer we’d talked to had said: it’s an on going fraud, not a one time contract dispute. A crime. But how the heck do we write about this in a legal fashion? What was the appropriate mumbo jumbo needed for the pompous zoo of wherefores and prithees. On Going wasn’t mentioned much anywhere on the web as a legal term. It sounded too much like ordinary English. Not enough blohungusinebriatrocity.

Then came event number two. Claudia provided not only the proper legal terms, but some court cases to cite in support of them. The terms were Fraudulent Concealment and Fraudulent Misrepresentation. Talk about relief! These two terms perfectly described the entire history of the contract between Arbortext and Blueberry. To a TEE. Since Fraud was involved, and it had just now been provably discovered in Arbitration, the statute of limitations in the contract would be, as the lawyers say, tolled.

The first Fraudulent Concealment occurred during and after the contract signing itself when the product Intermarket/E-Catalog was being concurrently developed by Zoltan Gombosi and his team of eleven programmers. This product, which included our technology, was not listed on Appendix B of the Blueberry/Arbortext contract, though Arbortext knew full well that it was a qualifying Arbortext Covered Product. In addition, none of its sales (nearly $4,000,000 according to Gombosi’s Resume) were ever reported to Blueberry, or its existence even admitted – indeed its existence, despite overwhelming evidence to the contrary, was and is still denied. Concealed. During the history of the contract, Arbortext had made the concealment of qualifying royalty sales practically an evil art form. We had caught them at some of the concealed sales, but there were still many more occurring with each and every royalty report.

If you have any doubts about Intermarket’s existence, click here. Use the PgDn key to quickly go to Page 21. The remaining fourteen pages are all about Intermarket, including screenshots of a functioning software product – a fully developed product. Wherever you see the words Framemaker, MS Word, and Interleaf – that refers to Blueberry’s conversion technology. The question remains to this day: what happened to the $4,000,000 this product generated? During its never developed and never sold and never reported existence. Isn’t anyone but Blueberry concerned about this missing money? Is four million dollars some sort of slop error factor these days? Chump change. The financials are accurate plus or minus four million, give or take, around that much, sort of close. Is there a new CPA system in the country with elephantine elastic bottom line figures?

The first Fraudulent Misrepresentation occurred in September of 2000 – two months after the contract had been signed. This Misrepresentation was made by none other than Jim “Paddle Ball” Sterken. Who else? The Mastermind of the Fraud performing his duty of deception and thievery.

I have not devoted any previous verbiage to this event for fear of muddling up the narrative of an already seriously muddled story. This event, however, stalked the entire history of the Blueberry/Arbortext contract. And its time on the stage has now arrived.

Sterken attempted, via a phone call and subsequent email to Kevin Dwan, to rewrite the contract, more favorably to Arbortext than it already was, scarcely two months after the initial signing. Kevin Dwan, utterly asleep at the wheel, but also completely duped by Sterken’s statements, agreed via email to this new royalty accounting proposal. See our Exhibit S (the Plante Moran Audit), “Appendix C”. I’ll quote the relevant portions here:

 Rather than configure the Interchange capability (which makes use of your Blueberry technology) as a $10,000 optional module of E3 (Epic E-Content Engine), our new plan is to bundle it into E3 by default and allow customers to delete it if they don’t want the capability.

In the new configuration, E3 will sell for $50,000. If the customer chooses to delete the Interchange capability, then we will charge them $40,000.

So, for each E3 that the customer chooses not to delete the Interchange capability, we will credit you with a $10,000 Interchange sale and pay you a royalty against the $10,000 . . .

 This email achieved an 80% reduction in Blueberry royalties since Blueberry, per the original contract, was slated to be paid a percentage of the entire E3 product we were incorporated into ($50,000), as opposed to a percentage of one-fifth of the entire sale ($10,000). Essentially a percentage of our own technology, not a percentage of the Arbortext incorporated product.

There is a Fraudulent Misrepresentation problem with this email that helps explain why Dwan would agree to this ridiculous 80% lessening of royalties. Sterken lies to Kevin Dwan about the E3 product and its configuration vis a vis Interchange. He claims that Interchange is a $10,000 optional module of E3 that they will now “bundle it into E3 by default.”  Yes, it’s listed as an option – but no price for it is ever listed. Yet up to the point of this phone call with Dwan, all E3 sales have Interchange already bundled into them. In fact, no line item on any Invoice has yet broken out the three components of E3 (Web, Print, Interchange). That comes later as Arbortext invents and evolves its Invoicing schemes in ways to limit Blueberry’s royalties, and all based on this email.

It is this email that they begin to use in lieu of the contract language as a percentage based system of Interchange value rather than Interchange incorporation to reduce Blueberry’s royalties. It is evident from Dwan’s acceptance of this email that he had been duped by Sterken into believing E3 customers had to request the Interchange module be included in their purchase and that most customers did not make this request, and it would be to Blueberry’s benefit that each customer have to request OUT and not IN, which would be taking advantage of the customer’s carelessness or ignorance or laziness. Not only was this false, in that all E3 sales contained this module, but this request was not possible either, since as we have seen earlier from Arbortext’s Internal Price Guide, Interchange was never to be mentioned as an option to either customers or resellers. Impossible to opt in or out when you are unaware of that an option exists.

My own view of why Sterken felt this slight of hand was necessary is that the Intermarket product’s great initial success in pre-sales, combined with the failure of Bob Brueck, at the contract signing, to get Dwan and me to agree to be purchased for $400,000 left Arbortext in a quandary.

I don’t believe Sterken ever thought the contract would be significant or that he would have to pay any royalties to Blueberry because he thought Dwan and I would accept being purchased. After all, Dwan already had accepted the offer before we even signed the contract. But when I did not go for the buy out offer, the contract suddenly had lucrative value to Blueberry. Not only would Arbortext be forced to pay large sums of royalties to Blueberry, but these sums would also provide all the funds needed for Blueberry to proceed to further develop its own product by adding XML and PDF import/export capability and in a very short time be capable of directly competing with Arbortext’s Interchange product, both products essentially consisting of Blueberry’s technology. Since Blueberry sold its product for $189 and Arbortext sold the more limited Epic Editor Interchange product for $1,200 (or the exact same capability on the E3 server edition for $50,000), Sterken’s concerns were real that we would end up snaring some of the very market he hoped to exploit. A healthy Blueberry was anathema to Sterken.

I was not privy to the phone conversation between Sterken and Dwan and merely cced on Dwan’s affirmative response. It wasn’t until Mary took over Dwan’s former duties and began unearthing Arbortext’s fraudulent activities that this email’s impact, and its misinformation, became apparent to me.

And this email vividly demonstrates yet again that Arbortext would not adhere to a contract whenever and however they choose to ignore it. Because they did not adhere to the email agreement either!

As can be seen in Exhibit B, Arbortext began by reporting zero royalty sales to Blueberry, then (after a Blueberry complaint from Dwan) changed that to a portion of royalty sales, and later, after a Blueberry complaint from Mary in 2002, changed the changed portion to report an even greater proportion of sales. The sales that were reported during this fraudulent behavior seemed to adhere to the email in that Blueberry was credited on some E3 sales with $10,000, as was promised in the email.

In the July 2002 report, however, when Arbortext decided to punish Blueberry for discovering that they were cheaters and forcing Sterken to admit it (see Exhibit D), the $10,000 guarantee from the email was mostly erased from their royalty reports – for the entire past and future. See Exhibit C. Replaced by an entirely new tortured concept of percentages, concocted from the email’s actual values, that now included applying discounts to Blueberry’s already 80% reduced royalties. For this new system of reporting, Arbortext didn’t even bother with the sham of contracts and email agreements – they simply imposed it.

There was a legal problem, however, with this email. The clear language in the original contract mandated that any amendments to the contract had to be made in writing, with signatures from both parties. No such signatures were ever obtained from Blueberry or provided by Arbortext. Thus, legally speaking, the email agreement was invalid. So was the new system set up unilaterally by Arbortext in July 2002. The only valid contract was the one Blueberry and Arbortext had jointly signed in July of 2000. Which had never once in seven years of royalty reports been adhered to.

So, from the very beginning of the contract, we have Arbortext employing Fraudulent Concealment and Fraudulent Misrepresentation. These two illegalities permeated the entire history of the Blueberry/Arbortext relationship. Indeed, Palizzi’s Response to our Response to his Motion To Dismiss would still repeat the denial that the Intermarket product had ever been developed or sold. A claim that was blatantly, criminally, false.

But the Fraudulent Concealment and Misrepresentation reached epic new heights during the Plante Moran audit, as Mary and I discovered while examining Mark Robinson’s Working Papers. Which we will discuss in my next installment The Smoking Gun.

It was now up to us to write our response to Parametric’s Motion To Dismiss, using these two legal concepts as a basis for denying the motion.

Before we started, we walked down the street to a Starbucks for a cup of coffee. All great and terrifying enterprises should begin with a reasonably good cup of coffee. As we sat by the window sipping and pumping each other up for the task at hand, Mary looked out the window and her mouth fell open.

“Look,” she said, pointing.

I looked. Outside in the parking lot of a Carl’s hamburger stand was a big rig semi. Printed on the back of this truck was one word: SAIA.

To be continued . . .

Chapter Forty-Three

The Sprinkling Inkling of Stinky Winky

Mark Robinson mailed us his Working Papers.  Part of them, that is. After some delays caused by Palizzi dragging his feet over what Robinson could send us.

Palizzi presumed himself into the Arbitrator’s chair and decided that Robinson couldn’t send any privileged communications with Arbortext that were in his possession. Not without Palizzi going over them to decide if they could or could not be released. Sort of like a criminal’s attorney getting to decide what evidence against his client the prosecutor could look at.

Robinson dutifully followed these “orders.”

Mary and I briefly considered ratting on Palizzi to Humphrey, but decided it wasn’t worth the effort. Our experience with Judge Jensen had taught us that judges didn’t like being reminded of their orders and asked to please enforce them. It sometimes made them feel like adversely changing their orders out of spite.

It wasn’t really necessary, either. What Robinson did send contained the Smoking Gun Mary was hoping would be there. Not one Gun, but several. I won’t interrupt the action packed, death defying, throat clutching narrative at this point to pore over this evidence, however. It will all be discussed a bit later when we sit down to compose our response to Palizzi’s Motion To Dismiss.

In the meantime, inkles began to lightly sprinkle down upon us that indicated the barometer was falling and fair weather might not be tomorrow’s forecast.

The conference call with Humphrey occurred on February 6^th, 2007. A Tuesday. On the following Monday, February 12^th, we received an email from Hannah Cook which passed along to us a PDF letter from Humphrey which summarized the phone call. See Exhibit U.

The letter also informed us that we could amend our original filing claim if we wanted to. Apparently this was to make sure we got the same privilege as she had given Palizzi when he amended his own filing during the conference call. Getting the old fair and square deal. Due to Palizzi’s delays, however, we had not yet received Robinson’s Working Papers, so there was nothing new that we could add to our claim.

And there was a problem with the dates.

Humphrey’s letter was dated February 7^th. Which meant it was written by Humphrey, but not sent for five days. Or Hannah Cook didn’t pass it along to us for five days. A mystery that would be no big deal were it not for the fact that we were given only until Tuesday February 13^th to file this amended claim – the very next day. Giving us only five business days to make this filing was as fast as I had ever seen the court system work, but having only one day to effectively do it was beyond speedy and off into the realm of stinky winky.

Mary pointed out this sleight-of-hand to me and we sat down to ruefully examine our paranoia about whether we were dealing with a marked deck of cards or was this just the standard ineptitude that one could expect of the document processing sectors of American life.

“What difference does it make?” I asked. “You don’t have to list your whole case in your filing anyway. Didn’t you reserve the right to amend your complaint along the way depending on what we discovered?”

“I said it on the phone to Humphrey. She said she understood.”

“So this is just a formality type thing.”

“I’m not so sure. I didn’t have the heart to tell you some of the things I’ve learned about Humphrey.”

“Oh great. It can’t be good then.”

“I read an article she wrote advising companies of the difficulty in getting Summary Judgments in Arbitration to hold up on appeal. She advised that businesses put it directly into their contracts that both parties allow the arbitrator to wield this sort of power. It’s a very aggressive pro-business stance.”

“Not vendor friendly.”

“And here she is, contemplating doing the very thing she says normally would likely get overturned on appeal. Of course, it takes money to file appeals and attorney knowledge to argue them. In her own attorney life at Dykema Gossett, she’s had great success in reducing or eliminating huge liability claims against big corporate clients. Let me read you a short blurb on her work.

Mary did some Google magic and read:

 She has successfully defended product liability claims concerning chemicals, natural gas, automobiles, trucks, general aviation aircraft, airline, executive jet and cargo aircraft, paper-making machinery and materials handling equipment.”

 Mary looked at me. “Pretty pro-corporate girl. Not consumer or environment friendly. And let me show you the article I just told you about. It’s called “Eight Tips For Drafting Better Arbitration Clauses.”

Mary Googled forward again and showed me the article. It is contained at the following link:

http://www.lorman.com/newsletters/article.php?article_id=268&newsletter_id=55&category_id=8&topic=LIT

I will quote here section number two of her article:

2. How should dispositive legal questions be resolved? The arbitrators could be authorized to determine the equivalent of motions for summary judgment, but the award could be overturned because of the failure of the arbitrators to hear evidence that otherwise would be relevant to the claim or defense. If you believe that the ability to bring a dispositive motion would be useful, despite this risk, include in your arbitration agreement a sentence indicating that, for example, “the arbitrators may hear and determine any preliminary issue of law asserted by a party as dispositive, to the same extent that a court could hear and determine a motion for summary disposition.”

“Shit,” I said. “The fix is in. Remember I said the only ringer left would be the Arbitrator?”

“Don’t remind me. I hate it when your pessimistic ideas come true. I’m not giving up on her just yet. She’s an Arbitrator now, not an advocate for big business. She knows the difference between federal court rules and arbitration rules. I’m praying she’ll just be fair. That’s all I ask.”

Fair. What a laugh. There was no such thing as “fair” in the legal dictionary. Fair was for the world of sports. And marriage. Playgrounds. Normal life. Probably Heaven. De minimus in the hallowed halls of justice. More like hollowed halls.

In the past seven years, we had seen Fair take a hellava beating. My ex-partner Dwan had started the slaughter seven years ago this very month. An eternity ago. Along the way we had seen our Blueberry business virtually destroyed, we had lost our home and were living in an RV, and all because we had resolutely and continuously insisted on Fair Play. Fair Play from Dwan – nada. Fair Play from Dick Blair – nada. Fair Play from Jim Sterken – nada. Fair Play from Dave Peralta – nada. Fair Play from Mark Robinson and Plante Moran – nada. And now, at the cost of everything we owned in life, one last attempt at Fair Play from Kathryn J. Humphrey. And right off the bat another NADA looming in our faces.

I looked across the room at Mary, who was back on the computer doing her dogged research. Man, what a trooper! She had been whipping the scoundrels at Arbortext and the scoundrels of Dwan/Bernheim/Blair for FIVE years now. Almost single handedly. And the more she whipped them, the dirtier they had to play to beat her. And they were probably going to beat her again. Because they could. They owned the casino and the dice were loaded, the table rigged, and the cards marked.

Well, old trooper girl, let’s just whip them again anyway. One last time. Because we can.

Palizzi duly filed his Motion to Dismiss (see Exhibit V). It was seven pages long and made no real effort to dispute Blueberry’s claims of Arbortext wrong doing. Its sole focus was that whether Blueberry had been cheated for seven years or not didn’t matter, because Blueberry had waited too long to bring the dispute to Arbitration. The twelve month statute of limitations in the contract had expired on any and all of our complaints and our case was no longer arbitrable. In addition, Parametric requested reimbursement of costs and fees incurred in responding to our claims.

Pikers.

Waited too long. What a laugh. It wasn’t waiting, Palizzi, it was being prevented from. By an endless procession of dirty tricks, lies, denials, and cover ups. In fact, both Paul Cimino and Palizzi pointed to Robinson’s Plante Moran audit as a key component of repudiating Blueberry’s claims. The audit that was an out and out Cover Up. One more Fraud in an ongoing stream of them.

Before we made our response to Palizzi’s Motion, we needed to pay the Arbitration Association another $4,600. We had paid them $6,000 back in September of 2006 for the Initial Administation Fee. Now we had to come up with another $2,500 for a Case Service Fee, plus $2,100 for our portion of the Neutral Compensation Deposit – the Arbitrator’s fee covering 15 hours of Study.

Arbitration was touted to be less expensive than filing a law suit and going to Court, but initially that was entirely a false tout. It cost less than $500 to file a law suit. Sometimes, that’s all it took to grease the Settlement gears. That had, in fact, occurred for us in our Copyright Infringement suit against Corel, which I did not include here in this particular Rape of Blueberry tale. As I mentioned earlier, one rape at a time.

So, at least initially, this less expensive toutedness was out-and-out bullshit. It was costing us $10,600 just to start the Arbitration case!

Mary and I had come to the conclusion that any contracts we signed with companies in the future would not under any circumstances contain the innocuous Binding Arbitration feature. What a rip-off! Got a complaint about the contract? No problemo. Cough up a mere $10,000 and you can get it discussed. All contractual complaints with a value of less than $10,000 are more cost effective to just eat it with spoons. Nice little buffer for cheating companies like Arbortext to work with.

At any rate, $4,600 due and payable. Our bank balance indicated we were about $4,252.39 shy. Roughly speaking.

To get this far, we had already borrowed money from virtually every known member of either of our Family Trees, even an ex-member of the Tree. We had paid them all back, true, but asking to borrow yet again was not exactly thrilling the hell out of either Mary or me.

Humble Pie was growing quite stale as a constant menu item in our lives. From whence would come the next stale slice?

To be continued . . .

Chapter Forty-Two

The Extraordinary Fear of Arbitration

I went outside when Mary got on the phone for the Arbitration conference call. I didn’t want to screw her up with some goofball facial or bodily reactions.

Besides, the phone call would go faster if I wasn’t listening in. It was like grass. If you watched it grow, it wouldn’t. Or your favorite football team. If victory was improbable, it could only be achieved it you turned off the TV and didn’t watch it happen.

It was a tip about life I would have passed on to my son if I’d had one. JohnPaul was my stepson, but step tips didn’t work. They lacked the blood bond that could make a kid actually believe some total horse malarkey idea from his old man. Step kids always rolled their eyes at step tips. It had been kind of disappointing to me to find out that being a stepdad didn’t carry any automatic powers that made a kid your own personal totally gullible disciple. It was probably a relief, though, too. He couldn’t blame anything in his life on a misplaced trust in me.

Mary came outside after the phone call. She had a tossed salad face. I couldn’t tell if there were too many carrots or not enough tomatoes.

She walked over and sat down next to me on the swing. It wasn’t as good a swing as the one we had at Court Lane, but it was good enough. It was a swing. They were all good. Except the ones that were tires hanging from a tree limb by a rope. Those were torture chambers you stuffed fat kids into when you were feeling really mean.

She adjusted her legs four or five times, and stared off into space.

“Well?” I asked finally. Mary liked to make me sweat a little before delivering news. It was the cat in her. She liked to toy with my brain like it was a ball of yarn. It had taken me awhile to learn to be patient with my impatience. She was always happier after a little harmless toying around. And my brain didn’t work any better or worse whether it was raveled or unraveled.

“It went okay, I think.”

“Great. Did they apologize profusely and put the check in the mail?”

“Palizzi dropped all his counter claims and reduced it all to one. He wants Humphrey to dismiss the whole case since the one year statute of limitations in the contract has expired on our complaints.”

“So Cimino’s assurance that the stockholders would want Parametric to pay us if we were owed any money was a crock of beans. They don’t even want to find out if they owe us anything. They just want to cover up the whole mess. No surprise there. The higher up you go in a company, the bigger the liar you’ll find. There seems to be some sort of direct correlation between power and baloney.”

“Palizzi even told Humphrey point blank he would appeal her decision if she ruled against him.”

“He threatened her? Whoa. Did she give him the finger?”

“She was a little cheeky. She asked him what about the other nine points he had made in his filing. He stuttered around and said, well, you know. Right, she said. Then she said she wasn’t born yesterday. She asked Palizzi if she granted his motion was he saying that there wouldn’t be anything left to deal with. He said no. She sort of mused out loud that it could be argued that this was all an on going thing. I said that at least a year existed under the contract for us to have arbitrated, so how could the whole case be dismissed. I also reiterated that this was indeed an on going dispute, not a one time event several years ago. It happens every time they send us a Royalty Report.”

“What’d Palizzi say to that?”

“He just kept saying, nope, nope, none. Pretty cocky.”

“What happened to the nice guy with twins?”

“I guess that was off the record. He’s just doing what Parametric wants him to do now. It’s his job.”

“Wonderful. Hi Mary one minute and erase you the next. Do these guys have an on/off switch for human versus ruthless mode? What did Humphrey decide?”

“She asked me if I understood what he was asking. I told her yes, he wanted to file a motion to dismiss the case and that I’d anticipated that this might happen. I said if he was going to do that, I would need to see the Plante Moran audit Working Papers from Mark Robinson in order to properly respond. I don’t know where the inspiration for that came from. It just popped out of me.”

“Didn’t you and Palizzi already discuss getting those papers?”

“Yeah, but he refused to cooperate without the Arbitrator okaying it. Humphrey asked me if I thought Palizzi would be enlightened by the Working Papers. It was kind of a weird remark. I said I didn’t know what was in them, so I couldn’t say.”

“What do you think is in them?”

“Hopefully, some explanation to the difference between what Robinson told me on the phone and what he wrote in his report. The “significant discrepancies“ between the Sales Database and the License Key database. Humphrey said she tended to agree with me and asked Palizzi what he thought. He started stammering like mad and said it might be boxes and boxes of stuff that would take forever to go through and it would cost his client a lot of money for his time.”

“You’ve got to be kidding. He wants mercy for Parametric’s poor billion dollar wallet?”

“Humphrey laughed at him and said she hardly thought it would be boxes and boxes. She okayed it, Steve. It was a huge win for me.”

”I told you you’d do great.”

“It’s all so weird. We have a contract governed by Michigan law, using Michigan lawyers, and arbitrated in Michigan, and I’m not even a lawyer.”

“And we’re in a trailer park in California, roughly two thousand three hundred and thirty-seven miles from the scene of the crime.”

“You’ve been MapQuesting, I see.”

“Google Maps. I love that program. You can use the Satellite view and see our RV sitting here with cigarette smoke wafting out the window. If I could find out when the satellite photo gets taken, I could climb on the roof and bare ass the world.”

“You would think of that. Thirty years ago, you’d have put a Peace sign up there.”

“Ouch. You’re right. I’ve been degraded by life.”

“I don’t think you can blame it on life.”

“So what’s the next step?”

“Palizzi gets two weeks to file his Motion to Dismiss. Then we get two weeks to file a reply and he gets two weeks to file a reply to our reply and two weeks later, on April 3^rd, we have another phone conference and she announces her ruling.”

“He gets two filings and we only get one?”

“That’s the way it works.”

“When do we get the audit Working Papers?”

“Right away. I’ll send an email to Mark Robinson tomorrow.”

“So if Humphrey denies Palizzi’s Motion, he doesn’t have any cross complaint left?”

“Yep. Nothing. The next step would be Discovery. We’d give her a list of all the things we want to examine and she’d decide how much of it to allow.”

“Then what are you worried about?”

“What makes you think I’m worried?”

“You’re talking too slow, there’s a wrinkle over your eyebrow, and you’re looking over my ear top when you speak.”

“Your ear top?”

“Yeah. You know, past me. The old out of focus deal.”

Mary laughed. “Okay Sherlock, you’re right. I am worried. About Humphrey. How can she entertain a motion to dismiss the whole case, based on a clause in the contract when that same clause clearly gives us the right to arbitrate at least for a one year period. I guess I could have argued against allowing the motion, but that would have led to having to argue the technical points on the spot with Palizzi, which I might have botched without some legal help at my disposal. By allowing him to argue it in writing, I got Humphrey to okay me getting the Working Papers.”

“Parametric is having the same fear of arbitration as Arbortext did of audits.”

Mary changed the subject. “I ran across an advertisement for a PTC User World Event schedule the other day about the user group conference concerning Parametric and Arbortext. Sterken’s partner Paul Grosso is a Doctor and still prominently around, even a featured speaker at the event, but Sterken was just lumped in with some other leftover Arbortext personel and did not appear to be a speaker of consequence.”

“He’s becoming de minimus.”

“I’d say so. Actually, that’s been happening since the venture capitalists broke out their wallets in 2000 and immediately replaced him as the CEO.”

“Smart move. They’ve gone from a failing business to a big winner since that decision.”

“Blueberry had something to do with that. And some creative bookkeeping.”

“Let’s hope the Arbitrator manages to grasp that.”

To be continued . . .

Chapter Forty-One

Picking Our Poison

Paul Cimino, Parametric’s corporate counsel who had refused to return any of Claudia’s follow up phone calls during the past year, phoned us a few days after we filed our Arbitration papers.

Gee, that was easy.

He exchanged pleasantries with Mary and asked if she knew why he’d called. She said she did, that it was to check her out. See if she had any brains. Tee hee. Again he offered $100,000 to settle the matter. Mary again refused and informed him that our evidence indicated they owed much, much more. He said we’d never get any more. But if we were owed money, the Parametric stockholders would want him to pay us. Since these two sentiments were diametrically opposed statements, Mary responded by some exorbitant eye-ball rolling for my benefit. Scaled up lip spew.

A short time after the phone call, we were introduced to Lawyer Number Ten – oops, Eleven. I forgot to add Cimino to the list. Michael Palizzi was a Michigan lawyer whom Parametric hired to handle their side of the Arbitration case. He and Mary were introduced to each other in a phone call with Hannah Cook, the Arbitration Association representative who would be moderating our case.

The first order of business was picking an Arbitrator from a list provided by Ms. Cook. Each side was to select three and then come to agreement as to which one they could both settle on. A few days before the deadline for providing our selections, Palizzi phoned Mary and the two of them agreed, after very little discussion, on Mary’s second choice, Kathryn J. Humphrey, to be the Arbitrator. She was a lawyer from the Michigan law firm of Dykema Gossett.

Hannah Cook had mentioned that each party could begin the Discovery process without waiting for the initial conference call with Humphrey. When Mary told Palizzi she would like to request Mark Robinson to send his Working Papers, however, Palizzi did not agree to this and said there would be plenty of time later.

Then Palizzi and Mary discussed the matter of having twins, which his wife had just done and Mary had already done quite a few years earlier. Mary gave him some parenting advice, which he thanked her for since he was tearing his hair out trying to keep up with the new found largesse in his family.

And so it came to pass that Lawyer Number Twelve entered our life in the form of Kathryn J. Humphrey. This fine upstanding Michigan attorney was submitted to Hannah Cook as the chosen Arbitrator for Blueberry vs Parametric, and the first telephone conference session among the parties was scheduled for the early days of February, 2007.

“Well,” I remarked to Mary, “we did it. We finally did it. We’ve fought our way through Kevin Dwan, Larry Bernheim, Judge D. Lowell Jensen, Dick Blair, Jim Sterken, Joyce Svechota, Cherie Van Allen, Jim Haggarty, Ray Schiavone, Dave Peralta, and Mark Robinson. The only thing we have to worry about now is a crooked Arbitrator. She’s the only ringer left in the deal.”

“Please don’t say that,” Mary replied.

“It’s true.”

“She’s going to be fair. This is her audition for becoming a real judge. She has no reason to do anything weird.”

“That’s what we thought about Mark Robinson and Plante Moran. What if they dangled the magic hundred grand in her face?”

“They wouldn’t do that.”

“They do it all the time. Judges are no different than politicians. They’re all for sale. Easiest way to get justice is to buy it.”

“You’ve been watching too many movies.”

“That’s what the Mafia always says. Before they’re indicted.”

“Great. Now you’re going to tell me they’ll put out a contract on us.”

“I was thinking about checking out the price of Kevlar vests. But they’d probably shoot us in the forehead or blow up our car. No sense wasting money.”

“Steve. Please. I’m going crazy. I’m already scared to death. Please stop.”

“Okay. I’m sorry. Don’t be scared, though. This case is pretty simple and you’ve proved they’re crooks beyond a shadow of a doubt. Hell, they’ve proved it themselves by all their actions to thwart us from performing the audit. That’s not the way honest people act. If this arbitrator can’t see the truth, then she’s just another crook herself. And I wouldn’t be at all surprised if she is and that’s how it turns out.”

“Then why are we doing it?”

“Because it’s the right thing to do. Life isn’t about getting rich. It’s about doing the right thing. You know that better than me.”

She shook her head and smiled. “We’ve given them a hellava run for their money, haven’t we?”

“Yes you have, Mary. Yes you have. And we’re not through yet. When all is said and done, no matter what happens, you’ll be proud of yourself. And so will I and so will your kids. The rest of these cockroaches will have to live with who they are and what they did. They’ll be running for cover the rest of their lives every time the lights come on.”

“More like running for their lawyers.”

“Amen to that.”

It was almost over.

How many times in the past five years had I had that thought only to see the end grow farther away, not closer. And the picture get murkier, not clearer. In some ways it was a microcosm of life, shoved down my throat resoundingly to close out my last five years in my fifties. The pursuit of Understanding and Wisdom, the chosen foundation that I had built my life upon, at the expense, if necessary, of any other worldly gain or achievement, seemed no closer to fulfillment now than it did the first time I put my hand in the fire and learned that it burned and it hurt.

Six months ago, I had turned sixty. Wow. No way around it. I was now an old man. A Senior Citizen. From here on out, I would be an irrelevant member of the bustling young world I had thrown my weight around in for oh so many years.

I had thought to cruise into this awesome plateau, absorbing it slowly as it neared, putting myself and my life into some sort of historical and philosophical perspective. Instead, it had swooshed in upon me, almost hidden amidst the most intense and brutal period of my entire life. 

It was therefore fitting that the final hand of this awful game of fate would now at last be played.

To be continued . . .

Chapter Forty

Blueberry Bites The Bullet

Mary and I sat down to have the Big Talk.

It was February of 2006. Parametric had clearly drawn the curtains on any further discussions. Eff You, Peanutsville, loud and clear. The ball was in our court. Fish or cut bait. Sink or swim. Pony up or shut up.

“I figured out why everyone keeps offering us $100,000,” Mary said.

“It sounds a lot bigger than $99,999.99?”

“It’s the largest amount that is acceptable as an expense that is not deemed to have a Material Effect on the company and its stockholders. Petty cash limit, in other words. It doesn’t have to be accounted for. In the stockholders’ report.”

“A Miscellaneous Expense?”

“Correct.”

“Blueberry’s petty cash limit is twenty-five dollars.”

“I’m sure Parametric is aware of that. My brother Don says they know everything about us, all the way down to whether we use one ply or two ply toilet paper.”

“Peepers.”

“Get serious, will you? We’ve got an important decision to make.”

“You’re right,” I said. “Machete or shot gun. You’re a Tarantino, by the way. How come you don’t know any Mafiosos? We sure could use one.”

“We have to either give up or file for Arbitration.”

“So we file for Arbitration.”

“We? I don’t see you filling out any forms.”

“Well, . . .”

“Or coming up with any money.”

“Well, . . .”

“It’ll cost us about ten grand to get the Arbitration process started. Six thousand for the fee and then we have to pay for the Arbitrator, too.”

“I thought it was two thousand to file.”

“That’s for an expedited case and limited Discovery. Six thousand allows you to ask for more than $500,000 in awards. It’s considered a Complex case then.”

“And more Arbitrator money and more lawyer money.”

“You’re learning. And we don’t have even two thousand, let alone ten. Just to get the process started. Who knows how much more it will cost to get it concluded.”

“Where’s the good news?”

“I’m not done with the bad. We also owe Claudia Rast $15,000. Which she has been nice enough not to hound us for. We have to pay her bill before we can ask any more help from her for the Arbitration process.”

“I’ll give Dweeble a call. I’m sure he’ll offer to help.”

“I said get serious.”

“Twenty-five grand, huh. Wow. Well, there’s the Disbursement money. Blair’s got to hand it over some day.”

“With him, you never know. He’s not a well person.”

“He’s not Italian, though. Maybe we could break his kneecaps.”

“That thirty-one thousand Disbursement money would get us in the Arbitration door. After paying Claudia, we’d have six grand left to our name.”

“Well, thirty-one thousand ain’t good for much else, is it?”

“You have a point. So, we use it for Arbitration. That brings up the next problem.”

“How many more are there?”

“Lots. But only one that matters now. The remaining six thousand won’t be enough to pay Claudia to handle the Arbitration. That means we have to do it ourselves. Little us against giant Parametric. Not good odds.”

“You’re forgetting one key point.”

“And what would that be?”

“We don’t have any other choice.”

Mary got up and paced back and forth. She looked a little sweaty. I’d never seen this side of her before. She stopped in front of me.

“I can do this, right?”

“You can do it.”

“You’re going to help me, right?”

“Absolutely.”

“You’re sure I can do this?”

“You can do it, Mary. You’re brilliant. Fearless. Eloquent. You’ll whip their ass. Seven lawyers or twenty. It don’t matter. You know this case better than anyone.”

“I can’t do this.”

“Okay. We give up, then.”

“I’m not giving up.”

We looked at each other. Every now and then in life there was a moment that needed no words and no amount of words could convey what a simple look between two people who knew each other inside and out could express. Such a moment occurred now. And the only visible sign of communication was the two sad little smiles that emerged on our faces after a long, long journey down into the eyes of our souls.

 “Screw it,” I said. “Let’s beat these sonsabitches.”

“We can do this,” she said.

“We have to.”

Claudia Rast was quite pleased with our payment of the severely overdue bill. She also graciously agreed to provide her legal expertise if and when we needed it during our self-representation efforts. For an additional two thousand dollar retainer. Fair enough.

Here we go again. Little legal beagles, jumping into the shark infested waters of the justice system to dog paddle our way to the promised land.

And so, in June of 2006, Mary and I prepared our Arbitration filing using our tried and true technique: She prepared and I waved pom poms. It was getting harder and harder to remember that I had once been a very bright boy and a useful member of society. Parts of society, anyway. Maybe not all of it. Some of it. A pretty small part. Still, it was a part. Okay, so it wasn’t. Society was for ants and bees. I was a mountain goat. In my dreams. Probably, I was more like a mole – snerking around underground eating worms and making holes in the dirt that went everywhere and nowhere, biding my time till someone stuck a pitchfork through my neck and put an end to the disruptive mess.

These last few years my usefulness was certainly much, much diminished. Where I had once driven the car, now I was just a passenger. Gazing out the window at the scenery blurring by while someone else focused on the road ahead and the gas in the tank.

And a very strange thing was settling inside of me. With each new disaster came also, inexplicably, a growing sense of peace. A sense that I had driven as far as I could as long as I could as well as I could and was simply done being the driver. I had released control. I was eight years older than Mary and for the first time in our life it made a difference. She was younger, faster, fresher, smarter, tougher.

Blueberry was now more her company than mine. I was just the maintenance man now. She was the driver.

The last court session had closed the book on me and Kevin “The Worm” Dwan. Who had won and who had lost meant practically nothing to me any more. He was finally gone. That was all that mattered. Flushing this miserable turd from my life was a resounding relief. So long, Jerk. Have a good life. Any where else but in mine.

In July we finished our Arbitration filing and sent it off to Claudia for her expert attorney eyeballing. She gave it the okay. After all, according to the Arbitration Guidelines about all you had to do was say you had a beef and wanted it arbitrated. It wasn’t necessary to lay out your whole case, like you would have to do if it was a court trial.

The filing was mostly a restatement of the Demand Letter we had sent the previous year. Mark Robinson’s white washed, cover up Plante Moran Audit Report had severely crippled our ability to make the filing stronger with a direct accusation of the Accounting Fraud that was surely going on. We were confident, though, that this Fraud would be unearthed during the Discovery process of the Arbitration proceedings and the Cover Up, as well as the Fraud, would be exposed.

We had four thousand left at this point. Which would not be enough to pay for the entire Arbitration process. We would have to come up with additional money somewhere, somehow along the way. Something we had been doing for quite a long time now. One more journey into the unknown with our Have Faith bumper sticker stuck to the rear of our Hopemobile. If thirty-one thousand wasn’t really much use for anything but the Arbitration, then four thousand that wouldn’t be enough wasn’t much use for anything either.

So we took a thousand of this remaining four and rented a four bedroom condo in North Lake Tahoe’s Incline Village which was owned by a friend of Mary’s who gave us a fabulously discounted deal on a week’s rental.

All of Mary’s six kids, two husbands, a couple of boy friends, and by now four grandchildren joined us for a week long vacation. For the first time in two years, the entire family was all together in one place at one time. And who knows how long it would be till the next time.

In early September of 2006, nearly five years in the making, we at long last filed for Arbitration against the Thieves of Arbortext/Parametric.

To be continued . . .

Chapter Thirty-Nine

Eff You, Peanutsville

Wherefore Comes the Behemoth from out of the East.

Goliath on Steroids.

When Mary and I first learned that Arbortext had been acquired by Parametric Technology, we had an initial hopeful reaction. Maybe this was good. Maybe they would just pay us honestly. Maybe they were different. Maybe they were so big they didn’t really give a hoot about a few hundred thousand one way or the other.

Proving we had learned very little from our association with Arbortext and Applix/VistaSource/Parallax (and Corel Corporation, the vendors of WordPerfect, but that’s another story of corporate thievery – one at a time here) about American Corporate Policy. Which was, resoundingly and without qualification, Eff You Peanutsville. The laws and the truth be damned. Contract-schmontract. That’s why we have ten thousand lawyers on call at all times. Whom we’d rather pay than you. Even if litigation costs more than the bill owed.

It’s the principle of the thing, you see. We’re important and you’re not. And we never, ever miss a chance to pound that into a small potato’s skull. It makes us feel Superior.

Parametric was different, for sure. But only in style. Where Arbortext concocted lies and accounting records, Parametric simply ignored us. Where Arbortext provided elaborate royalty reports that were utterly false, Parametric changed the entire format and provided reports that were undecipherable, with wholly new product names. Albeit not so undecipherable that it could hide the fact that maintenance royalties were still not forthcoming, despite Mark Robinson’s audit conclusions. Where Arbortext had names and faces, Parametric was pure Amoeba. The Anonymous Blob.

Claudia Rast’s phone calls and emails in an attempt to further discuss her Demand Letter to Arbortext were so much fodder for the ozone layer.

Very clever.

Not clever enough for the eagle eyes of Mary Tarantino, however. The big old Blob secreted an interesting bit of slime. Names and Faces pay attention to detail and make small mistakes like Joyce Svechota’s $464 editing error that had opened up the whole can of worms. Big Old Blobs make whopping errors from lack of attention to, or concern for, the details.

One error was quite pleasant for us. They apparently weren’t aware of Dick Blair and his Receivership and sent their royalty report and the accompanying royalty check to us, not him. The first royalty income we had received in two and a half years. Dick Blair had either lost his “thinking” cap or stopped caring now that he had gotten paid or actually accepted the Judge’s directive that all future royalties should go to us until we matched up with Dwan’s disbursements from the sale of our home. Whatever. We did not seek out the answer. Straight to our poor emaciated bank account we flew, endorsement signatures firmly scribbled on the back side of the check. Dinner and the movies, darling? Why yes, I believe that would be fine.

The other error was quite revealing. Parametric’s second royalty report, delivered in January of 2006, included royalties for an Arbortext product called Epic Architect. A fairly goodly amount of royalties. Blueberry, that is Mary, was most certainly aware of this product. It had existed from the very beginning of the contract in July of 2000. Arbortext had never reported any royalties for it, however, and even Mary did not associate it with Blueberry’s technology. I won’t speculate whether Asleep At The Wheel was aware of it. That would be a cruelty to animals violation.

Astoundingly, Parametric had casually and voluntarily plopped into Blueberry’s lap clear and convincing evidence of five and a half years of Arbortext thievery. Whoops. Excuse me. Breach of Contract. Unjust Enrichment. Fiduciary Misconduct. Fraud.

Jim Sterken could not possibly have advised Parametric to include what he had not, so it seemed that Parametric had deduced Blueberry’s royalties for this product from simply reading the contract and then ascertaining what Arbortext products included our technology. A deducement that had eluded Mark Robinson completely during his strenuous forensing. Parametric was unaware that Architect was on the Arbortext hush-hush list. The list that also contained Intermarket.

How would they know about this subterranean list? After all, in the acquisition agreement, dutifully reported to the Securities and Exchange Commission and Parametric’s stockholders, Arbortext had provided warranties and covenants that they were clean and that there were no disputes of a litigable nature anywhere in their known universe that could possibly impact Parametric. This despite the Acquisition being negotiated while Blueberry was seeking to verify its long running complaint of Arbortext misconduct, and signed shortly after Blueberry’s audit was completed, and the ink on the acquisition agreement not even dry before Parametric received Blueberry’s Demand Letter.

In other words, Arbortext’s warranties and covenants were total bunk and Parametric Technology’s stockholders had been gouged $194,000,000 of company cash for a crooked company with a false and inflated revenue picture.

Parametric was no dummy, though. It probably didn’t take any rocket scientist on their staff to recognize fairly quickly that Jim Sterken was a shifty-eyed scumbag with a very dirty closet. So the agreement contained a Provision (perhaps these were just ordinary acquisition type dealiebobs that people in the know knew and people like Blueberry didn’t) that $19,000,000 of the acquisition price would be set aside in an insurance holding tank to pay for any unexpected surprises like an IRS tax deficit or a discovery that the covenants and warranties were incredible horseradish.

Parametric was covered no matter which way the cookie crumbled.

Parametric did take the precaution of informing its stockholders, in their January 2006 report about the Acquisition, that a potential royalty dispute could add further to the Acquisition price tag. This information was spewed forth on page 86 of their report, where eagle-eye Mary discovered it.

Blueberry was not mentioned by name, of course. And none of the multitude of stockholders apparently inquired as to who exactly would be disputing royalties and for what amount. And why. At least, no one contacted Blueberry for this information.

Technically, the Acquisition was yet another breach of Arbortext’s contract with Blueberry. Which required that each contracting party inform the other in the event of a change in ownership. Which Blueberry had done when Dwan was expunged, but Arbortext had not when Parametric gobbled them up.

Contract disobedience was, by now, a given with Arbortext. To them, this document was primarily a legal maneuver to steal all of Blueberry’s source code and turn a lousy product into a profitable one. They enforced all provisions which obligated Blueberry and ignored or abused any that pertained to them. Contracts, as we were sadly learning, were worthless without the means of enforcing them. Which Arbortext, and now Parametric, had and Blueberry did not.

“Get it in writing” was an American myth. Writing did little more than provide fodder for attorneys to wrangle over in exchange for wads of money. This is probably why legal papers are not written in English, which can be parsed for grammar and understanding. The term “Legalese” is not a joke which refers to someone who has no concept of the English language and its proper use and should never have been given a high school diploma. No, legalese is a purposeful bastardization of language solely intended to destroy centuries of human effort to achieve communication and understanding, for the sole purpose of making lawyers rich, and powerful people immune from prosecution while subjecting unpowerful people to it.

This fact is not taught in school. What is taught is that we have a Legal System which exists to provide Justice. This is utter hogwash. We have a Legal System to keep the Rich rich and secure and the Poor poor and insecure. Pure and simple.

And when too many poor people get perilously close to joining the rich, we have the Stock Market and Prime Rate adjustments to wipe them back out to poor.

Too simplistic? Fine, muddle your head with the Wall Street Journal and Congressional Hearings and Federal Reserve Reports and all that ilk of doubletalk and have a ball being erudite and sophisticated. While they steal you blind and keep you right where you are – or lower.

 “What are you doing?” Mary remarked, looking over my shoulder as the sweat dripped off my forehead onto the keyboard.

“Ranting,” I responded.

“Are you crazy? Snap out of it.”

Grouse. Grouse. Okay, I take it all back. Grumble. America is wonderful. The greatest country in the world. Full of honest, hard working, decent law abiding citizens with a splendid government of the people, by the people, and for the people.

Except in Ann Arbor, Michigan, Walnut Creek, California, and Cambridge, Massachusetts. The nesting locales of Arbortext, Plante Moran, Dick Blair, and Parametric Technology.

No offense to any normal people who may live in those vicinities.

Grrrruff, grrrrruff. Grrrrrrrrrrrrrrrrrrr.

To be continued . . .

Chapter Thirty-Eight

The Demand Letter To Arbortext

Watching Blair and Bernheim enrich themselves at our expense was pretty disgusting. But digesting the Plante Moran audit was even more so.

“I still don’t understand the MRO.com Intermarket thing,” I said mentioned to Mary one morning. “Mark Robinson doesn’t find any evidence of it on his first pass at Arbortext’s books, then we fax him our evidence of it, then he finds one example. MRO. Was it always there and he missed it? Or did Arbortext stick it in there so he could trivialize our evidence? Like they’ve got two sets of books.”

“I don’t know. It’s a red herring. What he said about it is pretty ridiculous, too. Where is his audit? I need to read it again.”

After a brief search, it was located on the floor underneath the dinette table. Our filing system in the Rhinoceros Palace was a wee bit less organized than it had once been while living in an actual home with an actual office.

Mary paged through the audit and then read the first MRO reference:

“E-Catalog (a.k.a. Intermarket), as well as the Arbortext Site License and the Arbortext Site License maintenance, relate to Arbortext’s August 2000 Application Development & Software License Agreement with MRO.com (WP-10). Arbortext was developing a product called Content Manager by extending the functionality of Arbortext programs and integrating them with MRO’s Intermat product. Soon after the agreement and some licensing of software to MRO in September 2000, the joint development effort was abandoned. The total revenue that Arbortext received that was related to E-Catalog and Site License was obtained from MRO.com (refer to Exhibit D for amounts).”

“So,” Mary said, “he admits there is an E-Catalog/Intermarket, just like Zoltan Gombosi says on his resume, but he shrinks all the other evidence of Intermarket that’s all over the web and the $4,000,000 Gombosi mentions this product hauled in and explains it all by this one and only one contract with MRO. Is that preposterous or what?”

“That’s the word Jim Sterken used when we first complained about missing sales. Right before a whole year of them magically turned up in their records.”

“Look at his concluding sentence. He states any and all revenue relating to E-Catalog is solely obtained from this MRO relationship. Now look at his Exhibit D for the amounts. There’s $100,000 for an E-Catalog Application License and $417,643 for a Site License. Those are Arbortext products! MRO got billed for purchasing them. And Robinson says ‘some licensing of software’ like it’s a couple of bucks. We’re talking over a half million dollars here. Then he says the ‘joint development’ was abandoned, like that’s all to that story. Implying no other companies bought Intermarket and the Intermarket product was abandoned. Only the joint relationship with MRO was abandoned. The joint development was not to create Intermarket, it was to integrate Intermarket into MRO’s Intermat product. But not before they paid over half a million to Arbortext for Arbortext products, i.e., E-Catalog. What’s really bizarre is that, according to Robinson’s Exhibit D, this supposedly abandoned development continued to generate revenue to Arbortext in 2001, 2002, 2003, and 2004. Mostly from Partnership fees and Maintenance fees. Meaning MRO continued to pay Arbortext for these Licenses, this supposedly abandoned relationship. There’s even a Maintenance Initial in 2002. And a couple of Technology Partner fees and Maintenance in 2002, 2003, and 2004. MRO is continuing to pay Arbortext for its software right up to the audit! Four years after Robinson says the whole thing’s canceled. The joint development might be abandoned, but the customer – MRO – is still paying for Arbortext software licenses. It even says on the Exhibit that E3 Standard Option/PWDO is included. That means our technology, Interchange, is included! Yet Robinson has the gall to profess ignorance about what was in a Site License. Look at your own exhibit Robinson! (See page 18, Exhibit S, the Plante Moran Audit) E-Catalog is still listed as an active SKU product license! In 2005. How can Robinson ignore this?”

“Robinson also doesn’t mention that Karen Sharplin initially said that E-Catalog and Intermarket were never developed and never sold. Which was a lie and he knows it.”

“This audit gets worse every time I look at it. Robinson is bending over backwards to cover up this whole thing. His report never mentioned the clear and convincing evidence we gave him regarding this product. It was one of the main things we stressed to him and he never addressed it! Worse, he tries to erase it.”

“Even after he found it.”

“Even then. ‘It is unclear as to what software components are contained in E-Catalog or are part of a Site License.’ What utter nonsense. Look at the invoices, look at the product descriptions. What is he doing in there auditing them if he can’t even say what the heck is in a site license? Look at your own Exhibit, Mr. Robinson. There’s a line called ‘Partner Program Marketing Fee – Consulting’ with payments for this consulting in 2002, 2003, and 2004. How can Arbortext be getting money for consultation from an abandoned joint development relationship? Everything Robinson says is refuted by his own evidence. Incredible.”

“I bet Kessler International wouldn’t come back with some lame ass report like that. It’s total bullshit.”

“That’s why Peralta wouldn’t let Kessler come in for the audit. Kessler would actually DO one.”

“If Dick Blair had simply done his job, which the Judge told him to do, Peralta could never have kept Kessler out. This whole nightmare is directly Dick Blair’s fault. So, what are we going to do about Arbortext now?”

“I’ve got a call into Claudia. We’ll see what she advises.”

After conferencing with Mary and I, she decided it was time to send a Demand Letter to Arbortext. For payment. Of $750,000. To Blueberry. A greatly understated, but gentlemanly amount.

The meat and potatoes of her Demand Letter were provided by Mary. She was the only one who truly understood what the Audit had revealed and what it had hidden. And the only one who could do the math. And had the evidence. Three and a half years of her research and Internet sleuthing were finally ready to be officially presented.

And so satteth Mary down. On the RV couch at her laptop perched atop a long, narrow card table (Kmart green, for you color aficionados – the obligatory one wobbly leg), coffee mugs all around, Life Channel movies murmuring in the background, papers of evidence piled high hither and yon to the left and right and on the floor and up in the cabinets and over in the bedroom closet and under the bed and out in the tool shed and across the lane in the trunk of the car and beyond the park to the storage rental space — to compose her J’Accuse!

Mr. Me’s contribution to this opus? Executive Assistant. In charge of fetching, feeding, cleaning, shopping, sounding boarding, commiserating, encouraging, swatting flies and stepping on spiders, getting out of the damn way, and any other type of action that contributed to her humming along the road to completion.

 So this is what it’s like to be a lowly, unsung, housewife, I mused. It has an anonymous comfort to it, I suppose. Not much plotting or conniving involved. Steady, meaningful work. Very brief moments of satisfaction. Very brief. Lots of room for day dreaming. It was definitely not as enjoyable as being a useless male asshole, but I think I could learn to live with it, if such should become my fate.

When Mary had completed her work, she emailed it, along with pages and pages of evidence, to Claudia. Who then organized and composed it in legalese, attached all Mary’s evidence as exhibits, and mailed it to Peralta.

We high fived and sat down to wait.

Was this the Moment? Was this the Day? Was this the Time? Today? That Greatest Moment of Them All?

Nay. Nope. Nada. Nyet. Non. Nae. Nein und abermals nein! Fuhgeddaboudit!

When Claudia informed us that she had received a response to her Demand Letter, there appeared a new wrinkle in our inkle.

The response came from Parametric Technology, not Arbortext. The entire cast of evil, sneaking, entrails dwelling Arbortext characters we had learned so much about and grown to loathe so passionately had disappeared out the back door, wallets stuffed to overflowing.

In their stead was one person at Parametric. Paul Cimino. Parametric’s corporate counsel.

His response foreshadowed by a couple of years O.J.’s book proposal idea of If I Did It. In Cimino’s case, it was “If We’re Guilty . . ., so what? It all washes out if Blueberry accepts, ta da, a pay off of $100,000.”

Note:

See Exhibit T for Claudia Rast’s Demand Letter to Arbortext.

See Exhibit U for a picture of my brains splattered against the RV wall. Just kidding! Exhibit U is still available for use in a later chapter.

To be continued . . .

Chapter Thirty-Seven

The Choice Chunk Of Change

The Audit at least produced one positive result.

The tiny sop from Mark Robinson that Arbortext might not be Interpreting the contract fairly for Blueberry and clearly owed us royalties on Maintenance sales and renewals, though cheering Mary and I but little, had a major impact on Dick Blair and Larry Bernheim and their espousal of Arbortext’s Buy Out offer.

The $100,000 Buy Out offer had never had any validity even by Dave Peralta’s skewed logic. In his initial presentation of the attractiveness of this offer, he figured Blueberry’s royalties over the three years he was placing on the Contract’s remaining length at $77,000. To offer a hundred grand instead was, to him, a magnanimous gesture.

What poppy-cock!

Arbortext wasn’t going to cease using Blueberry’s technology because of the Buy Out.  They wanted to own PERPETUAL RIGHTS TO BLUEBERRY’S INTELLECTUAL PROPERTY! To use any way they wanted. Making them direct competitors to Blueberry using Blueberry’s own technology for the ridiculous amount of $23,000 (100,000 – 77,000).

Of course, Dwan and Blair and Bernheim didn’t give a rat’s rear end about Blueberry’s future. Only Mary and I did. It was our livelihood. Our company. So Blair and Bernheim’s insistence for nearly a year that this was a real good offer was total, vicious baloney meant only to deceive a nodding, half-interested Judge. And to make money for Dwan, Bernheim, and Blair while destroying me.

But the Audit now wiped out any chance that this ludicrous Buy Out offer could be foisted off as an attractive offer even upon a ten year old child, let alone the Judge. The unpaid maintenance royalties alone amounted to more than $100,000. A proper interpretation of the contract would add several hundred thousand more on top of it. The 80% that had been lopped off way back in July of 2002 by a vindictive Jim Sterken. Plus, you know, that pesky $4,000,000 Intermarket disappearance thing.

Not that Arbortext accepted Mark Robinson’s professional analysis and started paying us for all the maintenance sales (which would also point toward unreported previous sales). That would amount to contractual compliance and a definite Scaled Up Opportunity for Blueberry royalties. Not gonna happen on Jim Sterken’s watch. No baby. Arbortext’s response to the audit (and later Parametric Technology’s) was to ignore it completely and proceed as though it had never been developed and never was released. It, like the Contract, was just another piece of paper they had no qualms about ignoring.

Which did not surprise Mary or me. What we had needed from Robinson was a direct indication of wrong doing that we could take to Arbitration, assured of a victorious outcome. His white washed Audit Report cover up merely hinted at the extent of the problem and then snuck out the back door leaving the burden entirely on us to finish the “forensic” investigation we had hired him to do.  To “play out” the scenario.

But at least Bernheim and Blair were derailed. The Buy Out offer was never mentioned by these two charmers again. Never existed and never sold and never shoved down our throats for over a year. Welcome to Never Never Land. Bernheim and his despicable client jumped on our bandwagon like they had been there all along in rabid support. No donations to the cause, of course. But we love ya, Mary, go get ‘em.

And Blair. Good old Aptly Named Dick. There was no way he wanted to ever revisit a year long power play to trumpet an offer that was exposed as absurd and have it, and his failure to jam it through, rubbed in his face like a, well, like a nice hot Blueberry Pie, which was known to provide protection against degenerative brain diseases and actually would have been good for him to eat, spiritually and physically. Much better for him than Crow.

No, Dick had a much more significant topic to discuss with the judge now.

His pay check.

He was DONE.

It was time for the “nice chunk of change.”

Wondrous Larry Bernheim, after a year of lawyer diddling, had succeeded in pushing the VistaSource debt collection through a few papers and systems and they finally signed off and agreed to pay us the $120,000 they owed.

It had taken almost two years for the combined incompetence/plain old gouging of both Blair and Bernheim to accomplish a simple debt collection matter that Mary or I or Dwan or all three of us together could have accomplished with ease. At no cost to any of us. Two years from that fateful day we had walked out of Blair’s office with a sinking feeling that his Receivership intended to thwart the court ruling and wipe us out. As it had. As he had. Two years after Mary had  the deal almost done, but was ordered by Blair to cease and desist because, in his fateful and evil words, it was “his money.”

Yes, indeedy weedy, it sure was.

The serious coins were now at last right there on the table for attorney hands to grovel over. This cab ride was at an end. All Bar heads to the till. Stand aside or be trampled.

Bernheim reached in first and took his 20% off the top.

His client, my dear absconded friend Kevin Dwan, should have ruefully noted by now that his association with Bernheim and the disastrous counsel provided by Bernheim was certainly turning out well for Larry. If not for himself.

And now, at long last, after two years of strenuous failure and incompetence and repugnant ethics and sabotaging and virtual inaction and playing dumb, the consummate Dickster presented his Time Card. He had failed to collect from VistaSource and he had failed to stop the Audit and he had failed to disburse any royalties. The only thing he had succeeded in doing over the two years of his Receivership was turning a secretary’s marginal task into a full-blown windfall for the Dick Blair bank account.

Included, of course, were the various and copious attorney gouges for “Reviewing Status.” This was an attorney concept of viewing their brains as batteries that needed to be recharged out of their client’s wallets at various intervals to keep said brains from simply forgetting what the hell they had already done and learned about the client’s case. Continually charging for no work and no progress. Simply to remain current. Up to date. On the job. Remembering, without secretarial assistance, what the hell the client’s name was.

But Dick was not one to confine himself to standard gouges, of which there were a “significant” amount. No, Dick was bold. Dick actually had entries on his Time Card for “Thinking.” I kid you not.

Thinking.

Did Dick consider this an additional function of his brain? Something only highly skilled $350 an hour lawyers had developed? Did this ancient art occur at a desk? In the shower? Mowing the back yard? Fully clothed?

Thinking.

What was he doing when he was actually doing? Was the thinking turned off? Scary.

The sum total of all this sinister Time Card bloating was nearly $70,000! The cost of the original year long court trial itself! The unbelievable gall of this miserable, foul smelling, oil spill, wild life poisoning little huckster. Hey Dick! Bend over and look around and upward between your legs for a vivid view of the essential you.

Calculator time.

Let’s see. $70,000 for Dick. $24,000 for Larry. Out of $120,000 from VistaSource. A small tasteful $94,000 for the venerable esquire thieves and a whopping $26,000 left for myself and Dwan, the owners of the collectible debt, to split. Some day, that is. Not now. Only attorney disbursements occurred now. Disbursements to Dwan and myself did not occur until nine months later in May of 2006. After two more court sessions, two more Judge’s rulings, and countless attorney emails back and forth attempting to grapple with the enormous concept of a 50/50 split of the remaining money.

After every last nickel that could be squeezed out of the case of Beigel vs Dwan had been layered like a frosted smile across the top of Dick Blair’s massive cake.

What a job, attorney boys. What a masterful job. Hey, Dwan! All that intercession you panted after Blair for. That produced ABSOLUTELY NOTHING. Are you getting a clue yet? Is the light filtering into the long lost city between your ears?

Were there any embarrassed sentiments from Dick and Larry over the Net to Clients? Not even a whisper. Not so much as a tiny flush of red around the gills. After all, there was money lying there on the table. It was their Divine Right to reach in and fistful it into their suitcases.

Lord. I know Mary wouldn’t question You about this ugly fact of life. And I’m not either, actually. I would, however, really like a Saia-like Hint from You of absolute assurance that THIS KIND OF HORSE PUCKY GETS PUNISHED IN THE HEREAFTER. WITH GUSTO. LOTS OF IT. WADS AND WADS OF IT. Thank you. Best Regards, Me. The kid you caused. Remember?

Oh verily I say unto thee unsuspecting seeker of justice through lawyers and legal thoroughfares: THINK TWICE. Give your outrage and anger a chance to subside. Remember that dinosaurs lived for 260 million years and nobody wonders one whit about which of them stepped on whom’s head.

Then THINK TWICE AGAIN. Seriously consider just eating shit and moving on.

AND AGAIN ONCE MORE.

It is an Unclean Land. Full of Unclean Hands.

And once you step through the door to it, there is no way back. For there is no back to return to.

To be continued . . .

Chapter Thirty-Six

The Plante Moran Cover Up

After the Christmas holidays, Robinson informed Arbortext he was returning for another forensic poke around to placate our concerns. After one day of poking, Arbortext closed its doors to him for nearly two months. He could not get back in to follow up on his fact finding. A return to the Kessler Barricade philosophy. Whenever any real investigation occurred or threatened to occur to the Arbortext accounting system, they freaked out and locked the doors.

Hey, Mark. Old number head. Seem a little suspicious in your Significant Experience?

And no wonder. His one day in there getting a perhaps unexpected print out of the License Key database, which recorded the licenses given to customers who had bought or been given the right to use our software technology, had, in Robinson’s phone call words with Mary, “significant discrepancies” compared to the licenses reported to Blueberry on its royalty reports.

Arbortext had been fully prepared to snow job him during his non-forensic efforts (forensic was apparently not standard procedure for him, but had to be Begged for), but they were caught off guard by his sudden return and the cracks in the façade of honest books appeared almost immediately.

This was bad enough, but, as we would eventually discover, Arbortext had a much larger concern on its greasy hands. For, coinciding with Blueberry’s audit, a no doubt thorough examination of their company was being conducted by a billion dollar company named Parametric Technology. An examination toward finalizing a $194,000,000 acquisition of Arbortext.

But more on that later. For the nonce, we only knew we had hit a nerve and Arbortext was suddenly not cooperating with the audit and had gone back to stonewalling. I will not suggest that this time was used to purchase shredding machines or to concoct alternative databases. No, that would be irresponsible and unprofessional speculation. More informally known as “Duh, Ya Think So?”

It was enough to make Dick Blair edge away from his 100% espousal of Dave Peralta’s $100,000 deal, though, which was quite an achievement. A year in the making. And even more stunning, old Hippopotamus Mouth Bernheim had not a peep of pop off from the profuse pontificatorium passing as his puss.

Mary and I waited patiently. More or less.

By late February of 2005, we grew restless with the delay and prodded Claudia Rast to send an official demand to Arbortext to re-open its doors. This seemed to do the trick and a week later Robinson returned and soon finished his fact finding forensing.

On March 21, nearly three years after we had first discovered Arbortext chicanery, the Plante Moran audit was issued. In final form. No input from us asked for. Just here it is and I’m done and here’s the bill.

It was a complete white wash. A Cover Up.

No mention was made of the “significant discrepancies” between the License Key Database and the licenses on the Royalty Report. That was apparently just for telephone wires. Not for the actual audit report. The Report itself can be viewed at the end of this chapter.

Robinson spends the first eight pages of his eleven page report explaining how he familiarized himself with Arbortext and its products vis a vis Blueberry. Then he begins to deal with the issues. My comments inserted between brackets ([ ]).

5. Specific items that were reviewed at the request of Blueberry.

19 SKUs from an old SKU listing

We were requested by Blueberry to investigate 19 specific SKUs that were part of an older SKU list that is in the possession of Blueberry. Exhibit D lists the 19 SKUs, an indication as to whether the SKU is still a current SKU, a description of the product, and the Arbor-text sales, by year, for the products.

[

Stressing the word “old” here is irrelevant and purposefully misleading. If an SKU existed, it was used and products were sold that required royalty payments to Blueberry. This list of SKU revenues amounts to $711,945. None of it was reported to Blueberry. Mark Robinson has no further comment on our “request” to investigate these SKUs or why none of this revenue was reported to Blueberry. In addition, it appears as though only ONE Site License was ever sold to a customer!

Mark, the words needed here are: More Investigation Called For.

]

E-Catalog (a.k.a. Intermarket), as well as the Arbortext Site License and the Arbortext Site License maintenance, relate to Arbortext’s August 2000 Application Development & Software License Agreement with MRO.com (WP-10). Arbortext was developing a product called Content Manager by extending the functionality of Arbortext programs and integrating them with MRO’s Intermat product. Soon after the agreement and some licensing of software to MRO in September 2000, the joint development effort was abandoned. The total revenue that Arbortext received that was related to E-Catalog and Site License was obtained from MRO.com (refer to Exhibit D for amounts).

[

E-Catalog (a.k.a. Intermarket) relates to much more than MRO.com, Mark. As the evidence we sent to you (see Exhibit E and Exhibit F) most surely indicates. However, the $100,000 received from MRO.com is paid in 2001 and not reported to Blueberry, which you do not mention. Your comments regarding the agreement and its abandonment come straight from the emails of Karen Sharplin, the new Arbortext Controller and Head of Finance – not from your forensic efforts.

Her first email informs you that this product was never developed and never sold. After we provided you with an SKU to look for, you discovered the MRO sale, and then Ms. Sharplin emailed you the baloney you are repeating here.

What you don’t mention Mark is that she lied to you in the first email which denied the existence of the Intermarket product, and attempted to cover up the lie and confuse the issue in the second email. See Exhibit P for the first email. The second email will not be discovered by us until later when we gain access to the Working Papers.

The MRO joint effort may have been abandoned in September of 2000, but Intermarket itself was not. Zoltan Gombosi and eleven other programmers continued to work on this product for another year. It was released in January of 2001. You can type “Arbortext Intermarket” into your Google search bar as I type these words and find pages and pages of references to this product. Hurry! They’re disappearing fast.

Or you can simply visit this web site page http://web.archive.org/web/20010604124514/www.arbortext.com/Think_Tank/think_tank.html and enjoy the splendid PowerPoint presentations concerning E3 and Intermarket. We recommend E-Content Power-Hour #7. You will come across a suggestion therein to phone up Vice-President of Product Marketing Mr. P. G. Barlett for information on Purchasing Intermarket. If this site has somehow disappeared when you click on it, just drop me an email at steve@blueberrysoftware.com and I will get it restored.

Robinson’s statement that the MRO sale reflects the “total revenue that Arbortext received that was related to E-Catalog” is totally false.

More Investigation Needed would not suffice to flesh out your comments here, Mark. This section goes beyond a White Wash and amounts to a Cover Up, plain and simple.

]

Arbortext Partners

We selected 15 Arbortext Partners in order to examine the quantity of software that was distributed to those Partners. The Partners that were reviewed and the type of relationship to Arbortext are as follows:

. . . list of partners . . .

Exhibit E shows the quantity and type of software that has been distributed as demos to each Partner as well as any software sales. In the two cases where a Partner purchased the software, we verified that software purchase in the Cumulative Royalty Report sent to Blueberry, Exhibit A.

[

So, in only two of fifteen cases on your Exhibit E did an Arbortext Partner actually purchase the software and generate a royalty for Blueberry. The other thirteen were evidently given away for free. Demos. Scaled Up Opportunities. Whatever.

]

Distribution

In order to review the software distribution and the recording of sales, we reviewed the customers listed in Exhibit F. Exhibit F shows all products that were distributed to the particular customer as well as the associated revenue. We verified that the Active Licenses identified in the “Key Database” (WP-19) had revenue associated with them in the Total Arbortext Sales Database (WP-1), We also verified the number of Active Licenses with the number of licenses reported in the Cumulative Royalty Report sent to Blueberry, Exhibit A.

During our preliminary review of the “Key Database” we found several instances where a customer had additional licenses available to them as compared to purchased licenses. This discrepancy was mainly attributable to poor record keeping practices at Arbortext prior to 2003. The current key distribution system is linked with the current product sales and is automated versus manual and is less prone to errors.

After our initial findings Arbortext performed a review of the “Key Database” to fix these errors. We reviewed the corrections to the key database with a sample of customers that had been recorded in error. Testing included matching active license keys to purchased license keys for the sample (WP-19).

In reviewing the revised active license keys database (WP-19) related to Blueberry software, we identified a total of 2,245 active licenses through Q3 2004. Based on the Blueberry royalty report (Exhibit A) there were a total of 2,284 purchased licenses through Q3 2004.

The discrepancies from purchased licenses to active licenses are mainly attributable to customers not utilizing all products purchased (one specific customer accounts for a substantial portion of this difference). Additionally, Arbortext has put procedures in place to review purchased licenses to active licenses as each renewal maintenance occurs.

[

So, Mark Robinson essentially allowed Arbortext to clean up their accounting system “errors” without providing any information as to what those errors were and what impact they had had on Blueberry’s royalties. Mark, Blueberry is not concerned with how many licenses were in the database after Arbortext cleaned it up, we are interested in how many were there before they cleaned it up.

And the current “automatic” system, which now has replaced the old “manual” system is still prone to errors! In fact, the active licenses still did not match the royalty report.

Robinson focuses on the words “active licenses.” This is irrelevant except for purposes of a cover up. Whenever a purchase is made, a license is recorded in the License Key database. It remains there whether the license is ever “activated” by the customer or not. Blueberry itself has unactivated licenses in this database. All of these licenses have been purchased and royalties are owed. This is the only fact of relevance to Blueberry and Robinson does not address it. Even though it is obvious that the License Key Database and the Royalty Report do not match. Not even a hint that More Investigation Is Absolutely Imperative!

Unbelievable.

Your Conclusion here is missing this point, Mark: Blueberry’s contention that Arbortext’s Royalty Report is not accurate is CORRECT. That is an inescapable fact and if you had mentioned it, it would have vastly changed the impact of this entire audit report.

]

Specific Customers

Exhibit G lists five specific customers that are believed to have Blueberry software based upon references found by Blueberry on the internet. Exhibit G also shows the results of our comparison of the Key Database, the Total Arbortext Sales Database, and the Cumulative Royalty Report.

•  LRN – The Internet reference suggests that LRN has Interchange. The Key Database, the Total Arbortext Sales Database, and the Cumulative Royalty Report are in agreement that LRN purchased Interchange and Blueberry was paid a royalty (WP-15).

[

Blueberry did not ask about this customer. It was merely part of an email thread in an exhibit we sent to Robinson about a customer (Trellis Neutech in Singapore) that we did ask about. Making this the first entry here smacks of an attempt to trivialize Blueberry’s concerns. IMO.

]

• Planetgarden – In a description contained on Arbortext’s website under “Our Customers,” it is suggested that Planetgarden.com has the ability to achieve results that are the same as what is accomplished with Interchange. From a review of the Key Database, there are no active licenses with Planetgarden.com for a Blueberry product. The Total Arbortext Sales Database shows that they did, however, purchase Adept Editor, Epic Editor, training, and consulting services from Arbortext (WP-16).

[

Well, since Adept Editor, Epic Editor, training and consulting do not provide Interchange capability, yet Planetgarden has this capability, perhaps it should be noted that More Investigation Is Needed.

]

• U.S. Coast Guard – A solicitation notice from the U.S. Coast Guard requests maintenance on 2 E3 single processor licenses and 2 E3 quad processor licenses (WP-18). Our review of the Key Database and the Total Arbortext Sales Database both agree that only one E3 single processor license and 1 E3 quad processor license were ever sold to the U.S. Coast Guard. This finding agrees with the Cumulative Royalty Report as well.

[

In other words Mark, the solicitation notice from the Coast Guard (which we sent to you) requests maintenance on 4 E3 licenses, yet only 2 are in the Sales Database, the Key Database, and the Royalty Report. Thanks for glossing over this point that Blueberry did not receive royalties on HALF of the Coast Guard sales. In fact, these sales seem to be missing from Arbortext’s records entirely, just like the $4,000,000 in Intermarket sales. You don’t seem to be mentioning that this is a PROBLEM.

]

• DFAS SB/FPA (Hill AFB) – This was another customer that was serviced by the same distributor that handled the U.S. Coast Guard order. Our review of the Key Database and the Total Arbortext Sales Database both agree that only one E3  Print/Web/Interchange license was sold. This finding agrees with the Cumulative Royalty Report states as well.

[

Once again, Blueberry did not stress this customer as a problem.

]

• Trellis Neutech S. Pte Ltd (Singapore) – The internet reference suggests that Trellis Neutech has E3. Our review of the Key Database and the Total Arbortext Sales Database both agree that Trellis Neutech has never been a customer of Arbortext. It is uncertain as to how Trellis Neutech may have obtained E3.

[

The “internet reference” does not “suggest” that Trellis Neutech has E3. It flatly states it, via a Trellis Neutech employee asking for internet tech support (from LRN) for his on going use of E3. If it’s uncertain how he got E3, perhaps More Investigation Is Needed.

Are we seeing a Pattern here of the need to Investigate Arbortext’s books and records? I’m sure you’ll mention this in your Conclusions section, right Mark?

]

Or maybe you won’t.

Robinsons’s Conclusions are quite remarkably bland of, well, conclusions. Except to limit them to only three areas of potential discrepancies! Allocation of E3 Revenue, Maintenance Revenue, and the MRO.com relationship.

On the first two, if Arbortext’s explanations and reasoning are correct, everything’s fine. Otherwise, it’s not. Gee, Mark. I think we all knew that before we paid you one half of your $28,000 fee to do some actual forensic auditing.

The third conclusion regarding MRO.com is particularly galling and represents Robinson’s second attempt to cover up the Intermarket product (bold again added):

“MRO.com Relationship – As detailed in Exhibit D, Arbortext received revenue from E-Catalog and a Site License. It is unclear as to what software components are contained in E-Catalog or are part of a Site License. Plante & Moran has certain documentation regarding this relationship and sales revenue (WP-10) but will defer to Arbortext as to what information can be provided to Blueberry.”

The above paragraph, carefully disguised, is Mark’s way of discussing our evidence of the $4,000,000 in hidden/missing Intermarket sales. We had not initially sent him any of our evidence about Intermarket, hoping he would just discover it on his own, but in his first examination of Arbortext, he had failed to find any sign of it. Or perhaps didn’t even look for it, even though it was pretty “significant” to us. So, in late February, before he went in for his final forensing, we faxed him Zoltan Gombosi’s resume and our Intermarket evidence. See Exhibit R for our faxed remarks to Robinson.

Subsequently, he came up with the MRO.com transaction and how does he address our evidence and our faxed concerns regarding this? By claiming not to know what software is contained in E-Catalog (Intermarket) nor what is contained in a Site License, even though he has documentation regarding it and WILL NOT ALLOW BLUEBERRY TO SEE THIS DOCUMENTATION UNLESS ARBORTEXT OKAYS IT!  

This also finishes off his attempt to limit any investigation of Intermarket entirely to this one MRO.com sale, just as Arbortext itself attempts to do – after getting caught in a lie about its existence. The fact is, we never asked about MRO.com. The relationship between Arbortext and MRO has no bearing on Intermarket’s existence or sales.

Is it okay for me to suggest that Plante Moran is not behaving as an “independent auditor” here?

Sheesh. What a rip-off. Obviously, our half of Robinson’s fee was not nearly as equal in significance as was Arbortext’s half. In fact, it seems more that Robinson’s report succeeded in pointing out to Arbortext the problems in their accounting system and record keeping so they could fix them and be more presentable for things like an IPO filing or an Acquisition or a day in court. Which meant Blueberry’s money helped fund a clean up of Arbortext!

Exactly 180% from what we spent our money to obtain.

Well, Mr. Robinson, Blueberry will eventually see this documentation and all the other Working Papers you gathered but somehow managed not to address or investigate and we will discuss your audit report in far greater detail at that time. When it “plays out,” so to speak. In Chapter 45: The Smoking Gun to be precise.

For now, you really put the screws to us, Mr. Mark Robinson. Thanks a whole bunch.

It was interesting to note that Jim Sterken, the mastermind behind the fraudulent books, did not appear on the list of Arbortext personnel that Robinson interviewed. Nor was the Controller and implementer, Cherie Van Allen. She had evidently been replaced as Controller by a Karen Sharplin. Jim Haggarty was still around, and so was Cherie Van Allen’s husband, Senior Systems Analyst Philip Van Allen, who had performed the “logic” of the royalty reporting scheme.

Robinson was not going to be the one who sounded the alarm on a local Michigan business. Not during its time of Acquisition. And the audit we had fought through hell to achieve had turned into just one more outrageous abuse of legal and business ethics. 

Toon time for the two of us. Bartender, make that a quadruple double.

Note:

See Exhibit S for Mark Robinson’s Plante Moran audit report.

To be continued . . .