Dead Solid Pluperfect

A Hot Buttered Guff™ Production

Arbortext Royalty Fraud: Chapter Sixteen

“This Is No Enron”

When Mark Lambert, the Arbortext programmer who worked with me, next inquired about when to expect the source code updates, I informed him that there was a problem with our royalty payments that might cause a delay in providing the code.

This news was dutifully relayed up the Arbortext chain of command and soon Jim Haggarty, the previously mentioned CIO and acting CFO, offered to mediate the situation on behalf of Ray Schiavone, the new CEO who had replaced Jim Sterken. Apparently, Sterken was being removed from the loop. Sure. And a chicken has lips.

And so, in September of 2002, at our suggestion, Haggarty and an Arbortext attorney named Ted Herzog (lawyer number five quietly enters the scene) flew out to California to meet with Mary and I. Kevin Dwan was specifically excluded from attending this confab. His dissatisfaction with this arrangement was communicated loudly and threateningly from Dwan’s attorney, Larry Bernheim, to our attorney, Bill Hansen. These two attorneys, now that we had sued Dwan, were fairly constantly engaged in pre-trial planning and posturing.

We had reserved a conference room at the Mariott Hotel in Walnut Creek for this tete-a-tete. We couldn’t afford this extravagance, but it was necessary to promote the illusion that we were not, in fact, practically dead fish floating atop the deep pond of life. And to avoid having the meeting at an Arbortext facility in the Bay Area, as Haggarty had suggested. We did not make a counter proposal to have the meeting in our garage. A neutral setting made us feel far more comfortable, and alleviated the paranoia that Sterken might be hiding in the ceiling behind a two way mirror, eavesdropping on our every word.

Mary and I got dressed up for the occasion. She wore a black, skirted business suit with a white blouse and I wore the black pin-striped suit I had worn at our wedding, and not too often since. We actually looked like true-blue professional type people. Or true-black, if you want to be picky.

Mary was nervous and excited and very prepared. She even had a briefcase! I was just nervous, throwing up out the driver’s side window on the way to the Mariott.

“Are you all right?” she asked.

“Peachie keeno,” I lied.

We were five minutes late for the nine o’clock meeting. Herzog and Haggarty were already there, pouring themselves some complimentary coffee which was extravagantly concealed in the base price of the room rental. Also complementary was a tray of pastry which could be used for hammering nails at the conclusion of the meeting and in no way was intended for the human digestive system.

Herzog wore a suit, also, but Haggarty was wearing a loud and atrocious Hawaiian shirt with rumpled, casual slacks. What message this was meant to convey was not immediately discernible. I resisted the urge to peer under the table and observe his choice of footwear. What if it was sandals and no socks! Too queasy.

Herzog was a small, mousy character who spent almost the entire day bent over his notes and books, rarely saying anything. Haggarty was portly and had a dead-giveaway forehead that turned beet red whenever he was embarrassed or caught dissembling. His forehead also had a large vein of some kind, near the top of his receding hairline, that pulsed noticeably and somewhat frighteningly during these beet red moments, as though some sort of stroke might be imminent.

Mary took over the meeting from the get-go and pounded away all day with the evidence she had gathered of missing sales, unpaid maintenance and only token overseas royalties, flourishing out sample print-outs from her Internet research that usually triggered the vein throbbing on Haggarty’s forehead. For every lame explanation Haggarty came up with, Mary would sock him back by producing some evidence that refuted it and confirmed that he was, excuse my bluntness, a liar. A whole lot of vein-pulsing moments.

At one point in the day, Haggarty blurted out that “This is no Enron.”

At which remark, Mary and I exchanged brief, but telling, He That Smelt It Dealt It glances.

Haggarty and Herzog did not contribute much. They just listened and took notes, probably to go home and correct information on the web that Mary had located, which Arbortext had done before whenever she brought up a specific example. A classic response to a piece of evidence Mary showed Haggarty concerning a company not reported to us was that it wasn’t a qualifying sale because it was a “scaled up opportunity.”

Opportunity for whom? Not Blueberry. Our technology had been given away for free.

Near the end, Mary asked Haggarty point blank if she found more sales that had not been reported, would it indicate there was a problem with their accounting?

He replied yes. She asked if she found even one, would it be a problem? Yes, he said, that would be a problem. Even one. I suspect his only problem would be coming up with another piece of laughable bafflegab like “scaled up opportunities” to explain the problem away without addressing the central issue that we had been given away for free in violation of the contract. Haggarty had already lost a pound of sweat fabricating responses. One more effort could very well explode that vein on his forehead.

When we broke for lunch, Mary and I went down to the cafeteria, but Haggarty and Herzog did not immediately come down also. As we sat at a table, Mary spent her time reshuffling and sorting her evidence and preparing her presentation for the afternoon.

I tried not to spill anything on my suit. I was considerably relieved by now from my initial trepidation. Mary was handling everything with aplomb and assuredness and did not need any significant verbal input from me. I basically just had to sit there and act composed, smug, amused, offended – the whole body language ensemble that more or less was second nature to me. When you have a fear of public speaking, as I most certainly did, you have to learn how to speak with your arms, elbows, knees, nose, posture, facial expressions, and all the other non-verbal manipulations of your human torso. For some reason, from the first time I was called on in a classroom and onward throughout my entire life, whenever my mouth opened to emit words, my brain immediately shut down and provided no resources for the mouth to utter. Truly pathetic. Thus the need to become adept at body language communication.

At the very end of the lunch break, Haggarty and Herzog scurried into the cafeteria and ordered lunch, which they carried back with them to the conference room. Those two lunches sat next to them for the entire rest of the afternoon – untouched. Haggarty’s was quite close to me and through the clear plastic lid I could see a big, fat, juicy kosher dill pickle just lying there begging to be enthusiastically devoured. I somehow managed to restrain myself from reaching in there, but if Haggarty had made a trip to the bathroom somewhere along the way, I can assure you that pickle would not still have been on his plate when he returned.

Near the end, Haggarty did reluctantly admit, in a classic bit of understatement, that Blueberry had been treated poorly. He did not point out the culprit in this doling out of abuse, but making no explanation for the cause was explanation enough. He assured us that the next royalty report would be a sizeable one, as large corporate customers were poised to purchase E3. He also teased us with news that E3 would be sold in multiple CPU amounts, further increasing our soon to explode royalties.

And he strongly intimated that he was the one in charge now, not Sterken.

But still, it was obviously the old dangling carrot trick.

And equally obvious was our need for the money. For the second time in two years, we had endured six months without any income and we were sliding precariously into debt.

So when the following month’s royalty check came in at nearly $30,000 again, I released the source code update and Mary and I crossed our fingers that Sterken was indeed out of the equation and Jim Haggarty would be a man of his word and see to it that the contract was finally honored. Or at least that the cheating would be with a more scaled down bayonet, for the new report still did not report all sales or adhere to the contract terms.

When the fourth quarter royalty report arrived in late January of 2003, and it was back to the old measly, just above minimum amount, with no maintenance royalties, miniscule overseas royalties, no Intermarket and no adherence to the original contract terms, we knew that life at Arbortext would not change one iota with Jim Haggarty or anybody else. He had performed his duty of lying to us, schmoozing us, and coaxing the source code from us that they needed and it was now back to the business as usual of defrauding Blueberry.

Never again would we trust anything Arbortext said. This was plainly a crooked company with zero ethics, starting at the top with Jim Sterken and working its way down and sideways to who knows how many people.

A Gang of Scoundrels.

And the evidence would only get worse as we set off now down the long, hard road of bringing them to justice.

The first stop on this wild toad ride would be a bit of a detour. To Federal Court in Oakland for the spectacle of Beigel vs Dwan. Case No.: C-02-3116 DLJ.

To be continued . . .

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July 2, 2008 - Posted by | Business, Law, Life, News, Software, Stories, Technology, Writing | , ,

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