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Overstock.com CEO Patrick Byrne Spying on People--Again

Fresh off the heels of a California Judge imposing a $6.8 million judgment against Overstock.com (NASDAQ: OSTK) for false advertising and unlawful business practices, the company is in trouble again. This time a class action complaint alleges that employees of the company cold called the cell phone numbers of prospective customers seeking to sell them insurance, secretly recorded those conversations without their permission, and deceitfully obtained "highly personal and private information." [Download Complaint]

According to the complaint:

Plaintiff alleges that Defendant [Overstock.com] continues to violate Penal Code § 632.7 by impermissibly recording its telephone conversations with California residents while said residents are on cellular telephones.

The complaint further alleges that:

9. On or about March 12, 2014, Plaintiff received a telephonic communication from Defendant on Plaintiff’s cellular telephone. During the conversation, Defendant attempted to solicit Plaintiff’s business for Defendant’s insurance services.
10. After speaking with Defendant’s representative for a period of time, Plaintiff inquired as to whether to phone call was being recorded. Thereafter, Defendant’s representative informed Plaintiff that the entire conversation had been recorded. Subsequently, Plaintiff terminated the call with Defendant’s representative because Plaintiff was angered that Defendant had recorded Plaintiff without Plaintiff’s knowledge and/or consent.
11. During each conversation with Defendant, Plaintiff discussed highly personal and private financial information that Plaintiff had not openly discussed with others.
12. Plaintiff had no reasonable expectation that any of Plaintiff’s cellular telephone conversations with Defendant would be recorded due to the private subject matter being discussed. Had Plaintiff known that said conversation/s were being recorded, Plaintiff would have conducted and spoken differently to the representative/s of Defendant.
13. Plaintiff was shocked to discover that such a confidential communication was being recorded by Defendant without Plaintiff’s knowledge or consent.
14. Plaintiff found Defendant’s clandestine recording to be highly offensive due to the delicacy of the topics discussed during said conversations.
15. The conversations with Plaintiff, was without Plaintiff’s knowledge or consent, recorded by Defendant, causing harm and damage to Plaintiff. Prior to Plaintiff’s query on the matter, plaintiff was never informed that Plaintiff’s cellular telephone calls were being recorded. At no time during the call did Plaintiff give consent for the cellular telephone call to be monitored, recorded and/or eavesdropped upon.
Patrick Byrne

Overstock.com CEO Patrick Byrne has had no issue violating the privacy of whistleblowers, journalists, bloggers and critics in its pretexting and smear campaign of recent years, which have been amply documented in the media and this blog. Overstock and its surrogates, such as its public relations spokesman Judd Bagley, have even waged war against their spouses families - their minor children included.

Iran used identical, illegal tactics to spy on American officials according to a Reuters report out today. It reported that Iranian hackers engaged in "an unprecedented, three-year cyber espionage campaign, Iranian hackers created false social networking accounts and a fake news website to spy on military and political leaders in the United States, Israel and other countries, a cyber intelligence firm said on Thursday."

Overstock.com CEO Patrick Byrne was years ahead of the Iranians in hiring thugs like Judd Bagley to set up phony news sites like Deep Capture and Anti-Social Media which were used to spread his delusional conspiracy theories and attack critics. Judd Bagley created fake social networking accounts on Facebook and stock market chat boards to intimidate, threaten, and harass critics. To add insult to injury, Law 360 reported that, “Judd Bagley, a representative for Overstock.com, said the company is investigating the claim, but believes that it lacks merit.”

Back in 2007, investigative journalist Roddy Boyd from the New York Post reported that Overstock.com CEO hired Judd Bagley to secretly stalk and conduct a smear campaign against critics on the web. Bagley used anonymous aliases on stock chat boards to attack critics of Byrne. He hacked into the accounts of stock chat board posters and implanted spyware in emails to improperly gain personal information on critics. He attempted to blackmail a tech savvy blogger who exposed his activities. John Carney from Dealbreaker referred to Judd Bagley as "Sleazy McSleaze."

Two years later, Patrick Byrne used his hired thug Judd Bagley to pretext journalists and critics (including me) to gather information about their family members (including minor children) and friends by setting up a phony profile on Facebook under the name Larry Bergman.

In 2009, I identified certain violations of Generally Accepted Accounting Principles (GAAP) by Overstock.com that allowed it to fabricate a Q4 2008 profit rather than properly report a loss in that quarter. Patrick Byrne retaliated by personally attacking me on a stock market chat board, during various earnings calls, and in the press in an effort to discredit me. The company stubbornly continued to overstate its reported income in the first three quarters of 2009. During that time, Bagley injected himself into my divorce proceedings, contacting my former spouse, as well as using illegal pretexting tactics to "friend" my children and relatives on Facebook using a phony account. This was clear retaliation for my pointing out the company's accounting violations. My work was vindicated when Overstock.com restated its financial reports after the Securities and Exchange Commission investigated its improper accounting practices.
Judd Bagley

Journalist and author Gary Weiss who uncovered the pretexting scheme reported that:

Bagley created "Larry Bergman" and an unknown number of phony Facebook accounts to con people into "friending" him. That way he could circumvent Facebook security, violating their rules and, well, Lord knows how many laws he broke in this pretexting scheme.

After learning that he and his family members were pretexted, Attorney/Money Manager/Author Barry Ritholtz wrote:

A career douche bag (and possible pedarast) named Judd Bagley decided to engage in some fraudulent pretexting. He assumed a false persona on Facebook, using someone else’s name and photo (perhaps committing a Felony in NYS). He then began cyber-stalking the children, friends and family of numerous journalists, bloggers and fund managers. After friending all the kiddies, Bagley posted their names, friends, etc. at the Deep Capture site.

Eventually, Facebook (NASDAQ: FB) booted Bagley for violating its rules. It deleted both his false "Larry Bergman" profile and his personal profile. He's since resurfaced on Facebook by adding a number to his username.

It's three and half years later, and Overstock is still up to its old tricks, now violating customer privacy. When will regulators finally step in and put a stop to these hoodlums? Consumers are cautioned against trusting these crooks with their personal information.

Written by,

Sam E. Antar

Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could. If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today. I do not want or seek forgiveness for my vicious crimes from my victims. My past sins are unforgivable.

There is a saying, "It takes one to know one." I've provided professional work for the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify fraud and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. In addition, I teach white-collar crime classes for various government entities, professional organizations, businesses, and colleges and universities.

I do not own any Overstock.com securities long or short.

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