Phone.com, LLC and Escom, LLC settle case against Sovereign Bank for $300,000.
What do Phone.com, Consultants.com, and Relationship.com have in common? Yes, they are valuable internet real estate. But they are also at the center of an alleged $500,000 heist during 2007-2008.
And, like any case involving domains and theft, Sex.com was also involved.
The Players
In February 2007, Internet Real Estate Group hired Christopher Britt for bookkeeping and controller activities. He left the company in December 2007 but continued to provide bookkeeping services to IREG and associated companies through his firm Priviley, LLC. During this period, the plaintiffs allege that Britt managed to steal over $500,000 from them.
In total, six different companies in some way connected to IREG or its principals initially claimed losses, including IREG, Phone.com LLC (formed with Mike Mann), Consultants.com LLC, Love Tactics LLC, Relationship.com LLC, and an outfit called Escom LLC. Escom, of course, is the entity formed to purchase and operate Sex.com, which is currently in bankruptcy proceedings.
The Heist
According the the plaintiffs, Britt used several schemes to steal from the companies. He deposited a number of checks made out to the plaintiffs into Priviley’s accounts and wrote checks to Priviley using forged signatures. He also completely closed out Escom, LLC’s accounts and managed to deposit the resulting check into his account.
The suit alleged that Britt went into a Sovereign branch on March 4, 2008 and closed out Escom’s checking account, transferring all of the money to Escom’s money market account. On the same day, Britt closed out the money market account and was presented with a Sovereign “Official Check” in the amount of $304,849.62 made out to Escom.
The next day, Britt tried to deposit the Sovereign check made out to Escom into a Priviley bank account even though the check wasn’t endorsed. The bank’s fraud system flagged the check after it was accepted, and the bank notified Britt that it would need a “Confirmation of Endorsement Form” signed by one of Escom’s signatories in order to deposit the check.
According to Sovereign Bank, Britt was authorized to close the Escom account. Sovereign claims that IREG co-founders Andrew Miller and Peter Hubshman had decided to transfer the financial responsibilities for Escom to another entity “As part of their general effort to distance themselves from the operation of Escom”. But Britt was supposed to close out the accounts and transfer the money to a new financial firm, and of course not to Priviley.
The plaintiffs allege that Britt returned with a document he said was signed by Hubshman, but that terms on the form were altered with white-out and that it was then improperly notarized by a Sovereign Bank employee without Hubshman being present.
Although Escom experienced the greatest loss from Britt’s alleged actions, other companies also claimed considerable losses.
For example, A $150,000 investment check from a California trust to Phone.com LLC was deposited into a Priviley account. (Sovereign Bank claims Britt opened and had signing authority on the Phone.com account. Britt was able to endorse the check in Phone.com’s name and then make it payable to Priviley, the bank claims. The plaintiffs argued some of the signatures on the Phone.com account were forged.) Consultants.com, LLC claimed that five checks totaling $40,500 were made out to Priviley using forged signatures of Miller and Hubshman.
Going After the Bank
The plaintiffs blamed the bank for allowing the activity and filed a claim with the bank, asking for $500,961.62 to be returned to Escom, Phone.com, and Consultants.com. Shortly thereafter, the bank froze accounts associated with 19 companies connected to Andrew Miller including Chocolate.com, LLC, Patents.com, LLC, and even IREG. In addition, the bank canceled IREG’s $50,000 line of credit.
The plaintiffs sued the bank in October 2008 for the lost money, treble damages, and legal fees. Over time, the plaintiff list was whittled down to just Phone.com and Escom. On March 1, 2010, the court was advised of a settlement. Although the settlement wasn’t made public by the court, it did appear in a recent document filed in Escom, LLC’s bankruptcy case.
A written consent of the non-founder members of Escom, LLC — signed by a representative of I-95 Investment Group, LLC — discloses that Sovereign Bank agreed to pay $300,000 to the plaintiffs. $60,000 of it will be used to pay legal bills, $158,400 will be paid to Escom’s President Del Anthony Polikretis in his personal capacity, and $81,600 will be paid to Phone.com.
The case kind of makes you wonder — how many more people will try to steal from Sex.com?
Donv says
“And, like any case involving domains and theft, Sex.com was also involved.”
Finally, Andrew wrote a funny line.
Josh says
Pretty bold of that guy to do. Mine as well robbed a bank with no mask…no wait that would result in jail time.
Tim says
What happened to Britt?
Is he now sitting in the Caymans, Thailand, or Fiji ?
This also tells me that if you ever have a real beef with a bank, move your other accounts first then complain. 🙂