International Men Of Mystery: How Discredited German 'Anti-Piracy' Company May Secretly Be Behind Malibu Media's Copyright Trollery

from the well,-look-at-that dept

Things have been getting more interesting on the Malibu Media front lately. The company, which is responsible for 40% of all copyright cases, has certainly faced claims of abusive and seriously questionable practices. But some new information suggests it goes much further down the rabbit hole of questionableness. Like Righthaven and Prenda before it, new accusations are coming out about some highly questionable shell games to try to hide what's really going on.

In this case, it's come out that behind all of Malibu Media's shady tactics, the folks actually pulling the strings (or, at least, heavily involved) may be the German company Guardaley, or one of its many sneaky shell companies. If you've been following copyright trolls for a while, you may recognize Guardaley as the shady company involved (secretly) in some of the original copyright trollery in the US, which was slammed in court for highly questionable technology that was at the center of its attempts to "identify" people to go after in the shakedown scam known as copyright trolling.

Guardaley had been laying low for a while, but back in April, Sophisticated Jane Doe over at FightCopyrightTrolls turned up Guardaley's secret playbook, which was clearly not meant for public consumption. It is... quite a read. It highlights the various shell games and individuals involved -- and also notes how Guardaley can quickly churn out cookie cutter legal filings against the various individuals it "sues" (with the entire effort actually focused on getting people to pay them to go away). And, astoundingly, it basically admits that Guardaley will supply bogus "experts" to support the claims in court. From page 35 of the presentation:
Okay, now jump back to January, in which one of the lawyers representing Malibu Media admitted that the "expert" company it uses, IPP (a Guardaley shell) worked "pursuant to an oral contingency fee." In other words, it was getting a cut of any money secured via these lawsuits and corresponding shakedowns. That's kind of a big deal: when your "expert witness" has a direct financial stake in the outcome, that means your expert witness is doing something very, very shady. No wonder Guardaley doesn't want the judges to question them too much.

For the past few months there had been some ongoing efforts to get various Malibu Media lawyers to reveal the details of their relationship with Guardaley/IPP and other related shells. Not surprisingly, Malibu Media lawyers are trying to block all of that. This finally resulted in an impressive filing from copyright troll fighter, lawyer Morgan Pietz, who accuses the company of champerty -- a scheme to "buy into" lawsuits, something that is at the very least frowned upon, but more frequently against the law. Furthermore, Pietz notes that Malibu Media should have been proactively disclosing Guardaley's interest in the cases, but has not -- instead highlighting how the company (actually, its lawyers) has been "fighting tooth and nail all attempts by defendants to inquire about these arrangements." He even calls Guardaley "the German computer guys."

Separately, the filing dismantles Malibu's bizarre attempt to avoid this whole issue by blaming it on some other guy in Florida.
Malibu concedes that it did [disclose this information] here, and counsel on the pleadings here in Maryland concludes that there could not possibly be any kind of breach of this duty because lead national counsel in Miami, not counsel here, negotiated the improper witness contingency agreement. Regardless of what local counsel here did or did not know, lead counsel in Miami, whose firm presumably authored the early discovery papers in the first instance, and who participated in the consolidated proceedings in this district before Judges Titus and Grimm, had a duty to make sure this fact was disclosed to the Courts here and across the country.
The filing then goes into significant detail about the whole mess, under the wonderful title:
International Men Of Mystery: Tobias Fieser, Michael Patzer, Daniel Macek, Patrick Achache, Guardaley & The Shell Companies, And The Software With A Name Nobody Seems To Know
The "software with a name nobody seems to know" involves constantly changing claims about what software is being used to identify people accused of infringement, along with the claims that this unnamed and ever-changing software is somehow infallible (despite Guardaley's tech being so discredited previously). In an amusing section, Pietz points out how quite clearly "fallible" the technology is:
In the letter Malibu submitted to Judge Titus and Judge Grim last year, they argued that IPP’s proprietary software was literally “infallible.” ... In the opposition to the instant motion, Malibu submits a declaration from Michael Patzer where he avers that “the PCAPs recorded the IP address 76.100.228 [sic] infringing Plaintiff’s copyrights.” That is incorrect. Mr. Patzer left out three digits in that IP address. This simply goes to show that no matter how “infallible” Malibu and Patzer think the software and corresponding proprietary system they designed may be, there is always room for human error, at either the input stage, or the output stage.
The filing highlights the similarities of these shell companies with the recent ruling against Prenda, and highlights increasing evidence of how the people above are really deeply involved in a bunch of shell games. It calls out evidence in a non-Malibu Media case, Elf-Man LLC v. Lamberson, which lays out more evidence of an incredible circle of shell companies. I won't repost it here, but it's worth reading, just to see some of the crazy chain of shell companies. This is not the whole chain of crazy, but just a snippet:
As the defendant’s own investigation revealed in Elf-Man, Crystal Bay Corporation, the company Macek (and Patzer?) supposedly “worked for” ... was a defunct South Dakota corporation, apparently incorporated in 2012 by a disbarred lawyer who, according to his website, “now specializes in creating ‘anonymous’ ‘shelf’ corporations.” .... The official address Crystal Bay Corporation registered with the South Dakota Secretary of State? It belongs to a mail forwarding company, and it is the same address given for the disbarred lawyer’s “Agent Services” company.... Same thing with the Stuttgart, Germany address given for Patzer and Macek: it corresponds to an office building in Stuttgart “that offers mail drop services and short term office rents, even by the hour.” ... The Elf-Man defendant also investigated the phone numbers given for Patzer and Macek. The regional code for Macek’s number corresponded to Karlsruhe, Germany. The regional code for Patzer was for a suburb of Karlsruhe....

The coup de grace from Elf-Man: when defense counsel there recently called the (Karlsruhe) phone number given for Macek in the initial disclosures in that case, the person on the other end of the line answered it “Guardaley.”
Boom. Also, there's the part in which one of the guys admits he works for one of these shell companies and then has to be lead by Malibu Media's lawyer into saying he didn't actually work for the company:
More importantly, the testimony Malibu complains Pietz omitted only further supports the argument that Guardaley = IPP = Excipio, and that Patzer, Fieser, and Macek are all part of the same organization. For starters, at the beginning of Patzer’s testimony, he first says “yes” when asked if he works at IPP Limited.... Malibu’s counsel then asks him a leading question, reminding him that “you don’t actually work for IPP, Limited. You said you work for a firm that provides these services to IPP, Limted, correct?” and Patzer confirms that.... However, throughout Patzer’s testimony, he constantly refers to “we” when it is clear he is referring to IPP. None of that suggests that Excipio is really a totally different company that should be credited as possibly more trustworthy than Guardaley; it suggests Patzer thinks of himself as working with Fieser at IPP.
And, of course, days after this was filed, the lawyer who had been representing the copyright holders in Elf-Man, Maureen VanderMay, suddenly filed a motion to withdraw as counsel, noting that "issues have arisen between Plaintiff's representative and counsel, the nature of which make it impossible for counsel to both continue with representation and comply with the governing rules of professional conduct." However, she refuses to detail those reasons, citing their "privileged and confidential nature," though says that if required to, she would like to do so under seal. It's not too difficult to put two and two together here, suggesting the likely issue is that VanderMay realized how much trouble everyone involved in this scheme may be in soon. And, anyone who witnessed both the Righthaven and Prenda debacles knows that random outside lawyers who help out are the first ones often thrown under the bus in these disputes.

There have been stories for quite some time suggesting Malibu Media was, in some ways, worse than Prenda. Now, it appears that it may have been Guardaley and its rotating crew of shell companies behind all of this all along -- something they'd mostly been able to keep quiet. However, it looks like the scheme may be starting to unravel. Now, we just need Pietz to put together one of his infamous org charts like he did with Prenda.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    DannyB (profile), Jun 4th, 2014 @ 10:21am

    Do Copyright Maximalism and Shady Tactics mix?

    Do Copyright Maximalism and Shady Tactics mix?

    Like politics and corruption.
    Like corruption and lobbying.
    Like lobbying and copyright maximalism.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Anonymous Coward, Jun 4th, 2014 @ 10:24am

    It's a great find. I'm wondering if Popehat will jump on this.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    S. T. Stone, Jun 4th, 2014 @ 10:25am

    Huh.

    Never thought I’d see the day when a German institution would try to screw people out of their civil liberties.

     

    reply to this | link to this | view in thread ]

  4.  
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    Mason Wheeler (profile), Jun 4th, 2014 @ 10:28am

    OK, that's kind of awesome. Now if someone could just do that to Apple...

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Jun 4th, 2014 @ 10:37am

     

    reply to this | link to this | view in thread ]

  6.  
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    DannyB (profile), Jun 4th, 2014 @ 10:43am

    The best quote of all

    "issues have arisen between Plaintiff's representative and counsel, the nature of which make it impossible for counsel to both continue with representation and comply with the governing rules of professional conduct."


    So what basically is the lawyer saying about the Plaintiff he represents?

     

    reply to this | link to this | view in thread ]

  7.  
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    DannyB (profile), Jun 4th, 2014 @ 10:44am

    Re: The best quote of all

    Sorry: she, not he

     

    reply to this | link to this | view in thread ]

  8.  
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    That One Guy (profile), Jun 4th, 2014 @ 10:59am

    Re: The best quote of all

    From my understanding, that's basically saying 'The only way I could continue to work for these people is if I was willing to accept breaking a lot of rules and guidelines pertaining to the legal profession.'

    Which doesn't exactly speak well of her 'employer', to put it mildly.

     

    reply to this | link to this | view in thread ]

  9.  
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    sophisticatedjanedoe (profile), Jun 4th, 2014 @ 11:07am

    Re: Re: The best quote of all

    ...and then she refers the case to another copyright troll, Carl Crowell, implicitly saying that he is not governed by the rules of professional conduct.

    Which is not surprising, giving that this guy recently tried to pull the Prenda by filing a state court lawsuit making a trademark infringement claim in a clearly copyright case, an action beyond frivolous by a large margin.

     

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  10.  
    identicon
    Anonymous Coward, Jun 4th, 2014 @ 11:22am

    Re:

    you ARE being sarcastic? right?

     

    reply to this | link to this | view in thread ]

  11.  
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    Anon E. Mous (profile), Jun 4th, 2014 @ 11:24am

    So Lipscomb and Malibu say the “oral contingency” agreement was in place but was terminated when it accidentally became public during a case, but yet had sued how many people when it was still in effect? Why was the “oral contingency” only terminated after it became known?

    Malibu and Lipscomb say that the “oral contingency” agreement only paid a fee for the information. If this is the case why did they race to terminate the “oral contingency” so quickly once it became known, seems a little odd doesn’t it?

    Color me a tad skeptical here, but has anyone known a lawyer to not have documents drawn up and signed by all parties in regards to transactions between a client and an entity it is doing business with? I have never seen a lawyer stand up and say “no need to get a written agreement signed spelling out payment and what the terms are and when the funds are due” “a simple handshake will suffice even though your both in different countries”. Yeah right.

    Sorry but that should raise the red flag to a judge that has heard or is hearing a Malibu case. One thing every Lawyer is taught is everything needs to be in writing when dealing with clients and those they do business with as their legal representative. What law firm would launch a suit without seeing any signed agreements that covers their ass. None.

    The mere fact that this “oral contingency” was terminated when it became known was a huge flag for the defense and it should be for the Judge as well.

    The Judge should be demanding that IPP/Guardley bring forth a senior company official and Malibu bring a senior principal to court to tell the Judge why this agreement was changed mid stream in the middle of a lawsuit brought forth with evidence provided by IPP/Guardley to initiate this lawsuit and why Malibu, the Plaintiff attorney and IPP/Guardley and it’s evidence shouldn’t be allowed and all three of the aforementioned parties shouldn’t be sanctioned. Lipscomb/Malibu can not use the Sgt. Schultz defense and say ” I see nothing, I hear nothing”

    I won’t even begin how Malibu who loves to say “we will bring anyone to court to testify in these cases to prove our findings and testify to the alleged infringement of a copyrighted work” but yet seems loathe to do that very thing.

    The fact that the Excipio hand book seem to lay out how these cases are presented and who to go after was very telling and one looks at these and other troll cases and the similarities to how the litigation starts and how it flows is quite similar to how the litigation is taking place .

    The one thing I found troubling with the Excipio handbook, is that they lay out how these cases start, what documents to file with the court, how settlement letters are to be written, how to deal with those that fight the lawsuit and how to handle the defense lawyers. That to me screams of collusion ( my opinion) between the Plaintiff and the witness and the plaintiff’s attorney. If this happened in a criminal case you would be up you know where without a paddle

    In my opinion you have the monitoring firm playing witness, playing law firm, and playing detective submitting evidence and affidavits in the course to get the legal action and directing it as it goes. There is a whole lot wrong with that in my opinion and the poor ISP subscriber is going up against what I would term is a stacked deck.

    A Judge would have to be willfully blind to not get a sense that there is some serious issues’s with these cases and and to ignore them would be a travesty not only to the defendant but to the court and the rule of law itself.

     

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  12.  
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    Anon E. Mous (profile), Jun 4th, 2014 @ 11:25am

    Re:

    The other issue that I have with this is that if you go by what is in the Excipio handbook is that when the Judge grants the order to allow the lawyer to get the ISP subscriber information that the information is then turned over to IPP/Guardley/Excipio and they take the ISP subscriber information, they disseminate it and choose who to pursue for settlement and it is retained in their database.

    I highly doubt that a Judge who granted an order for the ISP subscriber information to the Plaintiff’s attorney knows that this information is being turned over to a third part in another country that has provided evidence in the case at hand and is a witness in the very same case and that it was Plaintiff’s law firm that turned the information over. This fact should be making a Judge’s head spin and bring forth a little wrath in my opinion.

    I would have to believe that the Judge would have an issue with the fact that all those ISP’s subscriber’s information that was gathered from the order issued to the ISP’s by the court was turned over to a 3rd party in another country without the courts knowledge and was being retained by that same 3rd party for future use.

    Not only is that a violation of privacy laws IMHO but I would have to be of the belief that was way beyond the scope of the order the Judge issued. In essence you would have to assume the Judge would have been under the impression it was the law firm who would be dealing with the ISP subscriber information gleaned from the the courts order and the lawyer’s law firm would be going over that ISP subscriber information to see who infringed what work and in notifying the said ISP subscriber that their IP address was downloading a copy of their clients work in violation of copyright law.

    The Excipio handbook states that they will disseminate the ISP subscriber information and see who to sue and not to sue and drafting of settlement letters and dealing with the alleged infringers in regards to settlements. Once again if this doesn’t raise a brow with a Judge I would be surprised.

    As far as Lipscomb’s claim that the oral fee contingency argument isn’t their fault, I give that some serious side eye. They have a duty as a lawyer and as an officer of the court to submit documents they know are true and of fact and are pertinent to the case at hand and it is also their duty as an officer of the court to bring forthwith any concerns with their clients case where there is any affidavits, evidence and witnesses whose information may have been in conflict with the rules of court and standards of the ABA that counsel is governed by.

    In recent light of the the appellate courts decision which I see as a rebuke of the order handed down by Judge Beryl A. Howell ( and we all know what a travesty that was ) I seriously hope that it will shine more of a light of scrutiny on these copyright troll lawsuits which are nothing more than a cash grab in my opinion.

    If Lipscomb and Malibu aren’t worried about the coming storm, then they seriously misguided. Pietz and the other defense counsels fighting Mailbu and other trolls are certainly not going to just take the trolls at their word that the IPP/Guardley/Excipio is all well and good and there is nothing to see here and they should just move along.

    The Trolls are finding out what formidable defendants and their counsel can do in these case. John Steele thought he and Paul Hansmeier were too smart to have their litigation machine shut down, and look what happened to them. Even when Steele and Hansmeier have tried other forms to achieve settlement cash they have had the bright light shone upon them. Hell I am not even sure they could chase ambulances without someone fact checking anything they file concerning a lawsuit.

    We may just be witness to another copyright trolls litigation come to a much earlier death than planned and sooner than than the troll imagined.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Jun 4th, 2014 @ 11:27am

    Re: Re: Re: The best quote of all

    IIRC, "pulling the Prenda" is frowned upon by both the Church and State.

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Anonymous Coward, Jun 4th, 2014 @ 12:18pm

    Re: Re: Re: Re: The best quote of all

    I thought that was 'Pulling the Prenda Benda'?

     

    reply to this | link to this | view in thread ]

  15.  
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    WDS (profile), Jun 4th, 2014 @ 12:47pm

    What is nice about these cases vs. Prenda is that there is a real company with real assets available for the victims to go after. That is something I bet wasn't in Colette's plan.

     

    reply to this | link to this | view in thread ]

  16.  
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    Josh in CharlotteNC (profile), Jun 4th, 2014 @ 1:01pm

    Re:

    Lawyers are probably boarding planes from Germany to Switzerland with bags of money now that the tech media have picked this up.

     

    reply to this | link to this | view in thread ]

  17.  
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    WDS (profile), Jun 4th, 2014 @ 1:24pm

    Re: Re:

    I was thinking more of getting on a plane in Malibu with bags of money heading to the Caymans.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Zonker, Jun 4th, 2014 @ 2:04pm

    Re: Re:

    Even when Steele and Hansmeier have tried other forms to achieve settlement cash they have had the bright light shone upon them. Hell I am not even sure they could chase ambulances without someone fact checking anything they file concerning a lawsuit.
    Steele jumps out from behind the bushes wearing a ski mask, kneecaps a jogger passing by, and then runs off, but not before dropping an envelope with his sister's address on it. He shows up later at the hospital claiming that he knows who did it and reveals a confession signed by someone named "Alan Cooper". Steele insists he can get the victim millions suing this "Alan Cooper" fellow if they just pay him a small $100,000 fee to take the case.

    Steele wonders where his carefully laid plans went wrong as he is handcuffed and escorted to prison.

     

    reply to this | link to this | view in thread ]

  19.  
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    That Anonymous Coward (profile), Jun 4th, 2014 @ 6:25pm

    I do hope the Judge denies VanderMay's motion.
    You failed to do due diligence at the start, you cashed the checks, you put your name on documents you suddenly no longer feel good about... to fucking bad.
    You are riding this ride to the event horizon, you have no exit.
    I suggest you work out how to sell out your masters, and pray that you can recover what might be left of your career.

    Despite the LONG string of locals left holding the bag across the country, we still have these lawyers signing up with the devil. It is amazing how many lawyers seem to think that they are magically different and aren't going to be burned at the stake in these things like all those before them.

    You have this spiffy law degree and years of training.
    We have Google and the web and we beat you at every freaking turn.
    An entire legal system dumber than some kids on the internet, maybe we have systemic problems.

     

    reply to this | link to this | view in thread ]

  20.  
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    sophisticatedjanedoe (profile), Jun 4th, 2014 @ 8:39pm

    If you read the Pietz's declaration linked above, and felt its power, you should read today's Lipscomb's response.

    tl;dr: Pietz' declaration should be striken because it was made prior to discovery, which we would stonewall anyway.

    These guys are shitless scared: believe me, I can feel it nearly physically.

     

    reply to this | link to this | view in thread ]

  21.  
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    That One Guy (profile), Jun 4th, 2014 @ 9:57pm

    Re:

    It is amazing how many lawyers seem to think that they are magically different and aren't going to be burned at the stake in these things like all those before them.

    Nothing 'amazing' about it unfortunately, the reward far outweighs the risk for those that eager to sell out the profession and destroy what little respect people might have otherwise had for it.

    Consider: How many of the lawyers involved have had their license to practice law revoked? How many of them have been fined more than they made from the shakedowns? Hell, how many of them have gotten more than a legal slap on the wrist, even after getting caught?

    The potential rewards for extortion schemes(legally sanctioned and enforced ones at that, just add 'copyright' and a gullible and/or tech ignorant judge) like this are enormous, and you have to screw up on a truly epic scale to even be noticed, so it's hardly 'amazing' at all that so many lawyers are so eager to join in. Disgusting to be sure, but not amazing or surprising.

     

    reply to this | link to this | view in thread ]

  22.  
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    That One Guy (profile), Jun 4th, 2014 @ 10:00pm

    Re:

    Or in other words, 'We would have ignored it, so you should too'?

    Yeah, if that's the best they've got in response it sounds like they're pretty desperate for an excuse, any excuse, they can use to stall or deflect with.

     

    reply to this | link to this | view in thread ]

  23.  
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    That Anonymous Coward (profile), Jun 4th, 2014 @ 11:14pm

    Re: Re:

    Oh I have a feeling that the punishment will need to come from the people once again.
    I think once it is finally laid bare, that all of the victims will want their pound of flesh.
    I think that state bars will be pushed to having no choice but to levy serious sanctions, and these lawyers will forever be tied to the horrors and abuse of the law they have wrought.

    It might be death by a thousand cuts, but they will add up.

     

    reply to this | link to this | view in thread ]

  24.  
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    That One Guy (profile), Jun 5th, 2014 @ 3:24am

    Re: Re: Re:

    Yeah, if it's going to happen, and I certainly hope it does, it's almost certainly going to be due almost entirely to the actions of the public, not the 'professionals'.

    Probably the most feasible punishment/deterrent I can think of, one that wouldn't require the state bars to actually do something to reign in the lawyers making their entire profession look bad, which they are obviously loathe to do, is basically the last one you mentioned.

    To make their names so visibly tied to their past actions, to make their reputations so toxic, that no reputable company will dare hire them for fear of being tainted by association, and no judge will be willing to give them the benefit of the doubt for any claim they make, forcing them to provide rock-solid evidence for any claim make, every piece of evidence they present.

    With no-one willing to work with or hire them, no companies or would-be-patsies willing to be involved with them, and no judge willing to 'play along' and just give them what they are demanding, all those fancy legal degrees, those nice framed diplomas that they spent so much time and money getting, all of them will be reduced to nothing more than useless scraps of paper, something that, while not nearly enough to equal the suffering they've caused, would at least be a decent start.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Anonymous Coward, Jun 5th, 2014 @ 4:20am

    Another thign that is secretly run by the nazis.
    The CIA is among them too, in case someone doesnt know yet...

     

    reply to this | link to this | view in thread ]

  26.  
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    That Anonymous Coward (profile), Jun 6th, 2014 @ 6:59pm

    Re: Re: Re: Re:

    I think it becomes impossible for a state bar to ignore 1000 complaints.
    I think it becomes impossible for courts to ignore mounting losses in civil cases showing malfeasance.
    I think they have no reputations now, and think they can just wave their hand at claims from "bad people" just out to get them.

    I wish we could fund a fund to help targets get justice and some peace of mind back. I'm willing to bet many would pay a portion of their compensation forward to help the next Doe, and be happy if the leftover was used to highlight how abusive this law became and how it needs to change. There are so many people who were attacked with these schemes, they need to know they are not alone.

     

    reply to this | link to this | view in thread ]

  27.  
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    Stoatwblr (profile), Jan 6th, 2015 @ 11:54am

    Bogus registered address

    It's worth noting that the company registered address given for Guardaley is a "virtual office" provided by CloudBuy

    http://cloudbuy.com/office-locations.html

    To the best of my knowledge, this is not legal under UK company law (nor is using a Mailboxes, etc or similar dropbox).

    It would be worthwhile getting some input from the UK's registrar of companies on the matter.

     

    reply to this | link to this | view in thread ]


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