Filing Bogus Lawsuits As Part Of A 'Reputation Management' Strategy Costs Firm $71,000

from the making-the-internet-worse-by-making-the-judicial-system-worse dept

Because abusing the DMCA process only goes so far, some reputation management entities have begun exploiting an inattentive legal system to push lawsuits past judges. In some cases, these suits have featured fake plaintiffs filing bogus libel lawsuits against fake defendants and using a fake affidavit to fraudulently obtain court orders requiring Google to delist URLs.

Those engaged in this fraudulent behavior aren't likely to get away with it for much longer. Paul Alan Levy and Eugene Volokh managed to track down the person behind one set of bogus lawsuits and get the presiding judge to take a closer look at the bogus documents he was being handed. Pissed Consumer has also been reporting on others using the same MO, and has headed to court to get these suits examined and tossed.

The end of line for supposed reputation manager Richart Ruddie came at the hands of Volokh and Levy, with the judge granting discovery to the defendant after being apprised of the apparently fraudulent filings. Now that Richart Ruddie of Profile Defenders has been exposed, it looks as though he's given up the fight. Levy reports Ruddie has settled anti-SLAPP claims brought against him and is paying restitution for his reputation mismanagement.

The deal has now been signed, the $71,000 settlement sum has been paid in full, and the settlement agreement filed with the court along with a proposed order under which the Judge Smith would retain jurisdiction to enforce Ruddie’s obligation to move to get the fraudulent state court orders lifted, as well as to ensure that the former customers (that is to say, Smith, Rescue One Financial, and Financial Rescue) cooperate in Ruddie’s efforts in that regard. Their cooperation will likely be needed because they, not Ruddie, were the plaintiffs in the state-court litigation and hence the motions to lift the orders will have to be made in the names of those parties companies. It appears at the moment that the threat of being dragged back into the Rhode Island anti-SLAPP litigation has been sufficient to induce the companies and Smith to allow counsel retained by Ruddie to proceed in their names to get the fraudulent order lifted.

While that helps the defendant and partially takes care of Ruddie's liability (not to mention acts as a deterrent against future efforts of this sort), it doesn't do much to deter the other parties listed, who apparently knew Ruddie's courtroom efforts were shady and may have been fully complicit in the fraud. This settlement leaves them pretty much unscathed. There's still the possibility more fees are on their way from others involved in Ruddie's black hat SEO BS. But for now, it's all in Ruddie's name.

Levy's post provides a ton of background info behind the settlement he just collected, including this wonderful paragraph, in which an opposing lawyer claims Levy has an "ethical" obligation to put the opposition's interests ahead of his own.

Apparently, Hirschhorn [attorney for Richart Ruddie representing him for a criminal investigation brought by the state at the request of Judge Smith] was sharing some of the details of our negotiations, because when Rescue One [Ruddie's SEO client] lawyer Michael Mallow learned that I was still pursuing his client’s liability for an anti-SLAPP violation, he hit the roof. He demanded that I call him and, when I did, he began yelling into the telephone that it was my ethical responsibility to reach a complete settlement with Ruddie so that his client would not have to produce any documents. He brought Hirschhorn into the call and demanded that I give Hirschhorn a settlement number that included claims against his clients as well as Ruddie. When I explained that I did not have any basis to set a proposed compensatory damages figure because I had not completed a sufficient analysis to specify a number that I felt I could defend in litigation, Mallow said that this didn’t matter and that I should just make up a number so that there could be a settlement. Hirschhorn indicated that he would take a specific number with that disclaimer; when I articulated a number that was considerably higher than what Hirschhorn said he could get from his client, Mallow told me that it was possible that his own client might contribute to the settlement, but “if that happens you will never know.” That is, the deal would be structured to give his client deniability of any responsibility for the fraud.

The whole post by Levy is amazing and should be read in its entirety to get a better grasp on the cast of characters in this courtroom charade. It initially appeared as though Ruddie's reputation management scheme consisted of filing bogus lawsuits without his SEO clients' knowledge. That no longer appears to be the case. At least a couple of his clients appear to have known exactly how this was being handled and had zero problem with participating in Ruddie's fraudulent filings. The settlement may be an attempt to staunch Ruddie's bleeding, but it's pretty difficult to pitch reputation management services when yours is swirling the drain.


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  • icon
    TechDescartes (profile), 21 Mar 2017 @ 9:38am

    Acronyms for Reputation Managers

    Skipping
    Ethical
    Obligations

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

  • icon
    That One Guy (profile), 21 Mar 2017 @ 9:49am

    Stop looking behind the curtain!

    The fact that the other lawyer was so desperate to stop any more digging into the matter makes me hope that they dig even harder. If they're so insistent that the matter be settled now, without any more in-depth investigation into the matter it has me thinking that there is indeed likely a smoking gun or two and they don't want the court to find it.

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

  • identicon
    Anonymous Coward, 21 Mar 2017 @ 10:15am

    "Filing Bogus Lawsuits As Part Of A 'Reputation Management' Strategy Costs Firm" its reputation.

    There, FTFY

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

  • identicon
    Anonymous Coward, 21 Mar 2017 @ 10:59am

    I've actually heard radio advertisements for Profile Defenders. Even the ad sounds shady with their "patented method." Though I get how their client may not be informed of sober of the actions.

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

  • identicon
    Anonymous Coward, 21 Mar 2017 @ 11:16am

    Make up a number

    I should just make up a number so that there could be a settlement.

    Although perhaps ill-advised, my first thought on getting that instruction would be to quote Dr. Evil (odd emphasis and all).

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

    • icon
      That One Guy (profile), 21 Mar 2017 @ 11:43am

      Re: Make up a number

      Mallow said that this didn’t matter and that I should just make up a number so that there could be a settlement.

      "One hundred... meeleon dollars."

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

  • identicon
    Anonymous Coward, 21 Mar 2017 @ 11:20am

    I am always just amazed anyone was stupid enough to have thought this was a good idea. It is something you could maybe do once or twice, but building a company that relies on fraud... and not just any fraud but fraud in a courtroom. Anyone with a brain should have realized that it was only a matter of time before a judge found out, and most judges seem to get really really pissed when they find out people lied to them. Especially if as in this case, it makes the judge look bad.

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

  • identicon
    Anonymous Coward You Say?, 21 Mar 2017 @ 3:48pm

    Paul Levy is a scammer?

    Perhaps Paul Levy is the scammer here? This is far too one sided but I guess it will all come out eventually. Great reporting.

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

  • icon
    That Anonymous Coward (profile), 21 Mar 2017 @ 7:17pm

    Something something sort of board that oversees these actions and punishes wrongdoers to protect the image of the profession.

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

  • identicon
    Storm Bradford, 16 Apr 2017 @ 4:06am

    Profile Defenders Still At It

    I signed up with Profile Defenders just recently and was given the same "patented method" story to include a 100% success rate. Moreover, Ruddie claimed to personally know the owner of Rip Off Reports, and would call him and tell him that what was posted by them was all lies and that we were " really good guys."

    After trying to contact him for several days to no avail, I started to "google" where I discovered Techdirt's article. I then immediately asked for the 2K fee that I payed him. He claimed he had already spent "considerable time" on my case and would return only $1500. I then confronted him with his alleged criminal conduct, and that he had just committed another crime a violation of 18 USC 1343 by defrauding me by use of his phone and internet. I told him I didn't do business with crooks, or people who don't return phone calls.

    Next I receive a call from his criminal lawyer, Hirschhorn claims Ruddie told him that. I was trying to extort money from him and I should accept his $1500 offer, wherein I told him to stick it. And this is what Hirschhor said about Ruddie's lies about knowing the owner of Rip off Reports:

    "Storm,
    As a wordsmith yourself, you KNOW the word “know” can have several alternative factual* meanings. Ranging from actually “knowing” someone (i.e. been in his or her company, talked to them etc) to the Biblical “to know” someone. Somewhere between the two is the “I know” i.e. people frequently tell my law partners they “know” me when in reality they mean, they “know of” me or have followed my career and therefor they “know me” when in fact we have never met, much less broken bread."

    Is that a doozy or what?

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


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