Roddy Boyd Article Will Cause SEC to Expand Investigation of Overstock.com and Probably Result in Sales Tax Investigation by New York

The Big Money published an article by investigative reporter Roddy Boyd will result in an expanding Securities and Exchange Commission of Overstock.com (NASDAQ: OSTK) and probably a new investigation by the New York State Department of Taxation and Finance for possible tax evasion by the company. Big Money obtained internal Overstock.com documents showing how the company withheld material information from investors about the company's internal control problems and liquidity problems in 2005 and 2006. The article details how CEO Patrick Byrne systematically intimidated, harassed, and attacked his critics to cover up mounting problems at the company. Perhaps the most surprising revelation of Roddy Boyd's article is Overstock.com's efforts to evade paying New York State sales tax in what was known as "Operation Heist and Freeze."

New Issues for SEC to Investigate

The Securities and Exchange Commission, which started investigating Overstock.com after this blog exposed its improper use of "cookie jar" reserves to inflate its financial performance, will surely expand its investigation based on information provided in Roddy Boyd's article. For example, the article details that internal Overstock.com documents revealed that the company's "software system couldn’t track its inventory well, its accounting staff had trouble deciphering how much it owed and whom it had to pay."

However, my examination of Overstock.com's SEC filings finds that CEO Patrick Byrne and CFO David Chidester both signed Sarbanes-Oxley certifications for financial reports claiming that the company had effective internal controls over financial reporting, while internal company documents obtained by The Big Money contradict their representations to investors.

It later turned out that those financial reports were restated two times: in February 2006 due to inventory accounting errors and in October 2008 due to customer refund and credit errors.

Overstock.com faces a third restatement of those same financial reports due to its improper use of "cookie jar" reserves that were exposed in this blog and are being investigated by the SEC. Therefore, Patrick Byrne's and David Chidester's Sarbanes-Oxley certifications were not only false, apparently they were deliberately false based on documents obtained by The Big Money!

In any case, the SEC investigation is already heating up. Just two days ago, Carol Remond from Dow Jones Newswires reported that the SEC subpoenaed Copper River for discovery documents obtained from Overstock.com during its legal battle with the company. Apparently, the SEC hopes that documents obtained by Copper River will help its investigation of financial reporting violations by Overstock.com.

Probable Tax Evasion Investigation by New York State

As I detailed above, Roddy Boyd's article provides damning evidence of possible tax evasion by Overstock.com. After speaking to New York State Department of Taxation and Finance, I am sure that they will be looking into this matter. See excerpt from Roddy Boyd's article below:

Another instance of Overstock critics having the correct instincts, but getting some of the details wrong, is in the confusion surrounding the announcement of Overstock’s design-your-own-jewelry initiative in 2006. Pitched as a value-conscious alternative to online jewelry leader Blue Nile, and offering better quality than Wal-Mart—“For what you would spend elsewhere, you can get her a lot more diamond here,” went the slogan—Overstock dove into the bitterly competitive online jewelry market in January 2005.

What caught the attention of critics was its announcement in the first quarter 10-Q filing in May of 2005 that it had set up a “variable interest entity” to engage in these transactions. The entity had agreed to lend Overstock up to $10 million—$8.4 million of which had been extended in November 2004—for which it received a below-market interest rate of 3.75 percent and a 50 percent claim to all profits. Overstock also had an option to buy the 50 percent it did not own.

Jeff Matthews, a hedge-fund manager, author, and blogger who had long been critical of Overstock and Byrne, immediately seized on the unusual structure of the transaction. He wondered why Byrne, who had discussed the great opportunities they were seeing (and participating in) within the diamond market that January, had not disclosed something as material as the joint venture.

Gradient, in a research note on May 16, 2005, offered a more detailed criticism. The report raised several questions about the deal, including whether the deal was structured as a variable interest entity to “report the top line benefits of the jewelry business without reporting 100% of the unit’s losses.” For a company whose losses, even before the debacle of the software upgrade, were mounting, this was—to Gradient at least—a plausible scenario.

But the truth is much simpler: The deal seems to have been a tax dodge. The joint venture, struck with Moshe Krasnanski and his brother-in-law Mayer Gniwisch—a pair of veteran diamond merchants whom Byrne referred to as “Our Lubbavitcher friends”—had nothing to do with efforts to minimize accounting losses. In an e-mail to the board of directors, Byrne dubbed the process of recruiting the pair, who had set up the profitable online diamond-seller Ice.com, “Operation Heist and Freeze.” According to a memo, Overstock general counsel Jonathan Johnson prepared for the board of directors on July 13, 2005, the company’s VIE was designed to avoid a “nexus in the State of New York for sales tax purposes,” which means that the company would not have to collect, and pay out, sales taxes in the state. The diamond sales effort never really went anywhere for Overstock, and it was closed out during the holidays of 2006 with about $567,000 in accumulated losses, according to an internal balance sheet for the joint venture. [Emphasis added.]

Having done battle with New York's sales tax auditors as the criminal CFO of Crazy Eddie, I learned the hard way that they are more tenacious than mob collectors in retrieving monies owed - no offense to the SEC, FBI, or IRS. Under New York law, company officers are not protected by the corporate veil and are personally liable for any sales tax deficiency.

Written by:

Sam E. Antar

Other blogs covering Roddy Boyd's article:

Gary Weiss: Suspicious Trading Ahead of Devastating Article on Overstock.com's Sales Tax Dodge

Barry Ritholtz: Is Patrick Byrne America's Nasiest Dumbest CEO?

Disclosure:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes, simply because I could.

If it weren't for the 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 own Overstock.com securities short or long. My research on Overstock.com and in particular its lying CEO Patrick Byrne is a freebie for securities regulators and the public in order to help me get into heaven, though I doubt that I will ever get there anyway. I will probably end up joining corporate miscreants such as Patrick Byrne in hell. In any case, exposing corporate crooks is a lot of fun for a forcibly "retired" crook like me and analyzing Overstock.com's financial reporting is a forensic accountant's wet dream.

I have done free training for New York State Department of Taxation and Finance in the past.

The Deceptions of Patrick Byrne (CEO of Overstock.com) and Judd Bagley (Director of Social Media at Overstock.com)

Be careful about what you say and write

As a criminal I thought I could get away with lying under oath in many depositions conducted by the Securities and Exchange Commission and others who investigated the crimes at Crazy Eddie.

I lied with a straight face to the investigators under oath. I was determined to obstruct justice at every opportunity and to escape responsibility and accountability for my crimes. I simply did not care about the victims of my crimes and fought justice at every opportunity.

Had I not been caught by the government I would still be a criminal today.

I learned a very hard lesson from my experiences of lying under oath before I began my cooperation with the government and civil plaintiffs in early 1989. Be careful of what you say and represent to others, it may come back to haunt you.

Examining statements by Patrick Byrne and Judd Bagley about the smear web site antisocialmedia.net

During the last few months I have been examining the actions of Patrick Byrne (CEO of Overstock.com) and Judd Bagley (Director of Social Media at Overstock.com). In particular, I have followed their posting of messages on internet message boards.

Drawing on my experience from testifying as a criminal and later as a government witness I started posting “deposition style” questions addressed to Patrick Byrne, Judd Bagley and other message board posters who were collaborating with them.

Note: I was eventually restricted from posting questions altogether on InvestorVillage.com for the following reason as written in a letter by the InvestorVillage.com administrator:

However, we are putting our foot down on the misuse of our OSTK board for your own agenda, which, for whatever reason, seems to include clogging our forum to conduct an informal and unofficial campaign of "deposition-style" messages targeting other members of InvestorVillage.

Link here to my previous blog post “Investor Village Et al Limits Sam E. Antar from Asking Questions on Overstock.com - Shame on Them!”

Until I was kicked off the Investor Village board (after Patrick Byrne expressed irritation at my questions), he and Judd Bagley would sometimes respond to the “deposition style” questions I asked them.

The responses that they provided to me and other message board posters such as the blogger known as Scipio Africanus (O-Smear blog) indicated a troubling pattern of deception and maliciousness.

One area in particular that I became concerned about was the relationship between the smear web site antisocialmedia.net (initially run anonymously by Judd Bagley the Director of Social Media at Overstock.com) and Patrick Byrne and Overstock.com. Antisocialmedia.net is running a smear campaign against critics and persons examining the actions of Patrick Byrne, Judd Bagley, and Overstock.com on behalf of Patrick Byrne (CEO of Overstock.com).

Patrick Byrne denied involvement with antisocialmedia.net and once wrote:

“Overstock and I [meaning him] have precisely 0 to do with AntiSocialMedia.”

See my previous blog post “Don't Mess with Overstock.com CEO Patrick Byrne.”

Another area of concern was deceptive representations by Patrick Byrne and Judd Bagley relating to the smear web site antisocialmedia.net.

Examine the timeline according to Patrick Byrne’s comments

After Judd Bagley’s role with the web site antisocialmedia.net was revealed on January 2, 2007 by Roddy Boyd’s New York Post article “Overstock.com Lashes Out at Critics on Web”, on January 31, 2007 in a post (message # 4287) on InvestorVillage.com under his alias Hannibal, Patrick Byrne made the following representation:

Oh yes: somewhere in there (after Judd was already working for us) I became aware of ASM. I asked him about it: he suggested that he had a right to expect a "Don't ask don't tell" policy regarding his research and writing. I pointed out to Judd that, if he were involved, he could not be doing anything on our company time, and that he must refrain from doing anything to discuss Overstock from and investment point of view. Only a month or two later, when it began to draw attention, did he confirm his involvement to me. All the questions about "Do you know this guy in Orem who knows this guy and do you fund this or that" are all non-starters. Overstock and I have precisely 0 to do with AntiSocialMedia.

Except for the fact that I am an avid reader and raving fan.

In the past, I did not know what was going to go up on ASM before it went up. However, I have sat with Judd and learned about all the ammo he has held in reserve. So I do know, now, what COULD go up, but not necessarily what WILL (or, in fact, if anything else will).

According to Patrick Byrne, when he became aware of antisocialmedia.net, he discussed the web site with Judd Bagley. By Byrne’s account, they decided on a “Don’t ask, don’t tell policy” to insulate Patrick Byrne from knowledge of Judd Bagley’s actions by reason of plausible deniability. As late as January 31, 2007, Byrne purports that "In the past, I did not know what was going to go up on ASM before it went up."

Before, Judd Bagley was revealed as being behind antisocialmedia.net, Patrick Byrne posted (message # 2964) on InvestorVillage.com under his alias Hannibal on December 23, 2006 and represented the following:

2) I am not behind antisocialmedia.com, offer it no support, it has nothing to do with overstock. Technically, I do not "know" who out there is behind it (the person who is behind it has made an effort to shield me from that knowledge), though admittedly, I have a very good idea.

Patrick Byrne’s representation does not indicate that Judd Bagley had confirmed his involvement in antisocialmedia.net as of December 23, 2006. Therefore, according to Patrick Byrne the purported “Don’t ask, don’t tell” policy he had later described on January 31, 2007 was in effect on December 23, 2006.

According to Patrick Byrne’s posts on InvestorVillage.com, the latest possible date that Judd Bagley could have confirmed his involvement in the smear web site antisocialmedia.net with Patrick Byrne is on January 2, 2007. Roddy Boyd had exposed Judd Bagley’s involvement in antisocialmedia.net in his New York Post article entitled “Overstock.com Lashes Out at Critics on Web”.

Analyzing Patrick Byrne’s time line

According to Patrick Byrne, as of December 23, 2006, Judd Bagley had not yet confirmed to Patrick Byrne his involvement in antisocialmedia.net. Based on Patrick Byrne’s representations, the latest date that Judd Bagley could have confirmed his involvement in antisocialmedia.net to Patrick Byrne is January 2, 2007, when Roddy Boyd of the New York Post revealed Judd Bagley as the person behind antisocialmedia.net.

Patrick Byrne purports that the “Don’t ask, don’t tell” policy was discussed from one or two months prior to the conversation which he claims that Judd Bagley confirmed his involvement in antisocialmedia.net to him.

Therefore, based on Patrick Byrne’s comments, the earliest conversation he claims he could have discussed the “Don’t ask, don’t tell” policy with Judd Bagley was on October 23, 2006 and the latest date of his purported conversation was on November 2, 2006.

However, Patrick Byrne’s accounting of his time line is implausible. He knew about antisocialmedia.net in September 2006 and probably about Judd’s planned formation of it earlier.

In addition, posts by Judd Bagley on antisocialmedia.net in September 2006 indicate Patrick Byrne's prior knowledge of Bagley's posts on the web site.

Another time line based on Patrick Byrne’s and Judd Bagley’s comments

March 2006:

According to Judd Bagley, he began his antisocialmedia.net “research” project.

On January 13, 2007 in a post (message # 3474) on InvestorVillage.com under the alias De Daumier-Smith Judd Bagley wrote:

AntiSocialMedia.net the mojo started in March of 2006 when I first became aware of you clowns and the honorless way you pay your alimony and rent at the trailercourt.

August 2006:

Judd Bagley is hired by Patrick Byrne as “Director of Social Media” at Overstock.com

September 8, 2006:

Judd Bagley anonymously registers the domain name antisocialmedia.net.

September 9, 2006:

Judd Bagley’s very first post on antisocialmedia.net is an anonymous vicious attack on well known investigative reporter, blogger, and vocal Byrne critic, Gary Weiss entitled “Gary Weiss: The Strawman Cometh.”

According to Patrick Byrne’s account, antisocialmedia.net drew his interest after its first post.

September 25, 2006:

Judd Bagley anonymously posts another commentary entitled “Veni, Viki, Wiki?” on the web site antisocialmedia.net.

Judd Bagley wrote in his commentary:

Please note that what follows is my recounting of a story very recently related to me by the subject, Patrick Byrne, with his permission. I invite Mr. Byrne to follow up with any corrections or clarifications that may be warranted. 

This post indicates that Patrick Byrne and Judd Bagley conversed about the content of antisocialmeda.net when he writes “recounting of a story very recently related to me by the subject, Patrick Byrne, with his permission.” In the following post on antisocialmeda.net, Judd receives an email from Byrne. Judd Bagley’s comments indicate that Byrne had prior knowledge of his posts on antisocialmeda.net.

Judd Bagley's post on antisocialmeda.net contradicts the comment (message # 4287) made by Patrick Byrne under his alias Hannibal, on InvestorVillage.com on January 31, 2007 (4 months later):

In the past, I did not know what was going to go up on ASM before it went up. However, I have sat with Judd and learned about all the ammo he has held in reserve. So I do know, now, what COULD go up, but not necessarily what WILL (or, in fact, if anything else will).

Judd Bagley's posts on antisocialmeda.net indicate that Patrick Byrne did have prior knowledge of the September 25 and September 28 posts on antisocialmedia.net.

September 28, 2006:

Judd Bagley anonymously posted a follow up commentary entitled “A Peek into the Mind of Wikipedia’s SlimVirgin” in which includes an email from Patrick Byrne.

EDITOR’S NOTE: As I feared, my recollection of Overstock.com CEO Patrick Byrne’s past experiences with Linda Mack (aka SlimVirgin) did not get it quite right.

Byrne recently emailed me a fuller, written version of the story which I intended to add as a comment on the original post; however, due to its length (and quality), I’ve opted instead to publish it here.

After reading Byrne’s account, all I can say is: my version really sucked and you owe it to yourself to read what follows, in its entirety.

Patrick Byrne’s email to Judd Bagley (posted on the antisocialmedia.net web site) is posted and signed “Humbly submitted, Patrick.”

In contrast to Judd Bagley’s September 25 post, the September 28 post purports to show an arms length relationship between Bagley and Byrne and conceals their personal and professional relationship.

In fact, Byrne and Bagley work in the same building. Judd Bagley deceptively conceals his employment relationship with Overstock.com and Patrick Byrne. Mr. Byrne later described Bagley as a “friend” relating to that time frame in a post on InvestorVillage.com. Apparently, Bagley tried to retract the accidental disclosure of his personal conversation with Byrne in his September 25 post with his September 28 post.

October 23, 2006 to December 2, 2006:

These are possible dates of Patrick Byrne’s purported “Don’t ask, don’t tell” policy conversation with Judd Bagley, according to Byrne’s post (message # 4287) on InvestorVillage.com.

December 23, 2006:

Based in Patrick Byrne’s comments on InvestorVillage.com (message # 2964), he does not claim that Judd Bagley had confirmed his involvement in antisocialmedia.net as of December 23, 2006.

January 2, 2007:

Roddy Boyd exposes Judd Bagley’s involvement in antisocialmedia.net in his New York Post article entitled “Overstock.com Lashes Out at Critics on Web.”. This is the latest date according to Patrick Byrne's statements, that Judd Bagley could have confirmed his involvement in antisocialmedia.net

January 31, 2007:

Patrick Byrne purports that Judd Bagley confirmed his involvement in antisocialmedia.net “Only a month or two later, when it began to draw attention…” in a post (message # 4287) on InvestorVillage.com. Patrick Byrne claims that they discussed a "Don't ask, don't tell" policy after he became aware of antisocialmedia.net

Issues and questions relating to Patrick Byrne’s time line

On January 14, 2007 in another post (message # 3566) on InvestorVillage.com under the alias Hannibal, Patrick Byrne made the following disclosure:

“THE FIRST I EVER SPOKE WITH JUDD ABOUT ASM IS WHEN I WENT TO TELL HIM ABOUT THIS COOL NEW SITE I HAD FOUND. THAT IS THE SUM TOTAL OF MINE OR OVERSTOCK'S SUPPORT. WHILE I GRADUALLY CAME TO THINK JUDD WAS INVOLVED, HE NEVER ACTUALLY WOULD TELL ME THE TRUTH UNTIL RECENTLY.”

Note: Patrick Byrne’s response was written in capital letters.

According to Patrick Byrne’s account, he and Judd Bagley discussed the antisocialmedia.net web site around September 9, 2006, when Bagley posted a false and malicious smear attack against vocal critic Gary Weiss.

Patrick Byrne described a close personal relationship with Judd Bagley by calling him a “friend” on InvestorVillage.com (message # 2964) under his alias Hannibal while denying that it was the reason why he was hired:

I know Judd. He has become a friend in recent months, but that is not why we hired him.

Patrick Byrne’s disdain for Gary Weiss is well known. He has posted threats on InvestorVillage.com and has made several defamatory comments about him.

Aside from the other people smeared on antisocialmedia.net, Patrick Byrne and Judd Bagley share a common and especially vile hatred towards Gary Weiss. In a post (message # 6276) on InvestorVillage.com Judd Bagley under the alias De Daumier-Smith wrote:

No...Weiss is evil. I'll stand by that. More than evil, he's soul-less evil.

Judd Bagley’s comments are indicative of the vile hatred he and Byrne share of Gary Weiss and the malice they have directed against him

In various posts on InvestorVillage.com, Patrick Byrne taunted Gary Weiss and others about the future content of antisocialmedia.net.

For example, after a previous smear commentary on antisocialmedia.net was published against Gary Weiss, on November 26, 2006 Patrick Byrne wrote the following post (message # 2426) on InvestorVillage.com under his alias Hannibal:

I hear that GW is melting down, melting down, melting down.....

On December 23, 2006, Patrick Byrne wrote the following post (message # 2976) on InvestorVillage.com under his alias Hannibal:

This antisocialmedia site seems to have Gary’s knickers in a twist. So for the record:

1) Overstock has no resources supporting antisocialmeda.com. It is someone’s hobby.

Some of Patrick Byrne’s posts on InvestorVillage.com provided links to antisocialmedia.net and others showed his full support for Judd Bagley. In his post (message # 4287) on InvestorVillage.com on January 31, 2007, under his alias Hannibal Patrick Byrne wrote:

"...I am an avid reader and a raving fan."

On November 26, 2006, in a post (message # 2426) on InvestorVillage.com, under the alias Hannibal, Patrick Byrne urged fellow message board participants to read antisocialmedia.net's latest smear:

For those who have not seen it, I suggest reading this.

...www.antisocialmedia.net/

Overstock.com's web site links to antisocialmeda.net. Patrick Byrne uses a smear article on Gary Weiss in antisocialmedia.net to attack him on Overstock.com's web site:

Unfortunately for Gary, he appears to have a relationship with the DTCC, that corporation at the heart of the scandal (http://antisocialmedia.net/pmwiki/pmwiki.php?

It is very possible he knew about Judd Bagley’s plan to launch antisocialmedia.net previous to Bagley’s August 2006 hiring at Overstock.com.

On January 13, 2007, he wrote the following comment about Judd Bagley’s hiring at Overstock.com in August 2006 in a post (message # 4287) on InvestorVillage.com under his alias Hannibal:

Then he spent about 9 months selling his company, and working for the new owner, but taking as his hobby a kind of cat-a-mouse game with Gary and his minions, all over the Internet. These Tools of Satan left IP footprints all over Wikipedia and Yahoo and other places that Judd was able to unscramble and connect. He built an enourmous map of their connections. It turns out that some of them trace back to a woman in my distant past (see wikipediareview.com for details). All of this was done on his own, and while we had occasional conversations about it, I doubt if, in all those months, we met more than a few times, or spoke more than a dozen or two dozen times.

In the process of all of this, he became quite astute about Web 2.0 and the way some had learned to hijack the discourse. In August he approached me about developing an alternative. I agreed, and he joined Overstock. [Emphasis added.]

The above comment by Patrick Byrne indicates his prior knowledge as to the planned formation of antisocialmedia.net.

Patrick Byrne’s explanation of his hiring Judd Bagley is discussed in a post (message # 3451) on InvestorVillage.com by him, under his alias Hannibal:

In the 2.0 paradigm (which is to say, mine and Judd's) it looks like this: an unhealthy alliance has emerged among certain hedge funds, corporate media, and the corporate media's hedge-fund-shills (who call themselves "reporters")…. These guys are so arrogant and stupid they cannot yet grasp that they are the targets of an investigation by honest journalists (that would be the rest of us), we are exposing them, and they are twisting around in shrill complaint like the corporate flacks they are.

That 2.0 paradigm just has not sunk in: they are not journalists, they are the evil corporations, and we citizens are the journalists. "DOES NOT COMPUTE" for Gary, Seth, etc. One of the most interesting things I have ever seen is watching how these shill-journalists react as the tables get slowly turned on them.

In the same post above (message # 3451) on InvestorVillage.com by Patrick Byrne under his alias Hannibal he writes:

PS By the way, for the record once again, ASM receives support from neither myself nor Overstock, and was started, I believe, before Judd joined Overstock.

Prior to that post by Patrick Byrne there was no explicit indication that Judd Bagley had started his antisocialmedia.net research prior to the web site’s inception on September 8, 2006.

Judd Bagley quickly responded with damage control in a post (message # 3474) on InvestorVillage.com, under his alias De Daumier-Smith:

Because the initial posts to ASM the website were based on mojo that was months old, Patrick probably assumed the site had been around that long. That he's unclear on the actual date doesn't surprise me because I never felt any reason to tell him about it -- neither its launch nor subsequent posts.

In this post Judd Bagley purports that he “…I never felt any reason to tell him about it [antisocialmedia.net] -- neither its launch nor subsequent posts.” However, Patrick Byrne’s own representations in various posts and Judd Bagley’s own posts on antisocialmedia.net completely contradict this deceptive statement.

Judd Bagley comments on antisocialmedia.net indicate that he personally spoke to Patrick Byrne to obtain his input for the September 25, 2006 post entitled “Veni, Viki, Wiki?” In addition they show their close personal relationship as friends. His comments on antisocialmedia.net indicate Byrne’s knowledge of the web site and complicity with it previous to September 25, 2006. He later purportedly obtains an email from Byrne for his September 28, 2006 post entitled “A Peek into the Mind of Wikipedia’s SlimVirgin.” In addition they indicate Byrne’s prior knowledge of posts to be made on antisocialmedia.net by Bagley.

Was Patrick Byrne deceptive about his knowledge of Judd Bagley’s actions relating to antisocialmedia.net?

It appears that Patrick Byrne was being deceptive when he wrote on January 31, 2007 (after it was revealed by Roddy Boyd in the New York Post that Judd Bagley was behind the previously anonymous we site antisocialmeda.net):

“…somewhere in there (after Judd was already working for us) I became aware of ASM. I asked him about it: he suggested that he had a right to expect a ‘Don't ask don't tell’ policy regarding his research and writing. I pointed out to Judd that, if he were involved, he could not be doing anything on our company time, and that he must refrain from doing anything to discuss Overstock from and investment point of view. Only a month or two later, when it began to draw attention, did he confirm his involvement to me…. Overstock and I have precisely 0 to do with AntiSocialMedia.”

In addition in his post on December 23, 2006 (before Roddy Boyd’s New York Post article revealing Judd Bagley’s involvement with antisocialmedia.net) Byrne wrote:

Technically, I do not "know" who out there is behind it (the person who is behind it has made an effort to shield me from that knowledge), though admittedly, I have a very good idea.

Based on a timeline from Patrick Byrne’s posts on InvestorVillage.com, he represents that in effect his first purported conversation relating to the “Don’t ask, don’t tell policy was around October 23, 2006 to December 2, 2006. According to Patrick Byrne’s account, since Judd Bagley had not confirmed his involvement in antisocialmedia.net to him as of December 23, 2006. The purported “Don’t ask, don’t tell” conversation between them based on Byrne’s account would have taken place a minimum of six weeks and possibly as much as almost three months after Byrne claims antisocialmedia.net came to his attention during September 2006.

Based on Patrick Byrne’s representations about his first discussion of the “Don’t ask, don’t tell” policy conversation with Judd Bagley it is improbable that such a conversation was discussed at such a late date if such conversation and policy ever existed at all.

Patrick Byrne had already read antisocialmedia.net in September 2006 and possibly had advance knowledge of its formation. Patrick Byrne purported that he discussed with Judd Bagley the “COOL NEW WEB SITE” he had found during September 2006. Judd Bagley discloses his discussions with Patrick Byrne about the content of two posts published on antisocialmedia.net in September 2006. Judd Bagley's discussions with Patrick Byrne as posted on antisocialmedia.net show that Byrne apparently had advance knowledge of posts on antisocialmedia.net despite such denials by him. Patrick Byrne describes a close personal relationship with Judd Bagley by referring to him a as a “friend.”

Therefore, the more plausible time line is that Patrick Byrne hired Judd Bagley in August 2006 to conduct counter critics of Overstock.com and his activities. He needed to distance himself from Judd Bagley’s smear campaign and he retroactively created a “Don’t ask, don’t tell” policy as an excuse for his plausible denial relating to Judd Bagley’s activities. He calls Judd Bagley’s activities a “hobby.” Patrick Byrne purportedly lets Judd Bagley set his own hours at Overstock.com (see previous blog post “Don't Mess with Overstock.com CEO Patrick Byrne”) so he can pursue his critics. Therefore, Judd Bagley can freely pursue his smear campaign on his own time including normal week day office hours at Overstock.com. Patrick Byrne now has his deceitful rational basis for his following statement:

“I am not behind antisocialmedia.com, offer it no support, it has nothing to do with overstock. Technically, I do not "know" who out there is behind it (the person who is behind it has made an effort to shield me from that knowledge), though admittedly, I have a very good idea. ”

Perhaps Patrick Byrne and Judd Bagley will some day be subpoenaed (if not already) to testify under oath in a deposition to the Securities and Exchange Commission relating to its investigation of Overstock.com. Maybe at that time Byrne and Bagley can provide a clear, truthful, and unambiguous account of their actions.

Judd Bagley's deception

It appears that Judd Bagley and Patrick Byrne have not adequately coordinated their stories.

Judd Bagley was deceptive about his communications with Patrick Byrne relating to antisocialmedia.net. On January 13, 2007, in a post (message # 3474) on InvestorVillage.com under his alias De Daumier-Smith, Judd Bagley wrote:

Because the initial posts to ASM the website were based on mojo that was months old, Patrick probably assumed the site had been around that long. That he's unclear on the actual date doesn't surprise me because I never felt any reason to tell him about it -- neither its launch nor subsequent posts.

I still don't see any reason to talk to him about the site.

As late as January 13, 2007, Judd Bagley expected people to believe he had not discussed antisocialmedia.net with Patrick Byrne despite Byrne’s own posts purporting such conversations on InvestorVillage.com and Judd Bagley’s comments on antisocialmedia.net about his discussions with Byrne.

In addition, that very same day on InvestorVillage.com Patrick Byrne posted (message # 3451) the following threat to Gary Weiss under his alias Hannibal:

But from what I know, I suspect that the largest blows to Gary are still to come. You ain't seen nothing."

My advice to Patrick Byrne from a person who has “been there, done that”

I learned long ago that when you can no longer spin, shut up. I sent that advice several times to Patrick Byrne and Judd Bagley through my posts on blogs and internet message boards. Evidently, they just cannot shut up.

Therefore, I offer the following advice from a convicted felon to Patrick Byrne:

Don’t lie under oath if you cannot tell the truth. Exercise your constitutional right against self incrimination if you have anything to hide. If you lie and get caught, you may not get as lucky as me and avoid a long prison sentence. After all, if you and others working in concert with you have committed any crimes, remember that you Mr. Byrne are the “big fish.”

My advice to Judd Bagley:

Patrick Byrne is the “big fish.” You are not far behind Byrne in status. I almost waited too long covering up the activities of Eddie Antar another “big fish.” I advise you to seek responsible legal counsel.

Being held accountable for what you say and write

Judd Bagley recently wrote in the following post (message # 6719) on InvestorVillage.com under his alias De Daumier-Smith:

I simply feel very strongly about people being held accountable for their words.

My guess is that both Patrick Byrne and Judd Bagley will ultimately be held responsible for their words too, as the Securities and Exchange Commission investigation into Overstock.com continues. Other government law enforcement entities may soon follow.

Written by:

Sam E. Antar (former Crazy Eddie CFO & convicted felon)

Update:

Update: After the above blog post, Judd Bagley (Director of Social Media at Overstock.com) changed the purported site description for antisocialmedia.net.

Previous Purported Site Description

About AntiSocialMedia.net

The unique strength of social media (another term for peer-generated, web-distributed content) is also its unique weakness: the fact that anybody can get involved.

Our mandate is broad but our scope, as you’ll read, is less so: focusing primarily on the use of social media as a tool in support of illegal stock manipulation efforts. The principal editor of this website is employed by one of the many companies mentioned in these pages, but is not a shareholder and receives no support whatsoever from his employer.

Please use the comment feature or email to submit tips or additional information.

Current Purported Site Description

ABOUT ANTISOCIALMEDIA.NET

AntiSocialMedia.net seeks to hold accountable those who abuse social media for personal gain, particularly when used as a means of spreading disinformation by stock market manipulators.

Judd Bagley, a former journalist and the primary contributor to AntiSocialMedia.net, has made a hobby of investigating what calls “user-generated discontent” since December of 2005.

In August of 2006, Judd was hired by Overstock.com in a marketing capacity, and continues his investigating on his own time, without support from his employer. Overstock happens to be one of the companies Judd alleges is targeted by these manipulators (in fact, that intersection of facts brought Judd into contact with Overstock.com).

Overstock.com has specifically requested that Judd stipulate that Overstock.com disclaims responsibility for the content on this site, and that nobody other than Judd has knowledge of what he is researching or writing before it is published here.

Don't Mess with Overstock.com CEO Patrick Byrne

As a criminal I knew ugly and vile behavior up close because I practiced it with a cold, dark, and heartless soul. I knew all too well how to use your humanity as a weakness to be exploited. I knew all too well how to win you over with honey. Also, when honey did not work I knew how to instill fear in you through intimidation.

Today, we have a war being conducted by Patrick Byrne (CEO of Overstock.com) against almost anyone who does not fit into his agenda of deflecting from the poor performance of Overstock.com. If you mess with Patrick Byrne, watch out, his anger seems to know no bounds.

As a convicted felon I understand Patrick Byrne’s war of intimidation, smears, and deflection from the personal experience of my own vile criminal actions. Below, I outline some of Patrick Byrne’s actions and some of those persons who work in concert with either him or Judd Bagley (Director of Social Media at Overstock.com).

For more information, I suggest reading the O-Smear blog which in great detail shows the vile despicable actions of Patrick Byrne, Judd Bagley, and their collaborators. In addition, I suggest that you read Gary Weiss’s blog.

Patrick Byrne seems to believe he can control the subject of discussion of Overstock.com on the Investor Village Overstock.com message board

When Patrick Byrne started posting on InvestorVillage Overstock.com message board he wrote (message # 668) the following on August 8, 2006 under his alias Hannibal:

And if you had not guessed, yes I am posting here to try to help Investor Village steal share. When the hordes of bashers show up (Guess We'll have to be on the lookout for them) we want to have our powder ready to eject them.

In late August 2006, he quietly hires his “friend” Judd Bagley to become Director of Social Media at Overstock.com. Shortly, thereafter, on September 8, 2006 Judd Bagley forms an anonymous web site antisocialmedia.net and begins a vile, malicious, and vindictive campaign against Mr. Byrne’s critics and their families.

For many months neither Patrick Byrne nor Judd Bagley would acknowledge who was behind this vile hate spewing web site.

In a taunting post on Investor Village (message # 2426) under his alias Hannibal on November 26, 2006 Patrick Byrne writes:

(Full disclosure: I am not behind antisocialmedia.com, but I could speculate who is.)

Is it bad?

He would issue threats to his critics on Investor Village (message # 2964) while denying rumors of his “friend” Judd Bagley’s involvement in it. On December 23, 2006 he writes:

Can everyone sense these guys sweating? They seem to be getting nervous, don't they? Hence the posts full of non sequitors and picking of nits about unimportant details. They apparently hope that they can confuse the average reader, as long as that reader does not go and read the original antisocialmedia.com material exposing (with screeen shots and IP addresses) these bullies.

But the average reader may still ask, Why are they so nervous, and why now? The answer is, it is because the bullies know what is coming, they know where this antisocialmedia stuff is heading, in a way that the average reader does not. They are flailing in an attempt to derail it.

By the way, since they seem so concerned about these issues, and conflate all their unknowns and half-truths into one steady stream of invective, let me help them out:

1) I know Judd. He has become a friend in recent months, but that is not why we hired him. We hired him to work on a project that should reach fruition pretty soon. That project is completely unrelated to any of this controversy. When you see it, you'll think it is pretty cool.

2) I am not behind antisocialmedia.com, offer it no support, it has nothing to do with overstock. Technically, I do not "know" who out there is behind it (the person who is behind it has made an effort to shield me from that knowledge), though admittedly, I have a very good idea.

That same day in another post on Investor Village (message # 2976) under the alias Hannibal he reiterates:

Overstock has no resources supporting antisocialmedia.com. It is someone's hobby.

On January 2, 2007 Roddy Boyd of the New York Post in an article entitled “Overstock.com Lashes Out at Critics on Web” exposed Overstock.com Director of Social Media Judd Bagley as being behind the smear web site:

Internet retailer Overstock.com's war against its critics is taking an ugly new twist, as a Web site aided and supported by its management is leveling sharp charges against two Internet message board posters. The site, AntiSocialMedia.net, launched bitter attacks last week on the message board critics, accusing them of participating to various degrees in a conspiracy to malign the anti-naked short selling movement that Overstock.com supports….

ASM's work has been vocally supported by Overstock's controversial Chief Executive Patrick Byrne in at least a dozen of his Web posts on the InvestorVillage Internet message board and Judd Bagley, another Overstock executive.

Shortly, thereafter Judd Bagley attached his name to the anonymous smear web site antisocialmedia.net.

Patrick Byrne would try to justify why he claimed not to know that Judd Bagley was behind this smear website. In posts on Investor Village Patrick Byrne later claimed plausible denial as a reason for not knowing who was behind the smear web site and reiterated his support of Judd Bagley’s activities in smearing critics:

On January 29, 2007 (message number 4179) under his alias Hannibal, Patrick Byrne writes:

By way of general response, I will mentioned that I am proud of both mine and Judd's behavior unravelling the charade of miscreants.

On January 31, 2007 (message number 4287) under his alias Hannibal, Patrick Byrne writes:

Oh yes: somewhere in there (after Judd was already working for us) I became aware of ASM. I asked him about it: he suggested that he had a right to expect a "Don't ask don't tell" policy regarding his research and writing. I pointed out to Judd that, if he were involved, he could not be doing anything on our company time, and that he must refrain from doing anything to discuss Overstock from and investment point of view. Only a month or two later, when it began to draw attention, did he confirm his involvement to me. All the questions about "Do you know this guy in Orem who knows this guy and do you fund this or that" are all non-starters. Overstock and I have precisely 0 to do with AntiSocialMedia.

Except for the fact that I am an avid reader and raving fan. In the past, I did not know what was going to go up on ASM before it went up. However, I have sat with Judd and learned about all the ammo he has held in reserve. So I do know, now, what COULD go up, but not necessarily what WILL (or, in fact, if anything else will).

However, Patrick Byrne’s explanation into his knowledge of Judd Bagley’s activities seems quite flimsy. The wall of separation between Overstock.com and the web site antisocialmedia.net is even flimsier.

Was the “Don’t ask don’t tell” policy he referred to above a concocted reason to have plausible deniability of Judd Bagley’s actions? Was Judd Bagley at the very least (if you accept Patrick Byrne’s explanation) lying or being deceitful to his “friend” and boss?

In late September 2006 while Patrick Byrne still had denied knowledge of who was behind the web site antisocialmedia.net, Judd Bagley anonymously posted the following to the site:

….As I feared, my recollection of Overstock.com CEO Patrick Byrne’s past experiences with Linda Mack (aka SlimVirgin) did not get it quite right.

Byrne recently emailed me a fuller, written version of the story which I intended to add as a comment on the original post; however, due to its length (and quality), I’ve opted instead to publish it here.

After reading Byrne’s account, all I can say is: my version really sucked and you owe it to yourself to read what follows, in its entirety.

Antisocialmedia.net then publishes a letter from Patrick Byrne signed “Humbly submitted, Patrick.” Patrick Byrne claims he did not know that letter went to Judd Bagley (Director of Social Media at Overstock.com) who was at the time running the web site antisocialmedia.net anonymously.

On October 22, 2006 Judd Bagley writes in an exchange with another person who posted comments to one of his smear attacks “Patrick Byrne says hello, too.”

Even after Roddy Boyd’s New York Post article exposing that Judd Bagley was behind the antisocialmedia.net web site, Patrick Byrne continued to assert that Overstock.com has nothing to do with Judd Bagley’s activities on that site.

On January 22, 2007 in a post on Investor Village (message # 4287) under his alias Hannibal he writes:

Overstock and I have precisely 0 to do with AntiSocialMedia.

Judd Bagley (Director of Social Media at Overstock.com) claimed on his antisocialmedia.net web site that his time devoted to his web site that:

In fact, given the insistence of my boss, CEO Patrick Byrne, that any continuation of my nearly one year old research be strictly and unambiguously limited to my own time, there’s no question but that my current employment has hampered my progress.

Judd Bagley seems to have as much freedom as necessary to conduct his smear campaign on both his antisocialmedia.net smear web site and posting under multiple anonymous aliases on internet message boards. Judd Bagley has at times posted his messages during regular week day office hours at Overstock.com

In a post on Investor Village (message # 3566) on January 14, 2007, under his alias Hannibal, Patrick Byrne writes:

STRANGE GUY, KEEPS HIS OWN HOURS, COMES IN SOME NIGHTS, STAYS AWAY FOR DAYS. HE HAS BEEN LEADING THE DEVELOPMENT EFFORT OF A NEW PROJECT FOR US. IT IS PRETTY COOL: A SOCIAL MEDIA SYSTEM THAT WILL NOT GERMANATE OR HARBOR TYRANTS.

As to his posting during normal weekday business hours, Judd Bagley posted the following answer on Yahoo (now deleted) under his previously anonymous alias "antsaresocialinsects" around February 8, 2007:

Sam, if I have posted between 8-5 it's either been on a day off, or during lunch using my PDA....

Judd

So let’s get this straight. Judd Bagley who Patrick Byrne has described as a “Clark Kent” type, needs to post vile messages during normal office hours. So, he takes a “lunch” break, leaves Overstock.com premises and changes into “Superman” to conduct his smear campaign? After he is finished with his quick smear on the blogs or internet message boards, he turns back into "Clark Kent" as goes back to work?

If you criticize Patrick Byrne or Judd Bagley you may be subject to vicious attacks on the web site antisocialmedia.net which is run during the so-called spare time of Judd Bagley (Director of Social Media).

If an employee of one of Byrne's adversaries (Gradient Analytics, Rocker Partners, DTCC) was found to be running an anti-Byrne or anti-Overstock site in his "spare time," Byrne and his supporters would be claiming involvement by those companies.

Both Patrick Byrne and Judd Bagley like to use other message board participants to further their agenda by direct communication with them. They will exchange e-mails and private messages with them. They will track your posts and report back to them.

For example, in one post on Investor Village (message # 4954) Judd Bagley under his alias De Daumier-Smith on February 19, 2007 he writes:

Back when I first put Sammy on ignore, I asked Evren to let me know if he (Sammy) ever said anything worthwhile.

Some accomplices have spewed hateful venom on message boards.

One person in particular Edward Manfredonia seems to be Judd Bagley’s new war time consigliore. Like Patrick Byrne, who is known for his now infamous Sith Lord conspiracy, Mr. Manfredonia is no stranger to conspiracy theories himself. Edward Manfredonia likes to accuse certain people he apparently dislikes (including government officials and the press) of covering up murders, perjury, rape, and other vile crimes.

Judd writes fondly about Edward Manfredonia in a post on Investor Village under his alias De Daumier-Smith (message # 6052) on April 2, 2007:

Re: sam, are you really nuts?

As I told Embraceyourinnerhillbilly, Ed may have a quirky way of communicating in writing, but I can assure you he's one of the more knowledgeable people I know. Ed has been enormously generous in sharing his knowledge of how Planet Wall Street works (both in theory and in practice) with me.

If Ed and I spent more than five minutes talking about you or Gary or anything else from this or any other board I'd be shocked.

Note: On March 31, 2007 the anonymous aliase "Embraceyourinnerhillbilly" wrote the following message (# 5943) on Investor Village:

This was Judd's reply to me when I asked him about Mr. Manfredonia. Judd, sorry about posting a PM, but I felt in this case it was warranted. "I have had MANY lengthy conversations with Ed. He is a very good and principled man. But he seriously lacks the ability to communicate effectively. "

In a later message (# 5995) this person who is in direct contact with Judd Bagley would post the following vile message against investigative reporter and Overstock.com critic Gary Weiss:

Re: nutty-weiss

"Weiss is a liar, thief, perjurer and racist. It cannot get worse than that." Sure it can, if Weiss was also pedophile.

Edward Manfredonia in a post on Investor Village under his alias Ed Manfred (message # 6117) on April 3, 2007 writes:

Re: Scipio

I talk to Judd.

I send Judd e-mails.

But 95% of the discussion has nothing to do with Overstock. I have talked about short sales. I have discussed that some people never borrow the stock and that the brokerage houses do not care.

I talked about the puts and some crossed trades

But I have stated one important fact: Gary Weiss shall do everything possible to make certain that Overstock fails- whether Overstock is a viable company or not….

Respectfully submitted,

Ed Manfredonia

Edward Manfredonia has been writing anti-Semitic and hateful posts against Gary Weiss (an investigative reporter and frequent Byrne and Bagley critic on his blog), me, and just about everyone else he dislikes. Mr. Manfredonia has posted multiple libelous claims, vile, anti-Semitic, and hate messages on both the Yahoo Overstock.com board and Investor Village Overstock.com board.
For example, in a post on Investor Village (message # 6023) on April 2, 2007 under his alias Ed Manfred, he writes:

To Sam the Scam:

Tsk. Tsk....

But Tzaddik Morgenthau covered up rape, narcotics smuggling, money launderng, etc. at the American Stock Exchange.

Arthur Levitt and Robert Morgenthau conspired to protect the American Stock Exchange.

Note: Tzaddik means "righteous person" in Hebrew. Mr. Manfredonia uses the Hebrew term "Tzaddick" to associate Manhattan District Attorney (who is of the Jewish faith) with covering up for "rape, narcotics smuggling, money launderng...."

On March 26, 2007 on Investor Village (message # 5835) under his alias Ed Manfred, Edward Manfrdonia writes about Gary Weiss (who is Jewish):

pig's blood

I once accompanied Weiss to a restaurant, Sweet n' Tart, in Chinatown. Weiss ordered pig's blood. It looked scary.

But Weiss consumed the pig's blood with glee. Speaking of treyfe.

Sincerely,

Ed Manfredonia

On April 2, 2007 on Investor Village (message # 6041) under his alias Ed Manfred responding to another person he believed was me he wrote:

Tam, aka Sam the Scam, violated Shabbos.

Edward Manfredonia was upset as evidenced by this post on Investor Village (message # 6046) on April 2, 2007 he wrote:

Sam, why are you so interested in my conversations with Judd Bagley?

He would continue smearing Gary Weiss and I with multiple posts such as this one (message # 6075) on Investor Village:

I have stated that I have never been promised compensation. I have never asked for compensation.

Nor would I ever work for Overstock.

Just because Sam is a crook and Weiss a perjurer and thief, does not mean that everyone else is on the take.

So there has never been and never will be compensation or any type of reward- except the knowledge that I have exposed several liars.

Sam Antar is an Orthodox Jew, yet he had no qualms about stealing hundreds of millions of dollars.

This is merely a new scam by Sam the Scam.

I do not believe that Sam has repented. Sam is a thief.

Respectfully submitted,

Ed Manfredonia

On December 3, 2006 Judd Bagley had written on Investor Village (message # 2571 – now deleted by the board administrator, recreated on the O-Smear blog) under his old anonymous alias AntiSocialMedia:

The guy's name is Ed Manfredonia, his website is wallstreetscandals.com, and yes, he fell off his rocker a while ago.

But while his version of reality and the objective observer's version will likely differ, I don't get the impression that he's actively being deceitful...he's just a bit...touched.

Still, if just 10% of the facts he cites are faithful to reality (and in my opinion, it's much higher than that), well let's just say it fits the larger pattern we're all seeing emerge.

Despite the fact that Judd Bagley writes that Edward Manfredonia “fell off his rocker a while ago” and is “touched” he claims that “...I can assure you he's one of the more knowledgeable people I know. Ed has been enormously generous in sharing his knowledge of how Planet Wall Street works (both in theory and in practice) with me.”

Judd Bagley (Director of Social Media at Overstock.com) denies being an anti-Semite despite his relationship with Edward Mandfredonia. In a post on Investor Village (message #5941) under his alias De Daumier-Smith:

"I'm about as pro-Semitic a goy as you'll meet...."

If you mess with Patrick Byrne you may be accused you of selling your soul

Joe Nocera (New York Times) wrote two columns about Patrick Byrne: On February 25, 2006: Overstock.com’s Campaign of Menace (subscription required) and on March 10, 2007: TALKING BUSINESS; Revisiting Overstock.com And Utah (subscription required). The same day Joe Nocera’s column was published, Judd Bagley (Director of Social Media at Overstock.com) under his alias De Daumier-Smith on Investor Village (message # 5430) wrote the following in a brutal reply:

I pity Joe Nocera:

Joe Nocera's skewed take on this issue can no longer be attributed to mere differences in human perceptions. He has sold his soul. And I guarantee you he hates himself for it. Certainly, whatever he's getting in return helps to numb the pain, but that stuff never lasts.

Therefore, if you write a column that does not fit into Patrick Byrne’s agenda like Joe Nocera, perhaps you should expect one of his surrogates to say you have “sold your soul.”

If you mess with Patrick Byrne details of your marriage and divorce are subject to misrepresentation and innuendo

On February 21, 2007 Susan Antilla (Bloomberg) wrote a column entitled "Overstock Blames with Creepy Strategy." On February 22, 2007 Judd Bagley posted his response on Investor Village (message # 5017) under his alias De Daumier-Smith:

A wee bit of context on Susan Antilla

I just wanted to point a couple of things out about Susan Antilla...you know, add some color to her commentary.

The conventional wisdom has been that her husband, Dennis H Leibowitz , is with Credit Suisse First Boston. Wrong. In 2002 he left SCFB (misspelled should be CSFB) to start his own hedge fund….

One problem with that post was that Susan Antilla was long divorced from her husband. When asked about it by other message post posters Judd Bagley published the following on his web site antisocialmedia.net (before later “editing” it):

I went on to spend about 10,000 moments online searching for evidence of that divorce, yet found no record of the dissolution of the Antilla-Leibowitz union. In fact, I’m on the verge of advising Miss Antilla to ask her divorce lawyer for her money back.

He goes on with his latest smear of Susan Antilla in the same post on antisocialmedia.net:

That’s the bad news. The good news is: during my search, I found something even better.

In 1994, Antilla was a New York Times business writer. In the fall of that year, she learned of a rumor suggesting Robert Howard, head of Presstek, might actually be Howard Finkelstein, a convicted felon known to use various aliases, including “Robert Howard”. Antilla would not reveal the source of the rumor, other than to acknowledge that it came from a short sellers of Presstek stock.

A quick word about good journalism.

There’s an easy way to discern a responsible journalist from an irresponsible one: irresponsible journalists are willing to write about rumors. Responsible journalists may investigate rumors, but insist on reporting facts.

Following interviews with 30 people, including Robert Howard himself and his son, in which Antilla found nothing to support the Howard-as-Finkelstein rumor, she opted to write anyway…about the rumor.

Judd Bagley spent “10,000 moments" online in an obsessive search for evidence of just that divorce.” That is probably over 166 hours researching the issue of her divorce over probably at most a 5 week period.

Certain other message board posters had found out about her divorce in less than twenty minutes by doing a simple web search.

In addition, Judd Bagley seems to have missed or neglected to say an important fact about Mr. Howard. According to the Securities and Exchange Commission web site:

The Securities and Exchange Commission today filed a Complaint in the U.S. District Court for the Southern District of New York against Robert Howard and Robert E. Verrando, the Chairman and President, respectively, of Presstek, Inc., a Hudson, New Hampshire-based manufacturer of printing press technology and related products. Without admitting or denying the allegations in the Complaint, Howard, 74, and Verrando, 66, consented to the entry of final judgments of permanent injunction against them that also require them to pay a total of $2.9 million in civil penalties. In a related matter the Commission issued a Cease-and-Desist order against Presstek by consent. (Source: Securities and Exchange Commission)

If you mess with Patrick Byrne your personal information is up for grabs

Judd Bagley and/or others working in concert with him have been accused of implanting tracking software on their message board posts and “private messages” in an attempt to extract critic's IP addresses and other personal information. (See: O-Smear Blog Label Spyware and Gary Weiss Blog Label Spyware.)

If you post on an internet message board anything that does not fit Patrick Byrne’s agenda, you risk having your personal information (including home address) posted on Judd Bagley’s web site antisocialmedia.net. Your home address is not sacred and may not be sacred to Patrick Byrne and his surrogate Judd Bagley.

If you mess with Patrick Byrne even your wife may be subject to scrutiny

If you publish a blog like Gary Weiss and question the actions of Patrick Byrne and Judd Bagley you risk having every aspect of your life under a microscope. Your wife is not sacred to them but mere fodder for an attack. Details of about your wife will be posted. They will post false or misleading information about you or your family members. See Gary Weiss Blog: January 12, 2007 - Judd Bagley Fesses Up.

If you mess with Patrick Byrne he may help orchestrate a government investigation of you

On February 15, 2007 Herb Greenberg (MarketWatch.com & Wall Street Journal columnist, blogger, and CNBC contributor) wrote the following on his blog in a post entitled "Overstock's Byrne: Thanks for the Memories"

On Feb. 10 of last year, three days after the SEC subpoenaed several members of the press in connection with the investigation -- but weeks before I ever made my subpoena public -- I received this email from Overstock (ostk) CEO Patrick Byrne:

Dear Herb,

I write in the spirit of our little sideline chats of the past. If you are not open to this, let me know.

I am just sitting here with a glass of wine in my hands, reflecting on what a really bad week you and your friends have had. The last two days in particular will likely prove to have been life-ruining events for certain people. As I take a sip, I find myself curious: do you guys know? Are you sitting somewhere, blithely oblivious, still chuckling about Whacky Patty, and all that? Or do you understand now that this is going to end badly for you?

The signs are that you guys do understand, as some of your cronies are starting to make desperate-seeming mistakes. Do you understand what is happening in your world? How do you rationalize it? How do you tell yourselves it will work out? Do you ask yourself if you should have done something differently? I don't suppose you would tell me what it feels like: even were you in a panic, you'd probably write something like, 'Anything you say Patrick!' But you guys cannot be completely oblivious about the meetings that are going on, the questions that are being asked, the documents being drafted, the stories that are being told, the people who are listening. Someday people will be asking you what it felt like, to be where you fellows are now, and I am mildly curious to know: I hope you record the thoughts for posterity, if only as a cautionary tale. And if you would care to send me a letter, I would keep it private if you so desire.

Who knows, I might even be in a position to do you a favor someday.

Call anytime.

Patrick.

One has to wonder whether Patrick Byrne instigated or encouraged the Securities and Exchange Commission.

The SEC started investigating a research firm Gradient Analytics. Their problem was that they published research reports critical of Overstock.com’s business model and certain accounting practices.

Overstock.com and others sued Gradient Analytics and the hedge fund Rocker Partners. So if you are a hedge fund and your trades do not fit into Patrick Byrne’s agenda, watch out too. You may be sued.

Recently, the Securities and Exchange Commission dropped its investigation into Gradient Analytics but continued its investigation into Overstock.com.

When the Securities and Exchange Commission first began its investigation into Overstock.com Patrick Byrne celebrated receiving his subpoena. He attempted to spin the situation into the SEC looking into Overstock.com as a means of them going after Gradient.

The Overstock.com web site states:

Was Overstock behind the SEC subpoenaing business journalists?

No.

Has Overstock been subpoenaed?

Yes. We received a subpoena from the SEC on May 9, 2006. Prior to receiving the subpoena, we were already cooperating fully with various agencies, including the SEC.

Is Overstock being investigated by the SEC or other agencies?

The SEC is conducting an investigation on Overstock.com (see previous question). We are not aware of other investigations by any other agencies."

Are the subpoenas an infringement on these journalists' First Amendment rights?
Again, Overstock is not behind the subpoenas and we do not know what the subpoenas are about.

Notice that the Overstock.com web site states “Again, Overstock is not behind the subpoenas and we do not know what the subpoenas are about” despite the threatening e-mail Herb Greenberg received from Patrick Byrne.

In addition, the web site states “investigation on Overstock.com” rather than “investigation of Overstock.com.”

One has to wonder why the SEC investigation of Overstock.com continues after they dropped the Gradient investigation.

According to Overstock.com's most recent 10 - K filed for the fiscal year ended December 31, 2006:

On May 9, 2006 we received a notice of an investigation and subpoena from the Securities and Exchange Commission, Salt Lake City District Office. The subpoena requested a broad range of documents, including, among other documents, all documents relating to our accounting policies, our targets, projections or estimates related to financial performance, our recent restatement of its financial statements, the filing of our complaint against Gradient Analytics, Inc., the development and implementation of certain new technology systems and disclosures of progress and problems with those systems, communications with and regarding investment analysts, communications regarding shareholders who did not receive our proxy statement in April 2006, communications with certain shareholders, and communications regarding short selling, naked short selling, purchases and sales of our stock, obtaining paper certificates, and stock loan or borrow of our shares. We have responded to the subpoena.

Why you should not mess with Patrick Byrne

If you publish anything that does not fit into Patrick Byrne’s agenda watch out. Anything from your past may be subject to smear, innuendo, and misrepresentation. Your family members may come under attack too.

You may be subject to vicious attacks on the web site antisocialmedia.net which is run during the so-called spare time of Judd Bagley (Director of Social Media).

As a criminal I knew how to instill fear when I had to. So be afraid of Patrick Byrne. Stay away from him since he and his surrogate Judd Bagley know the smear game all too well.

When I look at the actions of Patrick Byrne and Judd Bagley I am reminded of my own criminality. Sometimes when I look in the mirror I see Patrick Byrne.

The only real transparency you can get from Patrick Byrne is the ugliness and maliciousness spewed by his actions against those who do not fit into his agenda.

Written by:

Sam E. Antar (former Crazy Eddie CFO & convicted felon)

Other Blog Posts:

O-Smear Blog:

February 26, 2007 - Controlling the Discussion about Overstock

February 26, 2007 - AntiSocialMedia's False Start

February 27, 2007 - Illegal Computer Access?

Gary Weiss Blog:

March 19, 2007: Ordinary People Versus Corporate Bullies

March 25, 2007: The Overstock Meltdown Continues

April 2, 2007: Overstock.com Finds a Ten Year Old

Jeff Matthews Is Not Making This Up Blog:

December 10, 2005: Weekend Reading: Conspiracy of the Jews?

December 23, 2005: Conspiracy of the Jews? Part II

December 26, 2005: A Necessary Correction

There are other informative posts in the above blogs.

Other Web sites:

The Register:

December 3, 2005: The bizarre world of Patrick Byrne's Overstock

My White Collar Fraud Blog:

January 15, 2007: Overstock.com: An Arsenal of Intimidation and Fear

January 17, 2007: Sam E. Antar and Judd Bagley from Overstock.com Communicate on DealBreaker Blog

February 20, 2007: Investor Village Et al Limits Sam E. Antar from Asking Questions on Overstock.com - Shame on Them!