Friday, December 11, 2009

How Patrick Byrne Stalked Critics and the Media on Facebook


A Byrne minion used this stolen photo in an elaborate ruse

(See this update: Overstock was already being sued over Facebook privacy breaches, and this update on Facebook expelling Overstock's Judd Bagley.)

So I only just recently got an account at Facebook up and running, just a few days before word broke that Overstock.com's wacky CEO, Patrick Byrne, was hacking into Facebook accounts of his critics -- violating their privacy and stalking their friends, acquaintances, business contacts and family members, including little kids.

One of the people who tried to "friend" me on Facebook was the person with the above picture, who gave his name as "Larry Bergman."

But that's not his name, and that's not his picture. (See update. That's a copyrighted, stolen photo.) His name is Judd Bagley, and he is Byrne's pretexting specialist.

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

The aim was to get their friends' lists in order to publish them on Byrne's "Deep Capture" corporate p.r. website. That, in turn, is then used to concoct elaborate conspiracy theories. ("Deep Capture" is what is known as an "astroturfing" website, claiming to be independent but owned by Byrne via corporate shells, and used to attack his critics.)

I presume that Bergman is just one of a number of phony accounts Bagley set up to carry out this scheme, because he targeted Felix Salmon and others not among the 56 persons on the Bergman friend list.

Byrne succeeded with my wife (family members are prime targets of Byrne's thugs), as well as media people and short-sellers, as well as innocuous folks tossed in to make it all look legit. Sam Antar, who mistakenly accepted his invitation to be "friends," says he tried to friend his kids too.

Among the people who were targeted by "Bergman" were journalists like Joe Nocera of the New York Times, Big Money editor James Ledbetter, teen blogger (and insightful Overstock critic) Zac Bissonnette, Barron's writers Bill Alpert and Eric Savitz, Columbia Journalism Review Audit columnist Dean Starkman -- whose predecessor, Mark Mitchell, went to work for Byrne after he was canned from that job -- blogger Barry Ritholtz, hedge fund managers like Daniel Loeb and David Einhorn, and a sprinkling of people (some real, others probably fellow phonies) to make it all look legit.

The only anomaly is Starkman, who has not written critically about Overstock. I imagine this was just payback by Mitchell.

Oh, and one of the people he conned was Michael Milken, a target of occasional Bagley salvos, no doubt to establish if any of the awful people he targeted were tied in with that person.

I don't think Bagley is cut out for pretexting work, because he was incredibly sloppy.

"Bergman" claimed to work for Goldman Sachs, which was dumb. Maybe he figured it was such a common name there had to be a few "Larry Bergmans" working there. But a GS spokesman told me earlier on Friday that there is no record of any employee by the name of Larry or Lawrence Bergman, and hadn't been except for a part-timer some years ago.

"Bergman" claimed to be a UCLA graduate, class of '96. The alumni association had never heard of him, and a database failed to turn up anybody with that name living in southern California in the 90s.

Another slip-up: Bagley gave "Bergman" my birthday.

"Bergman" also has a Twitter account, following Overstock critics Sam Antar, Tracy Coenen, Herb Greenberg, and with a request to follow me.

Here's an exchange I had with "Larry" earlier today:



After I asked him another question, asking if he worked for Goldman Sachs, he proved he was Bagley by excising most of the information from his profile, including access to his friends list.

Here's how the phony profile looked before my query (I've redacted the birth date):



Note the "sellrshort@gmail.com" email address, in keeping with Bagley's comic-book image of a typical Goldman Sachs-ite.

Here's how it looked later in the day, after my questions:



Now that was really dumb. I was not 100% sure he was Bagley until he tried to cover it up. In fact, I posted an item earlier today and thought better of it, deleting it immediately afterwards.

(Shortly after this item came out, I got a sneering Facebook message from "Bergman" confirming that he was indeed Judd Bagley.)

Oh, and one thing I almost forgot to mention: before I got the friend request from "Bergman," I found that somebody -- gee, I wonder who? -- hacked into my Facebook account and uploaded photographs of "guilt-by-association" presentations Bagley has drawn up over the years, one of which was made the picture associated with my account. Now that ain't legal either, obviously. And yes, I will prosecute.

That indicates that Byrne may have harvested some of these friends lists by hacking into accounts as well as by creating phonies like this.

The objective of this crude scheme is the same one that Joe Nocera described in his February 2006 column, "Overstock's Campaign of Menace":
This is what Mr. Bryne does: along with [Bagley predecessor Phil "Bob O'Brien" Saunders]. . . he bullies and taunts and goads the small handful of reporters who dare to write about Overstock, making it clear that there will be a price to be paid for tackling the company or its chief executive. And as a result, financial reporters have become very chary of taking him on.
I wonder why anyone would shop at an Internet retailer that makes invasion of privacy part of its business model. I also wonder what Facebook thinks of its members being harassed in this fashion by a corporate functionary of Overstock.com, a publicly traded company.

(See this update on Facebook shutting down the "Bergman" account, expelling Bagley from the site, and issuing a sternly worded statement on this pretexting scam.)

I also wonder if the SEC is investigating Byrne's Facebook pretexting scheme and if not, why not.

Even if Bagley hadn't tried this crude stunt, it was already obvious he infiltrated Facebook, one way or the other, for the purpose of harassing Overstock critics, intimidating members of the media, and all with the intent of boosting Overstock's share price by discouraging negative coverage and criticism.

Bagley seemed a bit pissed off in his email to me from the "Bergman" account after the jig was up, so I assume that we'll be seeing a lot of anti-Semitic diatribes on Byrne's Deep Capture website, and perhaps some new lies a-fomenting.

The thing that matters is not that Byrne engages in pretexting and has a staff of people stalking his critics, but that he cooks the books and is facing delisting by Nasdaq.

And I hear that's just an appetizer.

UPDATE: A reader, using a website called "IDThis," ascertained that the picture is an award winning portrait of Matthias Dusini by Heribert Corn . I'm sure they both appreciate their work being stolen and used in a pretexting scheme by corporate scam artists.

They have ample reason to be more than just annoyed. Byrne may learn the true meaning of "copyright" and "identity theft" before too much more time has passed. It's OK for hobby bloggers to use photos like that to illustrate articles, but not for paid corporate p.r. people to do so, and to misrepresent the identity of the person in the photo.

I'm told "Larry's" friends list is still available via this link.

Tracy Coenen opines:

But here’s the best thing about this whole pretexting project of Bagley and Byrne: It completely disproves exactly what they were trying to prove with the project. Their theory was that anyone on their enemies list who was “friends” with one another on Facebook must be part of a conspiracy. After all, Facebook is the perfect tool for co-conspirators to show love for one another, Bagley would have you believe.

Except the fact that people were accepting the friend request of a fake person named Larry Bergman, shows that people on their friends lists don’t even have to exist to get there. They may have “friends” on their lists that they’ve never met and don’t even know. Which completely disproves the theory that “friends’ on Facebook are automatically part of a conspiracy.

What idiots. Who in their right mind wants to shop at Overstock.com when this is the kind of nonsense that CEO Patrick Bryne promotes and pays for? Do you really think any of your private information is safe with them? Do you want even one cent of your hard earned money to go to sleazeballs like this?

UPDATE: As expected, the following day Bagley posted in various forums, under his name and others, wearing his fingers ragged attacking me, deflecting and evading. This exchange is typical. First Bagley suggests he didn't need to create phony identities to create an enemies list for his boss, which raises the question: why did he?

The reason is immaterial, but what is significant is this exchange:

John Carney: Is Gary correct in saying you are behind the Larry Bergman profile? Why friend us with a fake profile? Why has Deep Capture put together a list of our Facebook friends?

Bagley:

No response. The reason is that Bagley blundered. He stole someone's identity. In addition to his usual tactics of lies, lies, and more lies (I trust he was not born "Larry Bergman" and dropped off at the Bagley doorstep), he used someone else's picture to establish a false identity for the purpose of causing harm to third parties, and for the benefit of his employer.

Say, isn't identity theft a criminal offense?

Bagley later tried to diffuse and deflect responsibility for this debacle, saying that "Bergman" was a "composite" (translation: it was Bagley) and that
"The reason for creating him was to simplify the process of finding links, since gathering the data was a pain in the ass." Translation: "Bergman" was created by Bagley to stalk critics of Patrick Byrne.

Separately, Bagley heatedly denied that he uploaded the pictures to my Facebook account, and then described how it was done before demanding an apology from me for accusing him of doing that.

Er, I didn't accuse him of doing that. Methinks the man doth protest too much. But one thing he ain't protesting at all is the fact that he stole the identity of an innocent man and put it on his phony Facebook page.

Byrne himself, however, had no such compunction, freely admitting on Deep Capture his employee's illegal activities:

DeepCapture investigative reporter Judd Bagley used an assumed name to infiltrate their Facebook network and discovered that, yes, the hedge fund managers are in fact Facebook Friends with each other and precisely the financial journalists and bloggers about whom we have been writing, and that (while no one would claim that Facebook Friendship = “co-conspirators”), this fact is interesting.

Gee, that's convincing. Sure does explain why Bagley friended my wife, who doesn't know hedge funds from Adam, or tried to friend Antar's young kids, or Zac.

Byrne and his loyal toady may want to read this New York Times article about how someone was arrested in Manhattan for using someone else's identity on the Internet.

The "Larry Bergman" account was deactivated at about 7 p.m. on Dec. 12. It's unclear whether Bagley removed the account or if it was done by Facebook, since I understand that there were complaints. A bit late for that, wouldn't you say? And note the ambiguity in Byrne's comment, which leaves open the question about whether there are other phony accounts, and other stolen identities, out there.

As Felix Salmon points out, "You really can’t make this stuff up, but the problem is that public ridicule has no effect on these people."

© 2009 Gary Weiss. All rights reserved.

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