Patrick Byrne Disables Phony Facebook Account

"Larry Bergman," R.I.P.

UPDATE: Facebook later confirmed that it deleted the phony account. See this blog post.

Overstock.com's wacky CEO, Patrick Byrne, has disabled the phony "Larry Bergman" Facebook account that he used to track, stalk and harass media people deemed unfriendly. I've gotten a number of emails from Byrne's stalking victims, asking me why "Bergman" is not on their friends list, and that's the reason.

There's growing outrage among the affected people that they were targets of this tawdry pretexting scheme. Byrne and Bagley seem taken aback by the rage directed toward them over this. I've been writing about these slimeballs for three years, but to newcomers they seem shockingly wretched, sort of like creatures from outer space. I'd say the repercussions of this are far from over.

Byrne pulled the plug on "Bergmann" at about 7 p.m. Saturday night, in the middle of a frantic damage-control frenzy orchestrated by his in-house computer hacker, full-time cyberstalker and pretexting specialist Judd Bagley.

It's possible that Facebook killed the account, but I doubt that they'd do this on a weekend. Bagley has claimed that Bergman was a "composite" used by several Byrne employees -- something contradicted by Byrne himself, who posted on the corporate blog that "Bagley used an assumed name to infiltrate their Facebook network."

Note the use of the expression "Facebook network" (singular). It's all a conspiracy, you see, a "network." "Infiltrate" is also a precise use of the term, and it also contradicts Bagley's spin. Byrne and Bagley really have to get their stories straight. Note also the haziness over whether there are other phony Facebook accounts that haven't yet been exposed. Given the size of Byrne's enemies list, that seems likely.

The enemies list can be found here on Overstock's "Deep Capture" corporate p.r. website, an astroturf operation that Byrne has hidden behind corporate shells, but until recently was clumsily hosted on Overstock servers.

It doesn't really matter whether the "Bergman" account was one person or several, because it was an identity theft and pretexting scheme orchestrated by Byrne. The identity theft element comes from the fact that Bagley used a photograph of a person who did not give his consent, as I described in my last item. Keep in mind that this was not some hobby photo; it was the work of a professional. Yet it was obscure, not some famous photo in the public domain. The identity theft victim and the photographer, whose picture was used for nefarious purposes without his consent, in violation of the Lanham Act, have been notified. It will be up to them whether they want to press charges.

Chances are they won't bother, but you never know. Just another "contingent liability" for Overstock's ever-lengthening list of risk factors. If I were Byrne, I'd dip into the trust fund and settle with these people fast. Oh, and don't forget getting them to sign a gag order.

Bagley has been trying frantically, like the loyal subordinate that he is, to divert attention to himself (while carefully sidestepping legal responsibility for "Bergman"). I've never seen him in such a frenzy. His latest gambit was to ask an intermediary to set up a "debate" with me not about naked shorting, but the "personal stuff." That's like Bruno Richard Hauptmann asking to debate Lindbergh. I want Bagley prosecuted and jailed, not given a forum to spew his lies and hate or to attack my wife, as he has done in the past, and aid his effort to divert attention from his boss.

Bagley's frenzied effort to take a bullet for Byrne isn't working. He and his accomplices were acting on behalf of Byrne. All of the media and blog attention to this wretched episode (such as this post by Seth Jayson and this one by Felix Salmon) have recognized that.

The irony is that he's turned a bunch of people who otherwise would be indifferent to Overstock into outraged, personally offended, teed-off people. You might say that in compiling his enemies list, Byrne created enemies where none previously existed. Nice going! And hey, he had the world's most incompetent p.r. man, Judd Bagley, to carry out this task.

Sam Antar posted on his blog this morning his issuer-retaliation complaint against Byrne with the SEC, and I think it bears careful reading. Note the nauseating exchange with Bagley over his targeting Sam's kids. I hear that Bagley has been obsessed with tracking the kiddies, probably feeling that they're plotting against his nutty boss in their dorm rooms.

Byrne couldn't have chosen a worse time to pull this stunt. Facebook has been under increasing scrutiny for its abysmal security, and in fact, Overstock was already sued for participating in the controversial, now defunct Facebook Beacon service. Its latest 10Q -- you know, the one that isn't certified by an auditor, putting Overstock on the fast track to be delisted by Nasdaq -- discloses:

On August 12, 2008, the Company along with seven other defendants, was sued in the United States District Court for the Northern District of California, by Sean Lane, and seventeen other individuals, on their own behalf and for others similarly in a class action suit, alleging violations of the Electronic Communications Privacy Act, Computer Fraud and Abuse Act, Video Privacy Protection Act, and California’s Consumer legal Remedies Act and Computer Crime Law. The complaint relates to the Company’s use of a product known as Facebook Beacon, created and provided to the Company by Facebook, Inc. Facebook Beacon provided the means for Facebook users to share purchasing data among their Facebook friends. Plaintiffs and Defendants, including the Company, have stipulated to an extension in the time for answering the complaint, while the parties engage in a mediation of the dispute. The Company has not responded to the Complaint.

...The nature of the loss contingencies relating to claims that have been asserted against us are described above. However no estimate of the loss or range of loss can be made. If the case is not settled, the Company intends to vigorously defend this action and pursue with Facebook its indemnification rights under the Facebook Beacon agreement.

Note the solicitude directed toward Internet privacy by Overstock spokesman Judd Bagley.

According to TechCrunch, the suit alleges:

The Beacon program sent information regarding specific user transactions on Facebook Beacon Activated Affiliates’ websites to Facebook regardless of whether the user was a Facebook member or not. Thus, no consent was sought, nor was any consent obtained from persons who utilize the Facebook Beacon Activated Affiiliate’s website who were not Facebook members. . .

It was deceptive because, in almost every instance, the information sharing was contrary to the stated privacy policies of the Facebook website and every other Facebook Beacon Activated Affiliate that had signed up for the program.

Not to worry. "Invasion of privacy" is Patrick Byrne's middle name! He'll think of something. Surely Byrne can sic Bagley on the plaintiff's and their lawyers, their Facebook friends, their kids, their friends' kids, their friends' kids' friends.

The suit was settled a couple of weeks ago, so Byrne won't have to deploy Bagley and his phony accounts in that battle. Or at least Facebook settled. I don't know if Overstock did. No matter. Now he has a nice, big fat, Facebook scandal, one for which he has only himself to blame.

Meanwhile, Byrne can get back to work on defending himself from an SEC investigation into his cooking the books, manufacturing profits and reducing losses over a period of years by creating a "cookie jar reserve." That's the main event. All the rest is distraction -- deliberate distraction, if you ask me.

UPDATE:An amusing item in Going Concern today was titled,"Is Patrick Byrne’s Facebook Friends List Motivated by a Farmville Obsession?"

We haven’t really touched on the Patrick Byrne’s ill-fated attempt to stalk his critics (and all their friends, acquaintances, and complete strangers) mostly because we weren’t on the list and those that were (including Gary Weiss, Sam Antar, Joe Wiesenthal, and Barry Ritholtz) are doing a fine job of pointing out how desperate, shady, and just plain fucking bad this makes Patsy, his head minion at DeepCapture Judd Bagley, and Overstock look. . .

. . . This agonizing torture method will eventually wear down the haters to the point to where no one will be able to take the man, his doomed-to-fail quest to locate an auditor, and his company seriously and will thus give up their quest of destroying him.

You just can't buy publicity like this. It also shows that Bagley's stop-the-bullet p.r. strategy is not working. Bagley is personally responsible for some of the most denigrating ridicule I have ever seen directed at his very amoral, very sick employer. I wonder whether Byrne, beneath the haze of whatever intoxicants he may be on, is lucid enough to comprehend that.

If he doesn't, others may remind him of the consequences of playing the fool once too often. The New York Times observed in an editorial on Saturday that "The government is increasingly monitoring Facebook, Twitter and other social networking sites for tax delinquents, copyright infringers and political protesters."

I'm fairly sure that Overstock is not being overlooked in this scrutiny. In fact, I'm certain it isn't.

© 2009 Gary Weiss. All rights reserved.