Court Shuts Patrick Byrne's 'Deep Capture' Libel Factory

Patrick Byrne's website has a new look

UPDATE: Overstock.com CEO Patrick Byrne and his hireling Mark Mitchell lost the Nazerali lawsuit in May 2016. Details can be found here.

More evidence emerged yesterday that Overstock.com CEO Patrick Byrne definitely made a serious boo-boo when he published fairy tales about a Canadian stock promoter in his Deep Capture astroturf website. A Canadian court has issued an injunction shutting down the site.

The details are described here.

As I pointed out in my blog post yesterday, Byrne, his hireling Mark Mitchell, and other defendants (including his web host, GoDaddy), were sued by a stock promoter named Altaf Nazerali, who was named by Mitchell in a nutty conspiracy theory linking him with every crime since Jack the Ripper.

I have no idea why Byrne & Co. targeted Nazerali. His Middle Eastern name? Whatever the reason, they picked the wrong victim.

Conspiracy theorist/fantasist Mark Mitchell, Deep Capture blog

What makes this suit interesting is that we don't often see libel suits in which the defendant just simply makes stuff up from top to bottom. It's one thing to make mistakes or to exaggerate, but it's not every day that a court gets before it a libel suit in which stuff is simply fabricated without a shred of evidence. I'd say that blanking of the website is just the prelude to what is likely to be a messy and costly (for Byrne) bit of litigation.

I almost feel sorry for Mitchell. He's clearly a troubled person, and I don't want to poke fun, but I honestly don't think he has any idea of the ordeal that is ahead of him. I know a fellow who was the defendant in a libel suit who was subjected to two weeks of grueling cross-examination in a pre-trial deposition. The other side's lawyers probed his private life in grim detail. And in that case he was dealing with an American court, the plaintiff was guilty as hell, and he was telling the truth!

The same is true for any other person or entity associated with the site, including Byrne's loyal hatchet person Judd Bagley, a former company spokesman who was moved back to Overstock in late 2010, and former message board stalker Evan Karpak, who remains a principal of Deep Capture LLC and was, inexplicably, not named in the lawsuit. An oversight, I'm sure, that can be rectified in due course.

In Canadian courts, the usual burden is reversed and the defendant has to prove the truth of the libelous statements. Good luck, Mark.

So far, a single Canadian judge has shown considerably more fortitude in dealing with Byrne & Co. than the SEC, which ended an investigation into his financial-statement fabrications inconclusively, and has another probe dragging along for months without action.

The Deep Capture fictions are now dealt with, at least for the time being, but the fictions in his oft-restated financial statements remain unresolved and unpunished.

It will be interesting to see what happens next. I presume the website was shut by its web host, and of course there's nothing to prevent Byrne from moving the content to Iran or wherever -- or return DC to Overstock's own servers, where it used to be -- all the while bleating about how his right to make stuff up about people has been infringed by dastardly Canadians. The judge is just going to love that.

Golly, I wonder if Overstock or Byrne have any Canadian assets, or expect to have any in the future? Given the paper-thin corporate veil, and the interrelationship between Overstock and Deep Capture, it's going to be fun to see that litigated if Byrne should default. If he decides not to take it on the lam, I certainly expect to see an "O.co Coliseum" arising within proximity of the courthouse in Vancouver, as it has in Oakland.

For Overstock, this is looking more and more like a disclosable event, not that the fine print in the securities law has ever meant anything to Byrne. Stay tuned to this channel for more developments.

Meanwhile, I assume that certain Canadian lawyers are focusing on the links between Deep Capture and Overstock, a subject I have explored in the past. (See also this detailed blog post by Sam Antar.) Overstock is fast running out of cash, but it is a tempting target nonetheless.

© 2011 Gary Weiss. All rights reserved.
------------------------------
AYN RAND NATION: The Hidden Struggle for America's Soul, will be published by St. Martin's Press on Feb. 28, 2012. Pre-order by clicking here.

Judd Bagley Goes Back on the Overstock.com Payroll

Bagley arrested for forging prescriptions, 2013

UPDATE: Judd Bagley copped a plea to eight drug felonies in April 2013. See "Closing the File on a Criminal and Junkie Named Judd Bagley," March 30, 2015.


New developments today in the continuing saga of Overstock.com, my favorite corporate crime petri dish. Word has slithered out of Utah that the nauseating corporate shill Judd Bagley (left), CEO Patrick Byrne's personal dirty tricks specialist and manager of Byrne's Facebook stalking campaign, has been transferred from Byrne's "Deep Capture" blog back to the corporate payroll.

As usually happens when Overstock wants people not to notice something, there was no public word of Bagley's transfer to the corporate trough. Word of that emerged from Bagley's LinkedIn profile, which indicates that he became "manager of collaborative systems" at Overstock in September. That was noticed by one member of the army of Byrne fans that keep tabs on his nutty escapades.

Bagley originally was on the corporate payroll as a p.r. spokesman before he was transferred over to DC in 2008, and now he's back.

There has been no activity on Byrne's Deep Capture site since a Bagley post in July, except for an incoherent post by Byrne in October.

It's not clear why the plug was pulled in this fashion. Was it the ongoing SEC investigation? Intervention by Byrne's dad, who is now serving on the board? Or was Byrne just bored with the whole thing and moved on to another plaything? Hard to say.

Whatever the reason, I'm sure that the shareholders of Overstock can rejoice at the addition of a slug of lead weight added to the company's payroll, and of course, the rank-and-file employees of the company can celebrate that they're working hard while Byrne puts a lackey on the payroll. Not sure was a "collaborative system" is, but my guess would be that it has something to do about spying on loose-lipped employees.

Byrne's PR effort nowadays are desultory appearances on Fox Business News, and otherwise the "jihad" against the naked shorting bogeyman has gone down the tubes. Every official and unofficial study of the 2008 financial crisis has found his obsession was not a factor in the crisis, and most haven't even mentioned it.

Mark Mitchell, Deep Capture

Interestingly, Utah corporate records show that Bagley remains "manager" and "registered agent" of Deep Capture LLC, with Byrne toady Evren Karpak still listed as "manager." It's not known if this means anything, or if it's just another sign of Overstock's casual attitude toward telling the government stuff.

The fate of Mark Mitchell, the fired former Columbia Journalism Review editor and Byrne's chief conspiracy theoretician, is unknown.

The biggest mystery of Byrne's corporate p.r. site remains unsolved: why did it take three people to manage a website that publishes rarely and serves mainly to salve the limitless ego of a bored CEO?

© 2010 Gary Weiss. All rights reserved.

Patrick Byrne Covers Up Ownership of 'Deep Capture' Smear Site

A couple of months ago I described how Overstock.com's terminally wacky CEO Patrick Byrne has thrown caution (and any lingering sanity) to the winds and was openly sponsoring attacks on journalists and other critics, on a smear site that he owned and was operated on Overstock servers, "Deep Capture."

This was a change from Byrne's previous tactic of claiming that smears and attacks were by people who just coincidentally happened to be his employees. The word for this is "astroturfing," and it is a particularly sleazy method of concealing corporate (and sometimes government) involvement in dirty tricks campaigns.

Well, it seems that Byrne is back to astroturfing. For some unknown reason he has been frantically trying to distance himself from Deep Capture's ownership, while at the same time boasting about his and Overstock's involvement in the site.

An eagle-eyed reader points out that Byrne has changed the ownership of the site, as recorded in the records of the Utah Department of Commerce. Here are Deep Capture's registered principals, duly recorded with the Utah Dept. of Commerce, as of April 20:



As I pointed out in my earlier post, High Plains Investments=Patrick Byrne, according to Overstock's SEC filings.

Here's Deep Capture's registered principals as of today:



"Judson Bagley" is, of course, Overstock's nauseating house stalker Judd Bagley, the former low-level Republican dirty tricks specialist who Byrne put on Overstock's payroll to run his "antisocialmedia.net" corporate smear site and to attack his critics on the Internet generally. "Deep Capture," the ironic term Byrne uses for his website, is the successor to antisocialmedia. I say "ironic" because Byrne is quite arrogant about using his trust fund income to capture not only regulators but also ex-journalists such as Mark Mitchell, the ex-journalism review editor now on Byrne's personal payroll.

Evren Karpak is not an ex-journalist, but just some creep who won Byrne's heart by attacking his enemies. Karpak was put on the Overstock payroll after a distinguished career silencing critics of Overstock on the Investor Village message board. I've always found the hypocrisy of all this amazing, by the way. Byrne screams about "paid bashers" criticizing his company, always without evidence, while he very openly puts people on the payroll to smear his critics.

In addition to changing the registered principals of the company that owns the smear site, Byrne has changed the registration of the website, which used to be in his name.

Here's the registration of the Deep Capture website as it was on April 20:



. . . and here is the website registration today:



Apparently he anonymized the registration on May 2. Note that he hasn't yet taken Deep Capture off Overstock's servers. I guess that will come later.

It's not clear to me why Byrne is trying to hide his and Overstock's ownership and operation of Deep Capture. Just the other day he boasted that Overstock.com had financed an advertising truck at the SABEW convention. Deep Capture is linked from Overstock's "community" tab, and openly benefits from a share of Overstock revenues.

I can't figure out a rational reason for any of this. To shield himself from liability? A court would strip away that corporate veil in five seconds. But, then again, rationality has never been Byrne's strong suit.

UPDATE: Forensic accounting guru Tracy Coenen has a cogent follow-up.

© 2008 Gary Weiss. All rights reserved.

Going to Work for Captain Queeg

Since I began tracking the activities of corporate train wreck Overstock.com, I've gotten a lot of hate mail from the general direction of Overstock.com, and also a lot of really fascinating stuff. Former associates of the company have been in touch. And the stories they tell are amazing.

These people are terrified of the reaction from the vindictive and unhinged CEO Patrick Byrne. I don't blame them. The Overstock.com they describe reminds me less of an Internet company than it does the U.S.S. Caine under Captain Queeg.

For instance, one former well-placed Overstock official wrote me after an item on Byrne's posturing over school vouchers. I was being unfair, evidently.

This issue, I'm told, "has been Patrick's passion for quite some time and goes back to his roots in economics… before he went nuts. . . He started his campaign for school vouchers years before his jihad against Wall Street and the downward spiral into which it has sent him."

This person stated that "I agree that the way he runs the company is awful . . However, I urge you to think twice about sullying the one good thing he’s trying to do."

Well, I stand corrected on that. Thanks for the vote of support in favor of the ex-boss. More excerpts from the ex-Overstock refugee camp can be found in the update here.

Evidently these ex-employees think too dang much. They must remember that sheer, blind sycophancy is the order of the day on the corporate Caine.

Paranoia too. "He keeps very close tabs on anything on the Internet that says something negative about him and has his people scour to find their identity," says one ex-Overstocker.


Still, ya got to eat. And for those who are not particular about their choice of employer, there is always Overstock.com. But, as can be seen from the above, a special breed of employee is required. Thus I see that a creepy character named Evren Karpak has just joined the team. Byrne's new "Jihadist" in the war against the Sith Lord (right) announced his hiring by Overstock in this post on a stock message board yesterday.

What's remarkable about Karpak are his qualifications: he doesn't appear to have any, except for an ability to kiss Byrne's butt on Internet message boards and attack Byrne's critics. He's a kind of junior varsity Judd Bagley, who also was hired after attracting Byrne's attention by smearing Byrne's critics. Karpak's sliminess is chronicled here.

Karpak's duties were not disclosed, but I assume he'll be working for Bagley as a kind of aide de stalker.

This probably explains why Byrne went out of his way to distance himself from Karpak, at the tail end of a post on Sept. 20--just five days before Karpak announced his hiring by Byrne. In an odd addendum to the post, he said:

PS For the record:
1) Evren has no relation to Overstock. I believe I have never even spoken to him, but I recall a handful of emails from some time ago. I think these blackguards hate him because, though English be a second language to him, he writes better than they do, and also, because he is a Turk and they are bigots.

Never spoken to him? And five days he is hired? That strains belief, to say the least.

Given his penchant for serial fibbing, I assume this can be translated to mean that Karpak had a relationship with Overstock. In fact, I would not be surprised if he had been hired when those words were written. The SEC, which is investigating Byrne and Overstock.com, may want to explore just when Karpak began his job talks with Overstock.com.

Karpak was notorious for posting hate-filled messages on stock message boards and serving as a volunteer stalker and toady for Bagley, who operates the antisocialmedia.net corporate smear site. Karpak has aimed most of his venom at Sam Antar, the reformed felon who is working with regulators to bring bad companies like Overstock to justice.

When he wasn't bashing Byrne's critics Karpak has been a shameless shill for the company, and has been steadily posting his swill pretty much every day. This bit of syrupy cheerleading, for instance, was posted just five days before his announcement yesterday. Seems to me that any relationship with Overstock -- such as a pending job offer or talks related to employment -- should have been disclosed on the post. The SEC should explore whether Karpak received compensation of any kind for his aggressive shilling of the company and vicious attacks on Byrne's critics. And I would suggest that giving a cushy job to a message board shill is compensation, in and of itself.




Putting aside the significant ethical and legal aspects, Overstock is, of course, heading into a red-ink typhoon of the kind that almost foundered the Caine. So this is a really remarkable -- if unsurprising -- squandering of corporate resources. Such hirings do wonders for a company's morale, so I am sure there will be more ex-employees even if the company remains in business, which seems doubtful.

You have to admit that Karpak has shown the immorality and obsequiousness required to work for a nauseating company like this. Still, he'd better keep watch on the strawberries in the pantry, if I were him.

UPDATE: A grimy little company called BioTech Medics today pledged its fealty to Byrne and his baloney crusade. As long as he is flushing his shareholders' money down the toilet, why not buy this company as a gesture of gratitude?

© 2007 Gary Weiss. All rights reserved.



-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.