Federal Judge Rules I B M Must Defend Paycom

Epoch · 12-23-2002

PRESS RELEASE

For Immediate Release:

FEDERAL JUDGE RULES IBM MUST DEFEND CLAIMS THAT IT WRONGFULLY RECEIVED AND RETAINED MILLIONS OF DOLLARS DERIVED FROM INTERNET PORN WEBSITES
(Los Angeles, California)

A U.S. Federal Judge has ruled that IBM must defend claims that it wrongfully received, retained and refused to return millions of dollars derived from the sale of pornographic content over the Internet. The lawsuit brought by Paycom Billing Services, Inc. claims that IBM along with Payment Resources International ("PRI") and its principals Andrew Phillips and John Blaugrund, along with a number of other defendants, participated in a pattern of Racketeering activities involving several different schemes in connection with the processing of credit card transactions related to the purchase of adult-oriented content over the Internet. IBM is alleged to have received, retained and refused to return millions of dollars which Paycom was allegedly defrauded out of by PRI, Phillips, Blaugrund and certain other defendants in the largest of those schemes.

Last January, United States District Judge Dean D. Pregerson ruled that PRI, Phillips, Blaugrund and others (including a British processor known as Global Payment Systems Limited ("GPSL")) must defend themselves in Federal Court against allegations of RICO violations, including numerous acts of wire fraud and laundering of monetary instruments to defraud Paycom in connection with the processing of credit card transactions over the Internet. Paycom is claiming tens of millions of dollars in actual cash losses as a result of the alleged fraud. IBM is alleged to have contracted with GPSL to process the transactions which GPSL fraudulently obtained from Paycom, and then to have wrongfully retained the lion's share of the proceeds of those transactions to pay for other, unrelated debts of GPSL and certain merchants other than Paycom to IBM. In a related development, the Los Angeles Federal Court granted judgment on December 20th, 2002 in favor of Paycom against GPSL in excess of $40 million (which is subject to collection).

IBM sought to avoid defending Paycom's claims on the basis that IBM's conduct was factually unrelated to the alleged fraudulent conduct of the other defendants. In a ruling dated December 12, 2002, Judge Pregerson denied IBM's Motion to Dismiss and ruled that IBM's alleged conduct was sufficiently related to the alleged conduct of the remaining defendants such that it is appropriate for IBM and the other defendants to be forced to respond to Paycom's claims in the same lawsuit.

The entire lawsuit may be found at www.paycom.net/lawsuit.pdf

Richard P. Crane, Jr., a former U.S. Attorney and Federal Prosecutor, and his partner at the law firm of Musick, Peeler & Garrett LLP, Dennis M. P. Ehling, represent Paycom. All press inquiries should be directed to Mr. Crane or Mr. Ehling at 213-629-7600.

Winetalk.com · 12-23-2002

is IBM = International Business Machines?

Epoch · 12-23-2002

Quote:

Originally posted by Serge_Oprano@Dec 23 2002, 11:09 AM
is IBM = International Business Machines?

Yes.

Nickatilynx · 12-23-2002

Fuck!!!

John Blaugrund....owes me 6 figure too

Winetalk.com · 12-23-2002

ick, are you telling us the sharp guy like you took somebody's 6 figures IOU???

I can't beleive it!
;-))

Nickatilynx · 12-23-2002

Chargeback fines we never got proof of,and reserves.....my brother ,technick , knows more of it.

12-23-2002

The lawsuit makes interesting reading:

"....For example, when Mastercard fined Mintola for chargebacks received in March 2001, Mintola and PRI began electronically debiting Paycom's checking account (via wire transfer) on a regular basis for additional "fines" purportedly assessed by Mastercard for chargebacks received in April, May, June and July 2001. When Paycom inquired about the "fines", PRI represented to Paycom that such additional "fines" had actually been levied by Mastercard against Mintola. Paycom subsequently learned however that these funds which Mintola and PRI were debiting from its account did not represent actual fines which had been levied by Mastercard but, instead, represented "projected fines."

We had exactly the same experience when we used PRI.

"....Moreover, Paycom has alleged that Phillips and Blaugrund made repeated representations to Paycom to induce Paycom to turn over all of its VISA transactions to PRI, including:
(1) Phillips representation shortly after processing began, and then in April and May of 2001, that Banco Uno had placed "volume restrictions" under the Banco Uno merchant account.
(2)Phillips repeated representations, between December 2000 and May 2001, orally and via email, that "more volume" was "coming" or actually available, and that more transactions could be settled through an account PRI called "Centaurus";
(3) Blaugrund's repeated representations, orally and via email, that PRI would hold the VISA transactions sent to PRI by Paycom until Banco Uno would allow them to be settled, and would settle as many of Paycom's transactions that it could at any given time.

Paycom has come to understand however, that the "volume restrictions" to which Banco Uno subjected Paycom over the period between November 2000 and June 2001, were nothing more than limitations artificially created and manipulated by PRI and Banco Uno to allow PRI to settle its other clients transactions through Banco Uno at the same time that PRI was settling Paycom's transactions through Banco Uno."

This all seems very familiar too.

Anthony · 12-23-2002

Quote:

Originally posted by Technick@Dec 23 2002, 12:14 PM
The lawsuit makes interesting reading:

"....For example, when Mastercard fined Mintola for chargebacks received in March 2001, Mintola and PRI began electronically debiting Paycom's checking account (via wire transfer) on a regular basis for additional "fines" purportedly assessed by Mastercard for chargebacks received in April, May, June and July 2001. When Paycom inquired about the "fines", PRI represented to Paycom that such additional "fines" had actually been levied by Mastercard against Mintola. Paycom subsequently learned however that these funds which Mintola and PRI were debiting from its account did not represent actual fines which had been levied by Mastercard but, instead, represented "projected fines."

We had exactly the same experience when we used PRI.

"....Moreover, Paycom has alleged that Phillips and Blaugrund made repeated representations to Paycom to induce Paycom to turn over all of its VISA transactions to PRI, including:
(1) Phillips representation shortly after processing began, and then in April and May of 2001, that Banco Uno had placed "volume restrictions" under the Banco Uno merchant account.
(2)Phillips repeated representations, between December 2000 and May 2001, orally and via email, that "more volume" was "coming" or actually available, and that more transactions could be settled through an account PRI called "Centaurus";
(3) Blaugrund's repeated representations, orally and via email, that PRI would hold the VISA transactions sent to PRI by Paycom until Banco Uno would allow them to be settled, and would settle as many of Paycom's transactions that it could at any given time.

Paycom has come to understand however, that the "volume restrictions" to which Banco Uno subjected Paycom over the period between November 2000 and June 2001, were nothing more than limitations artificially created and manipulated by PRI and Banco Uno to allow PRI to settle its other clients transactions through Banco Uno at the same time that PRI was settling Paycom's transactions through Banco Uno."

This all seems very familiar too.

Yeah!

Those fuckers. How much money do they owe us TechNick?

12-23-2002

I dont want to even think about it Tony :angry:

12-23-2002

Quote:

Originally posted by Technick@Dec 23 2002, 12:19 PM
I dont want to even think about it Tony :angry:

Feel free to Pile On! Have your lawfirm call ours, their number is at the bottom of the Press Release. You can interplead our case. Don't let them get away with a dime! It cost us $30 MILLLION... all of which we paid out of our pockets. Several years may pass but we are going to pursue this until we collect.

Chris Mallick
CEO EPOCH

Nickatilynx · 12-24-2002

I'll have them call after Xmass , Chris.

Merry Xmass all

12-23-2002	#2
Winetalk.com Prostate Examiner I quoff fine wine at corkd.com Join Date: Oct 2002 Location: good 'ole USA Posts: 21,018	is IBM = International Business Machines? __________________ why dogs sniff each other butts?

12-23-2002	#5
Winetalk.com Prostate Examiner I quoff fine wine at corkd.com Join Date: Oct 2002 Location: good 'ole USA Posts: 21,018	ick, are you telling us the sharp guy like you took somebody's 6 figures IOU??? I can't beleive it! ;-)) __________________ why dogs sniff each other butts?

12-23-2002	#1
Epoch Members Join Date: Oct 2002 Posts: 21	PRESS RELEASE For Immediate Release: FEDERAL JUDGE RULES IBM MUST DEFEND CLAIMS THAT IT WRONGFULLY RECEIVED AND RETAINED MILLIONS OF DOLLARS DERIVED FROM INTERNET PORN WEBSITES (Los Angeles, California) A U.S. Federal Judge has ruled that IBM must defend claims that it wrongfully received, retained and refused to return millions of dollars derived from the sale of pornographic content over the Internet. The lawsuit brought by Paycom Billing Services, Inc. claims that IBM along with Payment Resources International ("PRI") and its principals Andrew Phillips and John Blaugrund, along with a number of other defendants, participated in a pattern of Racketeering activities involving several different schemes in connection with the processing of credit card transactions related to the purchase of adult-oriented content over the Internet. IBM is alleged to have received, retained and refused to return millions of dollars which Paycom was allegedly defrauded out of by PRI, Phillips, Blaugrund and certain other defendants in the largest of those schemes. Last January, United States District Judge Dean D. Pregerson ruled that PRI, Phillips, Blaugrund and others (including a British processor known as Global Payment Systems Limited ("GPSL")) must defend themselves in Federal Court against allegations of RICO violations, including numerous acts of wire fraud and laundering of monetary instruments to defraud Paycom in connection with the processing of credit card transactions over the Internet. Paycom is claiming tens of millions of dollars in actual cash losses as a result of the alleged fraud. IBM is alleged to have contracted with GPSL to process the transactions which GPSL fraudulently obtained from Paycom, and then to have wrongfully retained the lion's share of the proceeds of those transactions to pay for other, unrelated debts of GPSL and certain merchants other than Paycom to IBM. In a related development, the Los Angeles Federal Court granted judgment on December 20th, 2002 in favor of Paycom against GPSL in excess of $40 million (which is subject to collection). IBM sought to avoid defending Paycom's claims on the basis that IBM's conduct was factually unrelated to the alleged fraudulent conduct of the other defendants. In a ruling dated December 12, 2002, Judge Pregerson denied IBM's Motion to Dismiss and ruled that IBM's alleged conduct was sufficiently related to the alleged conduct of the remaining defendants such that it is appropriate for IBM and the other defendants to be forced to respond to Paycom's claims in the same lawsuit. The entire lawsuit may be found at www.paycom.net/lawsuit.pdf Richard P. Crane, Jr., a former U.S. Attorney and Federal Prosecutor, and his partner at the law firm of Musick, Peeler & Garrett LLP, Dennis M. P. Ehling, represent Paycom. All press inquiries should be directed to Mr. Crane or Mr. Ehling at 213-629-7600.

12-23-2002	#4
Nickatilynx Banned Want to see your own Advertising Here! Join Date: Oct 2002 Location: Vancouver Canada Posts: 15,115	Fuck!!! John Blaugrund....owes me 6 figure too

12-23-2002	#7
Technick Guest Posts: n/a	The lawsuit makes interesting reading: "....For example, when Mastercard fined Mintola for chargebacks received in March 2001, Mintola and PRI began electronically debiting Paycom's checking account (via wire transfer) on a regular basis for additional "fines" purportedly assessed by Mastercard for chargebacks received in April, May, June and July 2001. When Paycom inquired about the "fines", PRI represented to Paycom that such additional "fines" had actually been levied by Mastercard against Mintola. Paycom subsequently learned however that these funds which Mintola and PRI were debiting from its account did not represent actual fines which had been levied by Mastercard but, instead, represented "projected fines." We had exactly the same experience when we used PRI. "....Moreover, Paycom has alleged that Phillips and Blaugrund made repeated representations to Paycom to induce Paycom to turn over all of its VISA transactions to PRI, including: (1) Phillips representation shortly after processing began, and then in April and May of 2001, that Banco Uno had placed "volume restrictions" under the Banco Uno merchant account. (2)Phillips repeated representations, between December 2000 and May 2001, orally and via email, that "more volume" was "coming" or actually available, and that more transactions could be settled through an account PRI called "Centaurus"; (3) Blaugrund's repeated representations, orally and via email, that PRI would hold the VISA transactions sent to PRI by Paycom until Banco Uno would allow them to be settled, and would settle as many of Paycom's transactions that it could at any given time. Paycom has come to understand however, that the "volume restrictions" to which Banco Uno subjected Paycom over the period between November 2000 and June 2001, were nothing more than limitations artificially created and manipulated by PRI and Banco Uno to allow PRI to settle its other clients transactions through Banco Uno at the same time that PRI was settling Paycom's transactions through Banco Uno." This all seems very familiar too.

12-24-2002	#11
Nickatilynx Banned Want to see your own Advertising Here! Join Date: Oct 2002 Location: Vancouver Canada Posts: 15,115	I'll have them call after Xmass , Chris. Merry Xmass all