Anatomy of a Scam Investigation, Chapter Eleven

[Wondering what's going on here? Check out the Chapter Index on this series.]

The wheels turn slowly, but they turn.

Congratulations to the great state of North Dakota, the first state — so far as I have been able to determine — to take action against David and Branden Bell's UST Development mail fraud enterprise. California (and federal) officialdom ought to be embarrassed that North Dakota — with far fewer resources, and with its citizens targeted far later in the game — took action first. Pull your thumbs out of your asses, people.

Popehat reader Ray alerted me that the North Dakota Office of the Attorney General has issued a cease and desist order (and notice of right to request a hearing on the order) to UST Development, its various entity aliases and alter egos, and to David Bell individually, accusing them of consumer fraud. The Attorney General's press release, and news stories discussing it, are available on the internet and are quickly contributing to UST's and David Bell's overwhelmingly negative web presence. Good job, North Dakota.

Ray, the tipster who pointed me to this, reports that his city government in Kansas has received three invoices from UST. This is not surprising. I continue to get tips from people across the country — both at private businesses and public entities — who have received these invoices — from a private business in Kansas, from a school district in Minnesota, from a private business in Louisiana. I suspect that civil discovery — or a search warrant — will reveal that David Bell has purchased some mailing lists of some sort, possibly "reload lists" of individuals and businesses that have fallen for scams before.

There are several things that are notable about the latest iteration of the UST scam invoice. First, notice that Bell and UST have sent them out in 2012 — as I said last time, this establishes without cavil that Bell and UST continue to send the invoices knowing that recipients find them deceptive, knowing that they violate federal law, and knowing that multiple consumer complaints have been lodged against them. Notice also that UST has transitioned to a new Post Office Box — Box 970 in LaVerne, California. Hopping from address to address and from box to box is typical of mail fraud schemes. Notice that the language has shifted slightly again. The gibberish non-disclaimer disclaimer remains, in an even more deceptive form: "Thank you for your business, this warranty covers preventative maintenance on all telecom systems equipment, including, telephone instruments, switches, routers, and cabling." Query: how does one sell a warranty (something usually invoked when something goes wrong) for preventative maintenance? Also, how does UST — a California entity the various iterations of which have gone bankrupt — plan on providing services in Kansas and Minnesota and Louisiana? They've also added the deceptive "Term: Net 10 Days," which typically denotes that a business expects payment in 10 days for services already rendered, usually implying that this is under a preexisting agreement with a vendee. UST and Bell have simply removed some deliberately misleading language (like the suggestions of service on multiple occasions, or the suggestion that the invoice is past due) with new and different deliberately misleading language. This, too, is typical of mail fraud schemes.

Let's hope some additional states step into the act, and let's hope California and the feds step up, as they should have long ago.

Meanwhile, David Bell's pretrial hearing in his criminal case was continued yet again until April 19,2012, probably because he retained a new attorney. Such delays are typical.

I'll be seeking a comment regarding the North Dakota cease and desist order through Mr. Bell's new attorney. I note that Denis Baranowski, an attorney who used to be the registered agent for service of process for UST Development, Inc., has resigned from that role. That was the prudent and ethical thing do to, and I commend him for it. I respectfully suggest that he may want to review his role as registered agent for service of process for California Consultant Group, Inc. with care, as it appears to be another UST/Bell entity, as we discussed in Chapter Nine.

This investigation will continue. Your tips remain welcome. See you soon.

Edited to add:

Here's part of the letter I sent to the gentleman I believe is his new attorney:

I write because I infer that you are the attorney who appeared this week for David Bell in a criminal matter in San Bernardino County Superior Court. If I have the wrong [attorney name], please ignore this inquiry.

Since Mr. Bell, through his entity UST Development, Inc., sent what I believed to be a fraudulent invoice to my company, I have been writing an investigative series regarding his entities and what I believe to be his mail fraud scheme. I write today to seek his comment — or, if you wish, yours — regarding recent developments in that scheme. You can find an index of what I have written here: http://www.popehat.com/2011/09/25/anatomy-of-a-scam-chapter-index/

Specifically:

1. Does Mr. Bell have any response to the North Dakota Attorney General's Office issuing a Cease and Desist Order to UST Development, and to him personally, based upon apparent consumer fraud? Will the UST entities — and Mr. Bell — make any adjustments to their business practices based upon that order? Will they contest it?

2. The UST entities, and Mr. Bell, have continued to send their "preventative maintenance" invoices in substantially the same form even after the Better Business Bureau, among others, have informed them that the invoices violate, for instance, 39 U.S.C. section 3001. Does Mr. Bell have any comment on whether he believes his invoices comply with 39 U.S.C. section 3001, and if so, the basis for that belief?

3. Two UST entities — UST Development, Inc. and UST Dry Utilities, Inc. — have been in bankruptcy, as have Mr. and Mrs. Bell personally. Yet the UST entities are sending invoices across the United States. I have received invoices from tipsters as far away as Louisiana. Would Mr. Bell care to comment on how he, and his entities, are able to provide "preventative maintenance" services in other states? Would he like to comment on precisely what those services would entail, and exactly who would provide them? Would he like to comment on precisely what services customers are entitled to if they pay "UST" the amount listed on the invoices?

4. Mr. Bell's latest invoices are under the name "UST," as opposed to past invoices that referenced UST Development, Inc. Is UST a legal entity? If so, in what form, and in what jurisdiction?

5. Is Mr. Bell personally affiliated with "California Consultant Group, Inc.", a California entity using the same agent for service of process he has used and the same address he has used? What is the business of that entity? Is it affiliated with Mr. Bell's "preventative maintenance" invoices?

Any comment from Mr. Bell, his affiliates, or you would be welcomed, and I will be happy to print any response from Mr. Bell to anything I have written.

Thank you,

etc.

Last 5 posts by Ken White

Comments

  1. christina says

    I'd love to know how much money they've made so far off this scam… their office is right down the street from me, I wonder how they pay the lease.

    So happy it's finally catching up with them, although if it weren't for Pedal Spin Studio I wouldn't be surprised if they took off to Mexico.

  2. louise says

    Looks like Pedal Spin is adding a fourth location – wonder what is "greasing the wheels"..

  3. Hasdrubal says

    Providing tech service nationally is a pretty common thing, actually. Everybody from giants like Cisco and IBM down to mom and pop shops do the same thing: Contract with local shops and independent contractors.

    Providing guaranteed blanket service for any telecomm and network equipment, that would light up my BS detector. Avaya is completely different from Nortel and they're both not just different but built from a different paradigm than Cisco, and then you have all those small time vendors that small businesses like to go with making life really interesting. I would expect a list of systems they support, though I suppose saying "We Support ALL the systems!" could be taken as an advertising white lie…

  4. says

    Well, as I've said before, one of the best proofs of fraudulent intent is a comparison of the face of the invoice to the claim that it's a solicitation. What type of solicitation for business — in an industry that is packed with competitors — includes no ad copy whatsoever about why you should choose the sender's services over competitors?

  5. Joe says

    Popehat reader Ray "altered" me that the North Dakota Office of the Attorney General has issued a cease and desist order . . . . . .

    Altered you Ken? I hope not – we like you just the way you are ;-)

    BTW – nice job on the series. Looking forward to seeing this guy go down.

  6. Joe says

    Well David Bell is not the only one coming up with creative ways to try to scam legitimate businesses. Pardon my plagarism of your now famous quote. See below –

    From: Allen Zhang [mailto:[email protected]]
    Sent: Monday 1:57 AM
    Subject: URGENT xxxxxxxxxsystems Brand Registration Confirmation
    Importance: High

    (It's very urgent, Please transfer this email to your CEO or appropriate person, thanks)
    Dear CEO/Principal,
    We are the department of Asian Domain Registration Service in China. I have something to confirm with you. We formally received an application on October 24, 2011 that a company which self-styled "Aso International Ltd" were applying to register "xxxxxxxxxsystems" as their Net Brand and following domain names:
    xxxxxxxxxsystems.asia
    xxxxxxxxxsystems.cn
    xxxxxxxxxsystems.co.in
    xxxxxxxxxsystems.com.cn
    xxxxxxxxxsystems.com.tw
    xxxxxxxxxsystems.hk
    xxxxxxxxxsystems.in
    xxxxxxxxxsystems.net.cn
    xxxxxxxxxsystems.org.cn
    xxxxxxxxxsystems.tw
    After our initial checking, we have found the name were similar to your company's, so we need to check with you whether your company has authorized that company to register these names. If you have authorized this, we will finish the registration at once. If you have not, please let us know within 7 workdays, so that we will handle this issue better. Out of the time limit we will unconditionally finish the registration for "Aso International Ltd".
    Best Regards,
    Allen Zhang
    Tel: +86-551-5223-174 || Fax: +86-551-5223-175
    10/F, Jindi International Building, No.588 MaAnshan South Road,
    Baohe District, Hefei. China

    My response to this pathetic scare tactic to extort money from a legitimate business below:

    From: Joe
    Sent: Monday, 9:19 AM
    To: '[email protected]'
    Subject: RE: URGENT xxxxxxxxxsystems Brand Registration Confirmation

    Allen,

    I find it unusual that ASO International, a Tokoyo based company that manufactures dental and medical devices would be interested in obtaining domain names in countries where they (1) do not currently do business and (2) would even consider company domain names which bear no resemblance to their name, and (3) are in a completely different line of business. Last time I checked software and dental/medical devices are two entirely different industries.

    I have found exactly 2 alphabet letters in common between ASO's name and ours. Unfortunately English is not your only problem. After a quick Google search your SEO domain name scam floated to close the top of the list. You must not be trying hard enough.

    It would appear you research companies and attempt to find those who do not have domain names registered in other countries and then you approach those companies in an effort to “extort” money out of them to prevent the domain names from “supposedly” being assigned to someone else.

    I call it extortion – because that’s what it is. And, I find your pathetic attempt of extortion both inappropriate and distasteful. I will NOT forward this to our CEO. In other words “Snort my Taint”.

  7. Rich Rostrom says

    Good to see a blow struck against these vermin. If they are stupid enough to send another invoice to North Dakota, what would be the legal consequences? Could ND find them in contempt, extradite them, and lock them up?

    Also, is there any hope of getting similar action from other, more populous states? Ohio, say, or Texas? Or even Washington or Kansas?

    I am just starting out on a similar quest to bring down ScienceLab.com, a scam operation out of Houston. IANAL, but I have lots of time on my hands to make them miserable.

  8. Talisker says

    I can sort of understand why he keeps on running scams; he probably doesn't know how to do anything else, and it's easy money if you have no conscience.

    What absolutely baffles me, though, is why he's keeping on with the exact same scam with the same company names and the exact same bullshit services — I don't know how you all operate, but if I ever get around to starting up *my* fraudulent racket ("Invoice for warrantied preventive taint maintenance; 10% discount and a free can of polish for payment within 15 days"), once I start to get some serious pushback from government agencies, internet bloodhounds, and the like, I'll change things up to something that can't be googled in under four seconds.

    David Bell is clearly no Norman Einstein.

  9. says

    Talisker: Well, you do have to keep in mind that the "criminal mastermind" thing really is a trope of fiction. As has been noted by others – most criminals are just not that bright.

  10. doug says

    he is not in jail yet. so he keeps on using the same scam. its not hot enough yet. maybe he likes the chase, who knows why he hasnt changed his MO.

  11. IGotBupkis, Noter of the Obvious says

    >>> Pull your thumbs out of your asses, people.

    Wrong extension from the torso that's stuck up there, sirrah!

  12. S. Calliope says

  13. Joe says

    Another posting on RipOff reports today that UST Telecom is still sending these fake invoices out as of TODAY. Clearly this guy has no intention of stopping until someone throws his sorry ass in jail.