UPDATED: Mark L. Schifter, PLEADS GUILTY to suspicion of charity fraud

[Sevenfeet]

I have no idea but if people choose to do nothing, that would increase the odds of leniency in the sentencing with respect to any incarceration and its duration. If you feel that leniency is warranted, then do nothing. There have been other cases the CO AG has prosecuted that involved people obtaining money under false pretenses and those individuals did or are doing jail time. As to him not having a previous criminal record, I cannot comment on it because I've never run a CBC (Criminal Background Check) on him.

You're assuming that judges can't read or do their jobs. The Colorado AG's office provide the judges with a complete opinion of the case, the victims and damage. It's always been this way. Only in the last decade or so since the Supreme Court upheld that victims could have input in sentencing (mostly to vent at heinous criminals at sentencing) did things change to the point where now we have a say in influencing the judge. And sometimes the victims can provide an insight to the case that the AG's office can't do. But in talking with my brother who is an attorney and preparing to run for judge here, judges see a lot of these cases and have a pretty good idea on what to do. They don't want to be overtuned on appeal.

 

[Stereodude]

I wonder if they will fill out these forms brought forth by the CO AG?

Yeah probably with an explanation how it wasn't Mark's fault (the whole bio-rhythms thing), they don't consider themselves victims, and how the court should let him off with a slap on the wrist.

 

[Stereodude]

Guys,

Please excuse my thought but I think we should respect others' opinions/comments regarding this.

As far as I'm concerned, it's perfectly alright if someone decided not to bother filing out that form. It's their choice so there is no need to jump down their throat (figure of speech) due tho their decision.

Different people...different ways of doing things.

Doesn't that exclude the amount they contributed to the raffles for from the restitution amount? Effectively giving MLS a second chance to screw the charities / raffle recipients.

That's what the Victim Impact Statement form says:

Crime costs in many ways. Without your statement, we cannot ask the judge for restitution. The law says that the court shall order defendant to make FULL RESTITUTION to the victim (and/or victim’s immediate family) for actual damages.

To me, that's just hard to fathom that they don't want Mark to have to pay restitution on their raffle contributions.

 

[Sevenfeet]

This must be an awkward time for some people or maybe not? There were a few that were staunch defenders/apologists of MLS that spread and enabled his charitable actions and good nature over the years . I wonder if they will fill out these forms brought forth by the CO AG?

Well, I'm probably considered by many to one of those apologist and people can think of me what they want. It's hardly an awkward time. Most of us are just hurt, angry and sad. That being said, the decision to fill out the form is a personal one. I'm still looking at the document and I have to go back like Seth and review how much I lost in Paypal donations. I was probably a small amount compared to some I know but money is money and I have to make my own decision.

 

[Chu Gai]

I haven't formed an opinion on whether or not Mark should receive additional jail time. He has already served a short amount of time during the bail process which makes me think that unlike another comment that was made by someone else, it's unlikely Mark has hidden money somewhere. If he did, I doubt he would have sat more than 24 hours in the hole.

Well, in the end the only opinion that counts is going to be that of the judge. As to Mark having money hidden, it's a question I've tossed around a bit. It's not impossible. My back of the envelope calculations as to what he's absconded with over the years suggests that an amount upwards of 5-6 million is not impossible. That's in addition to the amount he paid himself, say $100K, as a salary (my understanding is that his wife & SuzyQ received comparable amounts), plus the side profits he made selling receivers and such (Graham Company), plus the money he got buying the products directly and reselling them to AV451, plus commissions he received from selling product, etc. If he's got money, my guess is it's overseas tucked away somewhere. Hopefully for him it better not be under the direct control of Ms. Khabarovski, because then you can kiss it good bye.

BTW, I've served on two juries for criminal assault cases in recent years and served as jury foreman both times.

The conversation I started was more a legal issue as to what the odds that Mark would serve jail time based on what he pled guilty of, sentencing guidelines of Colorado, other factors including the age/health of the defendant, the amount of money involved, living space availability in the minimum security system (I can't imagine that he would go to "real jail" but you never know). I wasn't asking "should Mark go to jail" because everyone has an opinion on that and most of that has already been told here and elsewhere.

The sentence that's meted out to Mark depends to some extent on where the case is held. There are area of CO where the sentencing tends to be on the milder side. Like Boulder. OTOH, in Denver, the judges tend to be more harsh if you will. Perhaps there'll be enough outrage over the Hurricane Katrina thing in the judge's eyes.

Finally, I had assumed that Mark would enjoy "first offender" status since there had been nothing disclosed so far that he had ever committed a felony crime. The reason I assumed that is because it is difficult these days to hide facts like this especially considering that the victims in this case are savvy Internet users who have financial means. If this or something like it had happened before, I think somebody would have run across it in a Google search. Most of the state AGs' databases of cases is available online. For example, it wasn't hard for me to find out that a conman who had swindled my father-in-law out of his life savings over the past several years had a criminal record (in fact the same Colorado AG's office is prosecuting him now).

I haven't found anything in my digging but then I've not paid for legal database searches. I can tell you he's lost a couple of small claims matters and was sued successfully in California for 100K. Those are civil matters though.

 

[Stereodude]

I was probably a small amount compared to some I know but money is money and I have to make my own decision.

I thought mine was a small amount until I went and added it all up. It turned out to be more than 3x larger than I estimated.

 

[Chu Gai]

You're assuming that judges can't read or do their jobs. The Colorado AG's office provide the judges with a complete opinion of the case, the victims and damage. It's always been this way. Only in the last decade or so since the Supreme Court upheld that victims could have input in sentencing (mostly to vent at heinous criminals at sentencing) did things change to the point where now we have a say in influencing the judge. And sometimes the victims can provide an insight to the case that the AG's office can't do. But in talking with my brother who is an attorney and preparing to run for judge here, judges see a lot of these cases and have a pretty good idea on what to do. They don't want to be overtuned on appeal.

No, I'm saying that the statements are taken into consideration as well as what the AG provides as well as his defense attorney. They're not just for show.

 

[Sevenfeet]

Well, in the end the only opinion that counts is going to be that of the judge. As to Mark having money hidden, it's a question I've tossed around a bit. It's not impossible. My back of the envelope calculations as to what he's absconded with over the years suggests that an amount upwards of 5-6 million is not impossible. That's in addition to the amount he paid himself, say $100K, as a salary (my understanding is that his wife & SuzyQ received comparable amounts), plus the side profits he made selling receivers and such (Graham Company), plus the money he got buying the products directly and reselling them to AV451, plus commissions he received from selling product, etc. If he's got money, my guess is it's overseas tucked away somewhere. Hopefully for him it better not be under the direct control of Ms. Khabarovski, because then you can kiss it good bye.

The sentence that's meted out to Mark depends to some extent on where the case is held. There are area of CO where the sentencing tends to be on the milder side. Like Boulder. OTOH, in Denver, the judges tend to be more harsh if you will. Perhaps there'll be enough outrage over the Hurricane Katrina thing in the judge's eyes.

I haven't found anything in my digging but then I've not paid for legal database searches. I can tell you he's lost a couple of small claims matters and was sued successfully in California for 100K. Those are civil matters though.

Most of that money is likely gone (spent). It's possible that there is money somewhere. But I can't imagine that he would have spent more than 24 hours in the hole if he had more resources. After all, his lack of resources is likely what started the raffle criminal snowball.

One thing I forgot in the dealing with my father-in-law's finances is that I did have access to legal databases since my wife is a grad student. But I do remember that the most damning information in our case was sitting in the Texas AG's database for anyone to see.

 

[Sevenfeet]

The sentence that's meted out to Mark depends to some extent on where the case is held. There are area of CO where the sentencing tends to be on the milder side. Like Boulder. OTOH, in Denver, the judges tend to be more harsh if you will. Perhaps there'll be enough outrage over the Hurricane Katrina thing in the judge's eyes.

Agreed.

I haven't found anything in my digging but then I've not paid for legal database searches. I can tell you he's lost a couple of small claims matters and was sued successfully in California for 100K. Those are civil matters though.

Interesting.

 

[Chu Gai]

Most of that money is likely gone (spent). It's possible that there is money somewhere. But I can't imagine that he would have spent more than 24 hours in the hole if he had more resources. After all, his lack of resources is likely what started the raffle criminal snowball.

One thing I forgot in the dealing with my father-in-law's finances is that I did have access to legal databases since my wife is a grad student. But I do remember that the most damning information in our case was sitting in the Texas AG's database for anyone to see.

You could be right about the money being spent, but let me propose an alternative scenario.

MLS made a lot of trips overseas. He had a mistress whom I fondly refer to as Ms. Khabarovski. He spent lavishly upon her and her family buying among other things, clothes, a fur coat, two cars (used), a small house/apartment for her folks, and a boob job for her. From speaking with people who were close with MLS, he often spoke about marrying her and hoped to have children with her.

Now, his wife by now I would assume has learned about this and other affairs/dalliances/hookers, etc. he has been involved with. If we grant the premise above, it's entirely reasonable that MLS was squirreling away money for years in some foreign account which he has hidden from people here. Like his wife. She can't be happy with the way things have turned out. The house is facing foreclosure as he's delinquent in both his primary and secondary mortgages. The only source of income, and that includes hers, is gone. If you were MLS, would you tell her, "Oh honey. Babycakes. Don't worry. I've got $X hidden overseas."? MLS is all about MLS. He cares nothing for friends, family, or business associates.

So, in my eyes, I cannot discount the possibility that he's got money somewhere that only he knows about and that there's no record of it here for the authorities, and that includes the Department of Revenue & IRS, to tap into.

 

[Sevenfeet]

You could be right about the money being spent, but let me propose an alternative scenario.

MLS made a lot of trips overseas. He had a mistress whom I fondly refer to as Ms. Khabarovski. He spent lavishly upon her and her family buying among other things, clothes, a fur coat, two cars (used), a small house/apartment for her folks, and a boob job for her. From speaking with people who were close with MLS, he often spoke about marrying her and hoped to have children with her.

Now, his wife by now I would assume has learned about this and other affairs/dalliances/hookers, etc. he has been involved with. If we grant the premise above, it's entirely reasonable that MLS was squirreling away money for years in some foreign account which he has hidden from people here. Like his wife. She can't be happy with the way things have turned out. The house is facing foreclosure as he's delinquent in both his primary and secondary mortgages. The only source of income, and that includes hers, is gone. If you were MLS, would you tell her, "Oh honey. Babycakes. Don't worry. I've got $X hidden overseas."? MLS is all about MLS. He cares nothing for friends, family, or business associates.

So, in my eyes, I cannot discount the possibility that he's got money somewhere that only he knows about and that there's no record of it here for the authorities, and that includes the Department of Revenue & IRS, to tap into.

These are all good points and I've heard some of these "bedtime stories" over the past year. The only flaw in the argument is that if Mark thinks that his alleged mistress is going to stay true to him with some stash of cash waiting for him after he springs the proverbial coop, then he is truly a fool.

And again, any money spent on said mistress, family, luxuries, etc is probably sunk. Even if there were cash, people who aren't used to having it tend to spend through it.

 

[m-fine]

If you do have money over seas, you would definitely sit in jail for a few weeks before you tap into it and alert your wife, prosecutors, the IRS, and everyone suing you to it's existence. You carefully pick your time and then slip out of the country.

My guess is he was forced to turn over his passport as a condition of bail, so he will probably have to wait for sentencing to ask for it back. If the prison term is short as most of us expect, he could have his passport back in a few months. Until then he would be a fool to try and access any money that may or may not be stashed. I think if you had time to think it through, most of us would be willing to sit in a club med jail for a few weeks or even months to protect a large nestegg, especially given your severly restricted earning potential post indictment.

 

[Chu Gai]

Sure, but what if she isn't the one who knows where the cash is?

 

[Sevenfeet]

Sure, but what if she isn't the one who knows where the cash is?

True, but keep in mind that is is much harder to hide overseas money than it used to be unless he has cash in a shoebox somewhere (not safe). Laws passed since Sept. 11 and recent laws to track down wealth of individuals hidden overseas give law enforcement agencies much more powerful tools than they ever had before. And I'm sure that the AG's office has been made aware of his lifestyle during the investigation.

 

[m-fine]

These are all good points and I've heard some of these "bedtime stories" over the past year. The only flaw in the argument is that if Mark thinks that his alleged mistress is going to stay true to him with some stash of cash waiting for him after he springs the proverbial coop, then he is truly a fool.

And again, any money spent on said mistress, family, luxuries, etc is probably sunk. Even if there were cash, people who aren't used to having it tend to spend through it.

The only way the mistress stays with him is if she needs him to get to the cash. Mark was not an idiot. If he has/had any secret stash of money, I doubt he gave anyone else access to it. People who squirrel money away like that are usually selfish, paranoid, and control freaks. Mark knew money was his power, his "generosity" was his power over his mistress and his customers, it is highly unlikely he gave the keys to that away.

 

[m-fine]

True, but keep in mind that is is much harder to hide overseas money than it used to be unless he has cash in a shoebox somewhere (not safe). Laws passed since Sept. 11 and recent laws to track down wealth of individuals hidden overseas give law enforcement agencies much more powerful tools than they ever had before. And I'm sure that the AG's office has been made aware of his lifestyle during the investigation.

There are still plenty of countries that have bank secrecy and who do not cooperate with the US government on financial crimes with no link to terror. I personally know of two individuals who have successful kept much larger sums of money hidden for years, both post 9/11, and both were involved in larger, higher profile crimes involving the FBI and federal prosecution, not a local AG. If Mark hid money in Russia, parts of Africa, Luxemburg, or certain Carribean islands, it would be near impossible for the cops in Colorado to find it, let alone get their hands on it.

 

[Sevenfeet]

There are still plenty of countries that have bank secrecy and who do not cooperate with the US government on financial crimes with no link to terror. I personally know of two individuals who have successful kept much larger sums of money hidden for years, both post 9/11, and both were involved in larger, higher profile crimes involving the FBI and federal prosecution, not a local AG. If Mark hid money in Russia, parts of Africa, Luxemburg, or certain Carribean islands, it would be near impossible for the cops in Colorado to find it, let alone get their hands on it.

Maybe, but now we're getting into that whole Occum's razor thing. Keep in mind how AV123 fell apart. Here's a more likely scenario. The whole AV123 thing at first worked really well. The products resonated with customers and the business grew rapidly. It was also very profitable to Mark. There's no crime in that, but some people can't handle lifestyle changes like this and wind up spending all kinds of money in an unsustainable manner. Combine that with the fact that AV123 had operational problems from the beginning. Just because you understand how to be an entrepreneur doesn't mean you are good with operational controls, inventory management, planning and forecasting and accounting.

The last thing Mark wanted was the merry-go-round ride to end, as it were. But entrepreneurs by their nature make bets on their business and usually aren't planning for a rainy day when the economy turns or deals don't pan out. You think if you've been successful this year, it will always be this way. That worked for a while but the problems surfaced, big and small. We all know them so I don't have to rehash them here. But fast-forward a few years and AV123 is bleeding money based on bad strategic decisions, operational errors and more. Then the Great Recession hit. Mark finds himself using charity money to float obligations while he hustles the next deal. Whether the charity idea was originally a scheme to float his problems or it just was a convenient money pot to steal from is immaterial. Once he started, he couldn't stop and things only got worse for everything around him.

The idea that somehow he's squirreled away a ton of money while his life is crashing around him, both personally and professionally makes no sense. You want these problems to go away, especially once you catch wind that the Colorado AG is looking into your actions. If you had 5 million dollars somewhere, don't you think you'd use it to solve a $250,000 hole you were under criminal investigation for? Wouldn't you use that money to keep your international reputation from being trashed, not to mention jeopardizing dozens if not hundreds of friendships, partnerships and family ties? Again, you want the merry-go-round ride to continue, not collapse upon itself.

I've seen similar behavior in my own extended family. My brother-in-law is a serial entrepreneur like Mark and is always living for the next major deal. He built a successful mortgage company on top of the sands of the subprime market several years ago. You already know where this ended up. Like Mark, he spent lots of money on material things he enjoyed (specifically a house on a noted PGA country club). Like Mark, he was dynamic in personality but poor in operational controls of his own company (despite having a Harvard Business School educated finance whiz for a wife...he wanted her as a traditional wife, not one involved heavily in his businesses). 4 years ago I sat across from him at dinner after he was explaining his business success and I asked him "so what do you do when the economy turns?". I basically got a blank stare back as if the thought had never occurred to him because it hadn't, really. Last year his business collapsed as his largest investor got spooked and moved in to take control of his company. He was lucky he wasn't sued or worse because that could have easily happened. He and his wife are now looking to sell the country club house and their other real estate assets and downsize since they can no longer make the payments.

 

[Hugh-Melody]

R,

I need to keep my mouth shut so my attorney won't kick my *&^%.

I can say this much though, that $250K number is way below the real $ lost to Schifter.

 

[MinusTheBear]

History tells us AV123 was not the first business he has run into the ground.

 

[rotorooter]

All this conjecture about MLS having a stash somewhere. Why did he have to rip off most of you then? Get real. This guy was living fast and loose for years.

Fill out the impact statements. Even if 1 in 5 are received it can still sway the court. I think the words in your statements will hold more sway with the judge than the amount of money you've lost. Words have meaning.