DO NOT BUY anything from AV123

[Chu Gai]

 

[Chu Gai]

It looks like those shady forces conspiring against MLS all these years have moved onto VA321's former discount outlet.

You mean the Better Business Bureau? Are they having quality and delivery problems?

 

[Stereodude]

You mean the Better Business Bureau? Are they having quality and delivery problems?

Nah, just those underhanded, up to no good, despicable competitors who will do anything to sully their good name on the internet.

 

[Chu Gai]

I didn't realize they were selling in such volume. Must be that Mark's pissed.

 

[Harmon]

I'm not sure, Minus. Maybe Harmon will chime in here. I'll see if I have time tomorrow to give the court clerk a call and see what I can find out.

What an arraignment entails varies somewhat from jurisdiction to jurisdiction, but usually it's just when a Defendant is first provided a copy of the charges against them and given a date to appear back in court with an attorney. In my county, prosecutors don't even go to the arraignments, and for those defendants who haven't made bond their arraignments are conducted via closed circuit TV from the jail.

Guilty pleas on felony charges at an initial arraignment are very rare and are not even allowed in many jurisdictions. (Traffic tickets and misdemeanors yes, but not felonies.) I assume the status conference is for MLS's attorney to meet with the prosecutor and see if they can reach an agreement on what the sentence would be if the defendant pleads guilty. We call those Preliminary Hearing Conferences where I practice, but there is no standardized name.

If no agreement between the prosecution and defense is reached, it will be scheduled for the next stage in the process. Where I am that would be a Preliminary Hearing, but since MLS was charged by grand jury indictment (as opposed to the DA filing an Information) he may not be entitled to a preliminary hearing. In Oklahoma you still get a preliminary hearing after an indictment, but in other states you don't. Just depends on what the statutes in Colorado are in that regard.

Procedures and practices vary from state to state and even county to county, but, regardless of procedure, ultimately the case will end in one of a few different ways: (1) An agreed guilty plea. The prosecution and defense agree on what the sentence will be. Could be probation, could be jail/prison time, could be a mixture of both, and will almost certainly include restitution. Most cases end this way. (2) A blind plea. The defendant pleads guilty without any agreement with the prosecution and the judge decides what the sentence will be. This happens when a defendant thinks (or hopes) he can get a lighter sentence from the judge than what the prosection is offering. Not as common as an agreed plea most places, but still fairly common. (3) A jury trial. You guys know what these are. In my jurisdiction probably somewhere between 1% to 2% of cases actually go to jury trial, and most of those are murders, rapes, child molestations, violent crimes, you get the idea. I'm one of the busiest prosecutors in our office. That's mostly because I prosecute sex crimes, child abuse, and murders. Why such a low percentage going to trial? To use my county for example - We file over 7,000 felonies a year. We have 6 district judges who handle felony trials. We have 26 jury trial weeks a year ... so if every single judge was doing a trial every single jury trial week (which doesn't happen) we could only do 156 jury trials a year (less actually because some trials last more than a week.). That's roughly 2% of the felonies filed a year. Actually, resources are only part of the reason more cases don't go to trial. Most cases really don't need to go to trial. Guilt isn't seriously contested. Defendant is willing to plead guilty. The parties are just wrangling over what a fair sentence is. (4) A bench trial. The judge decides guilt/innocence and punishment if found guilty instead of a jury. Very common for traffic offenses, divorce court, and small claims court, but pretty rare for felony cases. Most criminal defense lawyers know they have a better shot at convincing a jury that their guy is innocent than a judge. (5) Dismissal of the charges by the prosecution or the court. Usually happens when something goes wrong with the case (e.g., a witness changes their story, dies, can't be found, evidence is suppressed because of an unlawful search, etc). Not unheard of, but still pretty uncommon.

Clear as mud?

 

[Chu Gai]

Very clear Harmon and thank you! Is it possible that due to the nature of the crimes committed that as part of the sentencing Schifter can be required to comply with such things as,

• have his passport revoked/turned in until he finishes restitution
• have to liquidate any assets such as his home or personal goods
• be forbidden to have any contact with a personal computer
• be required to no longer have anything to do with the audio business (I read about a guy who was convicted of real estate fraud and was told he couldn't be in that field any longer)

 

[wshuff]

This is just stabbing in the dark, and I didn't even stay at a Holiday Inn Express, but . . .

I doubt that a court would preclude MLS from work in the audio business. His situation is different from the real estate guy you mention, who was prohibited from working in real estate after a conviction for real estate fraud. MLS has been indicted for charity fraud, etc., so if the court were to apply the same sort of penalty, I would presume it would prohibit MLS from engaging in any charitable fund-raising, particularly any that were prohibited by law, but not from work in the audio field.

As a practical matter this stain on MLS from the charity business will probably be his undoing in audio because, who would buy from him after this? Sort of ironic, given that the string of failed audio businesses he left in his wake never stopped him.

 

[Chu Gai]

This is just stabbing in the dark, and I didn't even stay at a Holiday Inn Express, but . . .

I doubt that a court would preclude MLS from work in the audio business. His situation is different from the real estate guy you mention, who was prohibited from working in real estate after a conviction for real estate fraud. MLS has been indicted for charity fraud, etc., so if the court were to apply the same sort of penalty, I would presume it would prohibit MLS from engaging in any charitable fund-raising, particularly any that were prohibited by law.

Well, that's good for TADG then and all those new products. Now come on all you folks that are owed monies. What's stopping you? Start filing those lawsuits and contacting the consumer links I put up earlier. Get in line and do what you can so the money's in your pocket and not his. All he's going to do is line up another sucker to make cabinets if he can while he stiffs the last one and keeps exploiting Danny. He took their money illegally and God willing, they'll be going after him. Now you take your money back from him legally. Whether it comes from him, his wife, or Suzy, what's the difference if it's legal?

 

[wshuff]

Agreed.

How is he exploiting Danny? Does Danny still have a relationship with AV123, or are they just still producing Danny's designs?

 

[MinusTheBear]

There is no long term strategic solutions to 123 and TADG unless it is to go out of business. Lets assess the viability of the company first by looking at some key indicators. How are they going to hold up?

1. Solvency
2. Liquidity
3. Strength of 123/TADG brand and the marketability/customer base
4. Supply
5. Demand
6. Profitablity
7. Long-term stability

 

[Stereodude]

Agreed.

How is he exploiting Danny? Does Danny still have a relationship with AV123, or are they just still producing Danny's designs?

I'd guess they're supposed to be paying him some royalty for each speaker sold that he designed. I'd also guess that they're not.

So does that mean he has or a relationship with VA321 or that they're just still producing his designs?

You tell me.

 

[wshuff]

Gotcha.

TADG made some comment in connection with the LS4 that made me wonder if Danny was still actively working with them, rather than just being another in the line of people left wanting.

 

[Harmon]

Very clear Harmon and thank you! Is it possible that due to the nature of the crimes committed that as part of the sentencing Schifter can be required to comply with such things as,

• have his passport revoked/turned in until he finishes restitution
• have to liquidate any assets such as his home or personal goods
• be forbidden to have any contact with a personal computer
• be required to no longer have anything to do with the audio business (I read about a guy who was convicted of real estate fraud and was told he couldn't be in that field any longer)

If it's an agreed plea just about anything can be made a condition of probation so long as both sides agree. I've seen people banned from a county and even an entire state. Probably not legally enforceable but the defendants don't know that.

Given that disclaimer, I think I can make an educated guess about each one:

1. Passport - I've seen passports surrendered as a condition of being on bond awaiting trial, but never seen it done after sentencing while someone is on probation. My guess is a no on this one absent some prior history of fleeing the country to avoid legal obligations.

2. Liquidating assets - If restitution can't be made before or at the time of plea, defendants usually have a monthly amount they have to pay. In order for it to be a violation of probation or contempt of court it has to be a "willful" failure not to pay ... so while I've never seen an order to liquidate assets in a criminal case, if the defendant has substantial assets and isn't making their restitution payments that's likely to be deemed a "willful" failure to pay and they go to jail. The court isn't going to make someone become homeless to pay restitution, but at the same time they aren't going to be able to live in a million dollar house and claim to be too poor to pay.

3. Contact with a computer - Possible but not likely. You sometimes see conditions like this in computer child porn cases. Never seen it in a financial crime.

4. Audio business - Again technically possible, but I doubt it. The concept is valid. For instance I've seen dirty cops prosecuted where a condition of probation was not to work in law enforcement. I've seen nursing home workers who were abusive to patients being barred from working in a nursing home as a condition of probation, but the audio community isn't going to be seen as vulnerable victim needing special protections. As someone mentioned the crimes relate to charity fraud. A condition barring solicitation of donations for charitable purposes is much more likely.

Also, prosecutors and judges aren't usually going to try to prevent people from engaging in gainful employment. We want people working so they can pay their restitution, court costs, and contribute to society so barring him from working in the industry he's spent his adult life in or from using a computer or traveling would probably be viewed as counter-productive to the goals of making people into productive citizens.

Hope that helps answer your questions.

 

[mhawker]

Plea bargain for sure.... and a pair of wonderful, exciting, awe inspiring RSLII's for her Honor- in the finish of her choice of course.

Hey, he's sick, remember (If it's not the stress, that is. ). He can't help himself.

 

[Chu Gai]

Your replies always help with my questions, Harmon, but then I have more questions. This whole thing with restitution I would think would have to involve coming up with the 180K that's part of the indictment plus maybe some penalties plus court costs. Let's say the total is $200K. So, what kind of a payment plan can they set up? I kind of doubt anybody is going to lend him the money, even family, based on his track record of stiffing people left and right. If it's something like paying that amount over 10 years, then he's got to come up with $1,666.67 each month. Let's say through some sort of miracle he's able to do this running the business legit. Now, let's also say that a few lawsuits for monies owed start coming in and he starts losing the civil suits. $1,500 here, $6,000 there, and maybe a rainmaker lawsuiit for a few hundred thousand. And maybe enough complaints for fraudulent business practices make their way to the State Attorney General's office and they decide to pull his license to operate in Colorado. Or if the IRS both state and Federal find problems with the income reporting and levy taxes and fines.

Any one of the above scenarios is within the realm of possibility. If that's the case, does the settlement he'd make with the courts take prececence over the other claims? If it turns out he can't make those kind of payments, could the state renegotiate the terms to say 20 or 30 years? At what point does the state possibly just throw him in jail assuming he was able to avoid jail time?

 

[Chu Gai]

Agreed.

How is he exploiting Danny? Does Danny still have a relationship with AV123, or are they just still producing Danny's designs?

Well Shifty has a way of using people's names that suggests to readers they're still doing business with him. For example back when he was talking HR upgrades he was dropping Mark Seaton's name a lot and sometime later, Seaton had written he hasn't had a business relationship with Shifty for quite some time. A general rule of thumb I've found is that if people who used to do business with him are no longer posting such as Seaton, Santiago, and others, it's because they haven't gotten paid. Whether that's because it's amounts owed for work done, product delivered, or royalties, we're not talking about a couple of thousand. Generally it's because it's well over something like $50K to beyond the six figure mark.

Now, if you're Danny, what do you do? You know the guy owes you big time and you know he hasn't been paying you or if he's been making payments, you'll be 60 years old before you're finally paid off. If you're not going to sue him, do you work on new designs for MLS to market and sell knowing full well he won't pay you for those in addition to what he owes you? If there are LS-4's coming down the pipe or other speakers, I'd think Danny would just develop them and sell them himself or in partnership with someone else who won't screw him.

 

[wshuff]

Thanks for the info, Chu. Look forward to any additional court updates.

 

[T2T]

I really hope Danny isn't working for Mark - other than collecting royalties for the LS series of speakers. From the looks of things, Danny's products do a fair share of self-promotion and Danny doesn't need to be tangled up in the VA321 woes.

 

[Harmon]

Your replies always help with my questions, Harmon, but then I have more questions. This whole thing with restitution I would think would have to involve coming up with the 180K that's part of the indictment plus maybe some penalties plus court costs. Let's say the total is $200K. So, what kind of a payment plan can they set up? I kind of doubt anybody is going to lend him the money, even family, based on his track record of stiffing people left and right. If it's something like paying that amount over 10 years, then he's got to come up with $1,666.67 each month. Let's say through some sort of miracle he's able to do this running the business legit. Now, let's also say that a few lawsuits for monies owed start coming in and he starts losing the civil suits. $1,500 here, $6,000 there, and maybe a rainmaker lawsuiit for a few hundred thousand. And maybe enough complaints for fraudulent business practices make their way to the State Attorney General's office and they decide to pull his license to operate in Colorado. Or if the IRS both state and Federal find problems with the income reporting and levy taxes and fines.

Any one of the above scenarios is within the realm of possibility. If that's the case, does the settlement he'd make with the courts take prececence over the other claims? If it turns out he can't make those kind of payments, could the state renegotiate the terms to say 20 or 30 years? At what point does the state possibly just throw him in jail assuming he was able to avoid jail time?

The questions are getting tougher.

I believe the indictment actually alleges $150k was embezzled. About $30k made it to the intended recipients.

The rest is my experience and may be similar or may be completely different than how they do things in Boulder, Colorado:

I rarely tack on a significant fine in addition to the restitution unless the defendant has more than enough money to pay back all of the restitution. I don't want to delay restitution getting to the victims by imposing other fines/fees. Also, court costs here are usually only a few hundred dollars. No idea about Colorado.

I typically schedule restitution payments so that the entire amount is paid well within the term of probation because once the probation ends you lose your biggest hammer over them to pay. So if it's going to take someone 5 years to pay, you want to give, at a minimum, a 5 year suspended sentence. (Here after probation ends the state still has a contempt of court option, but that only carries up to 6 months in jail and they would be entitled to a jury trial on the contempt rather than just a revocation hearing in front of a judge on the probation violation so it's not as desirable.)

Sentences can (and often do) include both jail/prison time and probation. That's commonly called a split sentence. For instance, a person could receive a 10 year sentence with the first 3 years in prison and the last 7 years suspended.

If someone isn't making restitution, the state files a motion to revoke the defendant's probation. It's ultimately up to a judge whether the failure to pay was "willful" or not. All sorts of things could go into that factual determination including the defendant's other financial obligations, his payment history, his assets, etc. If a defendant is able to pay $1,000/month today, it doesn't necessarily mean he will be able to pay $1,000/month in the future, but it's typically his burden to show why he's not paying and that his failure to pay is not "willful".

The term of probation typically cannot be extended. If it's not all paid prior to the expiration of the probationary term, typically the state will file an application to revoke. Even if it's on the last day of probation, you can still revoke the full original term. If the person is making payments but has missed some payments or not made the full amount each time but they appear to be trying and their probation is about to expire, the state sometimes files an application to revoke but the parties agree to put off the revocation hearing to allow them more time to pay. This is usually only done for a few months at most.

 

[Chu Gai]

I really hope Danny isn't working for Mark - other than collecting royalties for the LS series of speakers. From the looks of things, Danny's products do a fair share of self-promotion and Danny doesn't need to be tangled up in the VA321 woes.

I only hope that whatever monies Danny is owed find their way to his bank account. How he plays that is up to him but speaking only as myself, I'd be looking to get fully caught up before I entertained any thoughts of investing time and resources into AV451. MLS seems to have forgotten all the folks besides customers that made him.