Anatomy of a Scam: Chapter Seven
[Wondering what's going on here? Check out the Chapter Index on this series.]
It's time for another chapter of my discussion of how to investigate a scam, using UST Development and its principals as an example.
I've gotten sick of repeating all the prior chapters, so I've put them in an index post. Here it is: Index of "Anatomy of a Scam" Chapters.
In this chapter, I'm going to talk about two things: follow-ups and criminal records.
In Chapter Two I talked about the importance of a methodical and organized approach to internet searches. Unless you're a robot, any methodical search — especially one yielding lots of data — can be tedious and very time-consuming. As a result, fatigue and boredom can lead to mistakes. That's why it is often a good idea to set your investigation aside for a few days and return to it with a fresh mind and renewed interest.
In this case, fatigue and the sheer weight of data led me to make a very common mistake — I became so focused on the wealth of data I was getting that I neglected to use a key resource.
Specifically, though I used PACER to search bankruptcy records — as discussed in great length in Chapter Five — I neglected to use PACER to search federal district court records.
What made me remember? Well, I was looking back at Chapter Three and my search into other entities that might be related to UST Development, Inc. and UST Dry Utilities, Inc. and the phantom "US Telecom." You might remember that even though the principals of this scam have used the name 'US Telecom" and even "US Telecom, Inc.," there seems to be no such California corporation, and the connection to corporations called "US Telecom, Inc." in other states is questionable. Nevertheless, David Bell markets himself as the CEO of "US Telecom, Inc.," using the ustdevelopment.com/us-telecom.com web address he controls, but the Kansas address of what is very likely a different, and legitimate, US Telecom, Inc. It appears that the UST Development fraudulent enterprise may be trying to boost their credibility with potential victims by appropriating the branding of established companies.
It occurred to me — if they are doing that this time, I bet they've done it before. How would I find out? Well, scammers often squat on marketing names that are confusingly similar to reputable names. They're often chased off when the holder of the legitimate trademark sues them. That would usually be via a trademark suit, usually in federal court, usually in the district where the misleading use is going on.
That's when I realized that, though I had used PACER to look at records of cases in United States District Court for the Central District of California almost every day for my job, I had forgotten to do so for this investigation.
That's why you take a break now and then.
So, back to PACER I went. I searched for David William Bell and Branden Bell. Did I get results? Oh, yes.
My PACER search yielded two federal trademark actions from the 1990s in which the holders of trademarks for legitimate telecommunications companies sued David Bell for using confusingly similar business names.
In 1995, a company called Tie/Communications sued David Bell and Branden Bell, asserting that they were doing business as "Tie Communications" and "Inter-State Communications." Because of the age of the case the underlying documents are not available online; however, the docket is quite illuminating. It shows that (a) David and Branden Bell had a lawyer who moved to withdraw, leaving them in pro se (why? I don't know — but consider the experience of the victim lawyers whose complaint is detailed in Chapter Five); (b) David and Branden Bell did not respond to discovery, leading Tie/Communications to seek and obtain an order compelling them to do so and imposing monetary sanctions against them; (c) David Bell and Branden Bell did not abide with that or subsequent court orders, leading the court to find them in contempt, impose further monetary sanctions, strike their answer to the complaint, and eventually find them in default, (d) the court entered judgment against David Bell and Branden Bell, ordering them not to use the Tie Communications name or any other name with "tie" in it, and imposing more than $166,000 in fines, sanctions, and costs, and (e) court mail to the entity "Inter-State Communications" was returned unopened.
The presence of a David Bell, a Branden Bell, and a telecommunications business satisfied me that case was about our UST Development participants.
Next, in 1999, Alltel Corporation sued "David Bell" for using the name "All Tell Communications." Cute. The docket shows that David Bell defaulted, and the judge issued a judgment against him. This time, we have the Order and Default Judgment showing that the court ordered David Bell to cease using the Alltell mark or any mark confusingly similar. How do I know that this David Bell is our David Bell? Well, aside from the factual similarities, the address on the proof of service on the order is in La Crescenta, where Mr. Bell (and I) live, and a Google search shows David William Bell previously owned that property.
So — our PACER district court search (as opposed to the bankruptcy court search) has yielded proof that on two occasions in the 1990s, established telecommunications companies hired substantial law firms at considerable expense to force David Bell to stop using trade names apparently calculated to sound like theirs. That — plus the defaults and the sanctions — all strongly corroborate the pattern of fraud we've already discussed, and suggests that it might have started in the 1990s.
So: put your search away for a few days, then take it up again and review it with fresh eyes.
I always planned to search to see if David Bell had a criminal record, because people running a scam like this are rarely criminal-justice-system virgins. My plan gelled when I got a tip that David Bell had been charged with automobile-related fraud in San Bernardino County. Who tipped me? Maybe it was anonymous. Maybe it was a victim. Who knows?
Anyway, the tip led me to San Bernardino County Superior Court's web site, which has a robust system for searching for relatively recent criminal records. As previously discussed, that search led me to this case, which told me that (a) the DA charged David William Bell with making a false statement of financial condition using a fictitious name, identity fraud, and grand theft vehicle, a combination of charges usually suggesting the defendant is accused of using false and fraudulent identification and financial information to buy or lease a car. Or possibly a goat.
I noted that the DA also charged David Bell with having two prior non-violent felonies, creating a presumption against probation.
The complaint with dates and victims, and the police reports and other documents that might explain what evidence supports the charges are not available online. I'll have to pull those next time I'm in Rancho Cucamonga. David Bell's prelim is in November; if it goes on schedule, I can order the transcript or even attend it, directly or through a minion.
Note: David Bell is only accused of this crime. He is presumed innocent. He is entitled to due process. I sincerely hope that his defense lawyer is skilled and dedicated. If you think this series shows creativity and doggedness, I thank you and tell you I hope David Bell's lawyer shows more, and sorely tests the government's claims at every turn. If the DA called me as a witness (say, to testify about receiving the fraudulent invoice, as other acts evidence to show fraudulent intent — highly unlikely, but follow me for a moment), then I hope the defense lawyer would cross-examine the living shit out of me. Because that's how we should roll.
Anyway, back to digging up information. The DA's accusation of two priors was unsurprising to me, and suggested that spending a little money on further digging was warranted. I spent five bucks to run a name search for "David Bell" in the Los Angeles County Superior Court's web site. That turned up a long list of cases, most of which were not this David William Bell and a few of which might or might not be. I chose a few likely-looking candidates (based on dates and the nature of the crime charged), noted the case numbers (for instance, BA261144), and pulled some records from the Criminal Courts Building where several of those cases had been held.
David William Bell, same date of birth as our guy, was charged in February 2004 in an 11-count complaint accusing him of grand theft by embezzlement or $227,226.99 from the Estate of William S. Bell and Sharon Rae Bell, of check endorsement forgery, and of fraudulently using credit cards to get cash advances and balance transfers. In May 2004 he entered a no contest plea to the embezzlement charge (in other words, not admitting guilt but agreeing not to contest the charge and agreeing the state had sufficient evidence to convict him) in exchange for two years in state prison and restitution. That disposition was wrapped together with a revocation of probation or parole from some prior case. In July 2004, the court imposed that two-year state prison sentence, noting that Bell had already been incarcerated for 142 days.
The transcripts in that case referred to a prosecution at the same time in Alameda County — the court in Los Angeles ordered that its sentence run concurrently with the Alameda sentence (that is, that the time Bell was serving would be treated as simultaneously serving both sentences, rather than adding the sentences together). That case may or may not be related to the 2004 Los Angeles County case. Regrettably, the Alameda County Superior Court web site does not allow access to criminal case records. Perhaps one of our readers in Alameda County could drop me a line if they are willing to check next time they are in the courthouse — the case number is BCT282 and the docket number is 143310. I've noticed a spike of traffic from Alameda recently on this series, with searches from there for David Bell. Could that be related?
Note that the complaint in the 2004 case also alleged prior felony convictions. Specifically, it alleged bad check convictions in 1993 and 2002 and a conviction for diverting money accepted for contracting work in 2001. Looking back to that name search printout, we're now able to corroborate that some of the "David William Bell" convictions have case numbers matching the case numbers listed as priors on the 2004 complaint. Now, because of his deal, David Bell did not admit to these priors, and the court did not specifically make a finding about them, but this is rather strong corroboration.
Now that we can look back at that Los Angeles County Superior Court name search list and identify which convictions belong to this David William Bell, we can glean some useful information. For instance, it shows that the 1993 bad-check prior was expunged based on successful completion of probation. The expungement statute operates on the theory that successful completion of probation demonstrates rehabilitation. It's a nice theory. The same case list shows that one of the bad checks charges was originally bundled with a charge under a Pasadena Municipal Code section prohibiting doing contractor work without a license, which charge was dismissed. The charge of diverting money accepted for contracting work had been bundled with a charge of operating as a contractor without a license. Of course, our David would never do that, so no doubt those charges were dropped for lack of evidence.
Next up: pulling such records as are available for those convictions to assess patterns of behavior and further leads.
Plus, I think some further examination at the Contractor State License Board is warranted. See, UST Development, Inc.'s license was issued in 2008. The CSLB requires applicants to disclose criminal convictions, even if they have been expunged. Even if the convicted person doesn't sign the application, the CSLB is quite specific about who must be disclosed in connection with a license application so that they can be fingerprinted for a background check:
Q. Who must be fingerprinted?
A. All applicants for license and each officer, partner, owner, and responsible managing employee thereof, as well as all applicants to be home improvement salespersons, must be fingerprinted. Individuals currently licensed by CSLB who do not apply for any changes to his/her license and applicants for a joint venture license are not required to be fingerprinted.
So. Based on the information in this series, there is overwhelming evidence that David William Bell has been acting at the very least as an "responsible managing employee" of UST Development, Inc., even if you ignore him identifying himself as an officer. So: did UST Development, Inc.'s application disclose the involvement of David William Bell, so that he would be fingerprinted (which ought to turn up his record), or was he not disclosed on the application? If whoever signed the application under penalty of perjury did not disclose him, what did they know and when did they know it about his involvement with UST and his extensive criminal record? Could the CSLB have failed to notice a disclosure out of incompetence? Or could the CSLB have decided that at least four prior convictions, two of them related to contracting work, ought not be a barrier for a contractor's license?
Q. What happens if I have a criminal record?
A. Just because you have been convicted of a crime does not automatically mean your application will be denied. CSLB's Criminal Background Unit (CBU) reviews all criminal convictions to determine if the crime is substantially related to the duties, qualifications, and/or functions of a contractor. Since no two conviction records are the same, they are reviewed on a case-by-case basis. The criteria used by CSLB include whether the crime shows the present or potential unfitness of an applicant or licensee to perform the functions authorized by the license in a manner consistent with the public health, safety, or welfare. In addition, CSLB reviews and considers any evidence of rehabilitation submitted by the applicant or licensee. Please see above link to the California Code of Regulations Sections 868 and 869 for more specific information on the criteria for determining substantial relationship and rehabilitation.
If the CSLB knew of that set of convictions, but decided to issue the license anyway, then I submit the criminal background check component of the CSLB process is foolish a waste of time by everyone involved, and that the CSLB's judgment as a whole is open to question. If David Bell's name and convictions were not disclosed, there ought to be a criminal perjury investigation of the signatory to the application.
Finally, examination of criminal records brings up an important issue: buck fever.
You can't get so excited that you abandon logic or attention to detail or methodology when you pursue a scammer, or you can wind up making some incorrect conclusions. This is particularly true when you are dealing with someone with common names like David and William. Always look for corroborating evidence (addresses, confederates, similar behaviors, etc.) establishing that the references you find are to the same person you are looking for.
In this case, my heart skipped several beats when I found a PACER record of a habeas corpus petition by a "David William Bell" doing a 12-year stretch for four counts of vehicular homicide. But on further reflection and search for corroboration, the dates didn't seem to match, and I concluded it was a different David William Bell than the one working with UST Development. The juicier the information, the more important it is to suspend judgment until you corroborate.
It's going to be a busy week at work, but more to come in the next chapter. Thanks for reading.
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