Reply #134: More Troubles For CyberNET Group [View All]

Federal agents raided CyberNET last Wednesday morning. Since then a couple of lenders have sued the company for fraud, alleging CyberNET's owners set up a shell company to bilk millions of dollars from the banks.

The chairman and founder, Barton Watson, is also named in the lawsuit, along with his wife Krista Kotlarz-Watson and CyberNET's Chief Operating Officer James Horton.

None of the three has made any comment yet on the federal investigation or the civil complaints.

Charter One, the bank behind the initial lawsuit, went into CyberNET Group headquarters Monday morning to check on equipment it owns and was leasing to CNG. According to a motion filed in Kent County Circuit Court this week, the bank found only 10 of its 66 computer servers.

In addition, the motion alleges even those 10 servers were a facade. It reads: "Charter One discovered that every 'server' was merely an empty shell with no computer hardware or chips inside and only a string of lights to allow the 'servers' to appear operational."
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http://fox17.trb.com/news/112304-wxmi-cybernet,0,4565411.story

The CyberNET Group's last newsletter

Barton Watson appears in the company's last newsletter.

The Watsons at the charity event in California.

(Grand Rapids, November 24, 2004, 6:59 p.m.) 24 Hour News 8 has received dozens of e-mails since we broke federal investigation about The CyberNET Group last week. People have been sending tips and leads about the company.

One of those e-mails provides new insight into just how many lives and countries are being impacted by the investigation.

Someone sent us a copy of the November 2004 edition of The CyberNET Group's newsletter. It contains pictures of employees from Asia to America and pages and pages trumpeting the company's great and growing successes.

The CNG Worldview starts with the view from the office of the chairman himself, Barton Watson. A motivational message apparently penned by Watson advised employees how to pitch their product, writing "We get one chance to give a first impression...one chance to position our brand in the marketplace."

A brand so successful, according to the newsletter, it had The CyberNET Group sealing deals to provide information technology services in Australia, China, the Philippines and United States where the Americas Sales Team reported that it had toured Haworth and hoped to do business with the furniture maker

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http://www.woodtv.com/Global/story.asp?S=2612290&nav=0RceTWHE


CyberNET Founder Dead After Standoff
November 24, 2004 -- (WEB HOST INDUSTRY REVIEW) -- The Grand Rapids Press reported on Wednesday that Barton Watson, founder and chairman of Web hosting provider The CyberNET Group (cybernet-usa.com), was found dead at his home in Kent County, Michigan. Watson’s body was found in an upstairs bedroom at 9:15 am after a standoff with police.

According to the report, Watson was at home alone with a gun when he called police authorities at 12:08 am saying he wanted to hurt himself. The authorities came to the house between 1:00 am and 1:30 am, Roger Parent of the Kent County Sheriff's Department told 24 Hour News 8, in an effort to prevent Watson from following through on his threat. Upon their arrival, gunshots were reportedly heard.

After arriving, police spoke with Watson and, at 2:00 a.m., were reportedly making progress, the Grand Rapids Press said. Watson said he would not hurt himself and wanted to come out. At approximately 3:50 a.m., police reported another gunshot. From that time on, police did not have any contact with Watson.

The incident came on the heels of last week's raid on The CyberNET Group's offices in Grand Rapids, Michigan. Federal agents from five agencies, including the FBI and IRS, took part in the operation, reportedly seizing computers and other equipment.

While the reason for the raid was not revealed, sources say the investigation is related to massive wire mail and bank fraud. Watson's home has reportedly been searched as part of the investigation.

...

Watson was convicted of fraud in the early 1980s.

Daniel Yeomans, acting on behalf of Charter One and up to 46 banks who have lent money to the company, told the Grand Rapids Press that the owners of the company enjoyed lavish lifestyles that included leased luxury vehicles, original paintings and plush furniture

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http://thewhir.com/marketwatch/cyb112404.cfm

About 90 percent of the equipment at the company was leased, not owned by The CyberNET Group. Plus, not all of the assets are in one spot. "We've got some assets at a warehouse. There's different offices in different cities and different countries that we've gotta get our hands around," said Daniel Yeomans, a court-appointed receiver.

Yeomans' job is to find out how much the company is really worth. He says he is surprised at what he has found. "It's not just somebody standing here taking money. There are utilities. There's good people. There's people that have done a good job and still are," said Daniel Yeomans.

Yeomans adds this is going to be a really long process. They will try to take inventory this weekend and from there figure out what it's all worth.

more
http://www.woodtv.com/Global/story.asp?S=2611663&nav=0RceTVqP