

Ask HN: Client wrote returned check for over $10,000. How to report him? - badclient

I did work for a client who seemed legit. I worked day and night with him for 30 days.<p>His check to me returned. He paid menagain and the check returned again. This was few weeks ago, since I have found many more people(including his <i>own</i> lawyers) who remain unpaid by him. He's got default judgements against him--though most people are having a hard time collecting $ despite the judgements.<p>Most importantly, he has been convicted at least once in past for writing non sufficient funds check.<p>I am in NYC while he is based in California. How can I try and get a criminal case going against him? Do I goto NYPD? The DA?
======
biturd
What are his initials to his name? This sounds all to familiar, is the correct
area etc.

I was burned for 20K. The man was a professional bad debtor.

He built a relationship with me for 6 months, having me do work that he
initially paid for in cash or check, which always worked fine. Over time, the
jobs got larger, and more costly, and we moved to 30 day terms. I never
bothered with a credit check because he built a relationship that started on
pre-pay cash.

His last job was to hit me with the 20K job. Bad check and it was all over.
What really sucked about this job was it was not all labor, and I had
employees do the labor which also cost me. My cost of goods on this job was
75% of the total, which I had to pay to my vendors.

I sued him in small claims for the max amount in my state. I sued him two
times by breaking the job into two invoices so I could try to approach the
total amount owed. Merely serving him took weeks and required I hire a pretty
ruthless process server. He was good at hiding out. I received judgement and
won the case.

He never paid. I sent him to a collection agency who called me back in a day
to tell me they knew of him well. There was and is no way to collect.

His son has the same name as him, which is part of his scam. He is "married"
or at least with the same woman for decades. All assets are in her name, but
since they are not married there are no mutual assets to have liened or
seized.

The only thing I could have done different, perhaps with more research, would
be to have a sheriff on the courthouse to take his car on the spot. That may
not be possible, and really depends on the circumstances.

In the end, the only thing I was able to do was harass him on the phone and
dig through the work I had done, locating the people he resold my work to and
warn them to cancel all payments. Once of his clients was nice enough to hold
payment back for a time and give it to me as long as there were no legal
repercussions coming from the scammer.

His initials are T.W. in case it is the same person. I still hold judgement to
him this day. If he ever opens a bank, buys a house, gets a credit card, or
does anything that can be attached as far as funds, I will get in a line and
maybe get paid after all the others are paid in the order in which he screwed
them.

This will end up being a lesson learned. Sorry to hear about this for you.

~~~
badclient
Different guy. But almost as crazy.

I'm working to build a site exposing him and will post here. Hopefully a few
HNers will blog about it and help other web devs/designers stay away from him.

This guy is such a scumbag he subcontracts out the work and I know for a fact
the original client paid him the money. He doesn't want to pay me a fraction
of what he probably got paid.

~~~
btilly
Let's see. The original client is using your copyrighted work, and you never
got paid?

Check with a lawyer. If you didn't get paid, he may well not have any right to
use your copyrighted work. Therefore he has no ability to sell the right to
your work to the original client. If so, then the original client is now in
violation of _your_ copyright.

If so then the fact that you are in a position to cause trouble for the
original client might accomplish something useful. But think carefully about
how to use it in negotiation before going there. (On the plus side you may
poison that original client against that person. On the negative side, you're
unlikely to recover much after legal expenses.)

------
nfm
I know this probably isn't helpful to hear at this stage, but I'm going to say
it anyway for everyone's benefit. We've learned this lesson the hard way, but
fortunately didn't have to use all of the following advice.

Always take a part payment up front before starting work. Between 30% and 50%
is a fairly standard and safe amount. Always take another part payment after
demonstrating your progress. Ideally upon final delivery the balance to be
paid for your work should be less than 30%.

If clients are unhappy about paying you up front, you need to ask yourself why
they're unwilling to pay anything to start, when they will be paying $10k to
you in the very near future.

If they don't trust you, they'll work with someone else. You need to be able
to trust them too, and taking a part payment up front is often the quickest
way for you to learn that they are trustworthy.

When a client isn't able to pay, you should try and negotiate payment in full
over time. Regular, small payments give them a chance to pay off their other
creditors and give you regular indication that they're trying to pay you back.

If they refuse to pay, or miss their regular repayments, don't be afraid to go
to a debt collector. Make this clear when you are negotiating the payment
schedule. At this stage, any money you can get back (less the often expensive
debt collection fees) is a bonus.

Even if the amount is paid back in full, we make it a rule not to work for
this client again.

For an amount this large, you should definitely talk to a lawyer. Keep a close
eye on your cashflow over the next few months.

Best of luck recovering the payment!

~~~
badclient
As I've stated below, I'd lose majority of my clients if I required 30%
upfront payment. Truth is when you work with agencies and corporations, they
are usually not willing to pay in advance. And yet they provide me with bulk
of the work.

This scumbag operates behind a sham agency. He's presented at conferences such
as ad:tech giving him te SEO appearance that he is legit. It's when you dig
deeper and search the court databases that you learn the truth.

~~~
damoncali
That hasn't been my experience, for what it's worth. Upfront payments have
been the norm for me. Maybe you're getting the wrong clients?

------
philiphodgen
In California this is a criminal offense and the DA for the County where he is
will have a bounced check unit. Contact the DA. It is a slam dunk.

Do. Not. Threaten. To. Go. To. The. DA. "I'm going to the DA if you don't pay
me" is stoopit. That's blackmail and you will be the one in trouble not him.
Just file charges.

~~~
adammichaelc
(Not legal advice, just my opinion)

Not true. It would only be blackmail if he didn't legally owe the money.

Threatening to go to the DA is very appropriate. In fact, it's what you should
do so that he knows how serious it is. I would say something like, "If there's
not a cashier's check in my hand by x date, I will file criminal charges with
the DA."

It would be the polite thing to do, so that he's not blindsided with a
criminal record.

~~~
thucydides
Not correct. If you threaten to expose a crime unless you are paid money, you
have committed blackmail. It is blackmail even if you have a legal right to
demand the money.

Note that each act separately is fine: you can demand money; you can threaten
to report a crime. You just can't make the report conditional on receiving
money.

~~~
erydo
> If you threaten to expose a crime unless you are paid money, you have
> committed blackmail.

That might make sense if the crime in question weren't the non-payment of that
money. Saying, "If you don't pay what you owe, I'll report you" doesn't sound
like it could possibly be blackmail.

There are a lot of IANALs here, I'd love to hear an actual lawyer comment on
this.

~~~
thucydides
"I try to unravel the paradox [of blackmail] and provide a coherent basis for
distinguishing legitimate from illegitimate threats. In brief, I argue that
the key to the wrongfulness of the blackmail transaction is its triangular
structure. The transaction implicitly involves not only the blackmailer and
his victim but always a third party as well. This third party may be, for
example, the victim's spouse or employer, the authorities or even the public
at large. When a blackmailer tries to use his right to release damaging
information, he is threatening to tell others. If the blackmail victim pays
the blackmailer, it is to avoid the harm that those others would inflict. Thus
blackmail is a way that one person requests something in return for
suppressing the actual or potential interests of others. To get what he wants,
the blackmailer uses leverage that is less his than someone else's. Selling
the right to go to the police involves suppressing the state's interests.
Selling the right to tell a tort victim who committed the tort involves
suppressing the tort victim's interests. And selling the right to inform
others of embarrassing (but legal) behavior involves suppressing the interests
of those other people."

James Lindgren, Unraveling the Paradox of Blackmail, 84 Colum. L. Rev. 670,
672 (1984)

~~~
erydo
That still doesn't quite answer the question: If the money is paid, there is
no crime to begin with. The transfer isn't selling the right to go to the
authorities, it's resolving the crime of non-payment in the first place.

------
michaelpinto
Don't guess, talk to a lawyer!

~~~
tatsuke95
Exactly. If you're in business you need to have a solid team around you. That
includes a lawyer you can talk to. It's important, for just these matters.

------
mark_l_watson
I have only been stiffed once (and that for a very small amount of money that
the client said was not worth his time to write a check, so he just thanked me
- not the result I wanted!)

So I lack direct experience related to your case, but even with a 12 year time
span of not having problems with customers paying, I still ask new customers
for a small up front payment (they know who I am, but in many cases I don't
know them), and I invoice frequently. If anyone ever wants to pay every month,
I tell them that I enjoy getting paid frequently: it is always nice getting a
notification of a wire transfer, a check in the mail, or PayPal payments.

Sorry about what happened to you - that is a bummer!

------
DomainNoob
The legality of 'sucks sites' is well established. Perhaps with a little help
from HN, an SEO advantage could be gained that would bury whatever legit sites
he's operating.

~~~
badclient
That's the plan. I'll make another post when the site is up and perhaps a few
folks won't mind blogging/tweeting to keep future devs/designers from being
scammed by this guy.

------
gte910h
You have a high chance of being able to use a DMCA request to take down the
work as well.

If he's scamming instead of not actually having money, this may compel
payment.

------
Joakal
Was it work for an one-time on-completion payment?

Sorry to hear.

~~~
aaronblohowiak
IANAL, but I believe that in writing the cheque and giving it to the other
person, you are acknowledging the debt owed.

------
pbreit
This is generally not a criminal thing so I'm not sure the police or DA would
get involved. You might consider small claims court or maybe a collections
agency.

Have you turned over whatever you were contacted to do? So it's a real person
who is actually conducting some sort of business? I suppose there's an outside
chance you might be get some funds but doesn't sound too good. As you know
now, the research would have been better performed in the beginning.

~~~
badclient
Knowingly writing a check with non sufficient funds is criminal in most
places.

Yeah my work is up and live. He's on the record with complimenting it.

There is no way you can search thousands of court databases each time you take
on a client. I just ran into someone who told me which dbs to search to pull
up dirt on him.

~~~
jeffreymcmanus
It's not your job to "pull up dirt on him". Writing bad checks is a criminal
offense (in both California and New York) and pursuing people who do this is
the job of the district attorney. That should be your next stop.

~~~
badclient
That's in a perfect world. Most DA offices are overworked and have a lot of
discretion it seems. And for a charge like this, claiming I got a returned
check from someone with past criminal record for it can be the difference
between being taken serious and being passed.

San Frnacisco DA's office took almost a week to return my call. It went to VM.
Been a week and I'm still waiting for the return call.

~~~
bugsy
Call them every day and politely but firmly ask how it is going. In
California, in addition to the check crime, theft of property or services
above $950 is "Grand Theft".

Also post his name and a scan of the check and the contract on the internet.
Be sure everything you state is factual. Also, since you have not been paid,
you have a civil claim against him for copyright violation. File a take down
notice with his site's host.

If you want your money back, you will have to go out to California, get a
claim against him, then locate and seize his property for the debt if you can.
That's going to cost you more than $10,000 to do of course, so whether you get
justice is up to you. Just don't expect you'll ever see that $10,000, the
value of that work is gone.

It's possible you have a signed contract stating that the venue for disputes
is your state of New York. If so, that is easy to get a ruling against him
since it's unlikely he'll show up for the hearing and you'll get a default
judgement. Then you take that judgement to California and try to locate assets
to seize. Since you didn't mention this, it is likely you have no such
contract and you'll probably need to fight the whole thing out on his turf. In
the future be sure to specify that all legal conflicts must happen in your
area.

Also very important. In the future you do not do one day of work until you
have 1/3 cash up front. The contract then specifies you get the second 1/3 at
a key milestone, and then the final 1/3 when you actually transfer the code.
If you had done this (which is very standard with projects for unknown
clients) then you'd only be out $3333 right now.

~~~
badclient
I am working on launching a site that exposes him by stating facts and linking
to his past/present litigation and criminal record.

At this point I've cut my losses and understand I may never see the money. I
am pretty sure I can get a civil judgement against him going by his history of
not showing up. However, as you said it's still going to be a nightmare trying
to enforce the judgement. I mean jeez his own lawyers who he didn't pay got
judgements but aren't able to collect funds.

I'll keep pushing the DA's office. Unfortunately their VM says not to leave
repeated messages so I don't want to annoy them.

About taking 1/3 advance, I donno how people do this without losing a lot
business. Majority of my legit clients would not be able to pay 1/3rd in
advance and just move on. In fact with agency work it's standard to wait 90
days for payment.

~~~
jmvoodoo
It sounds like what he is doing with his wife/girlfriend is probably tax
evasion. If you don't care about never seeing the money again then I'd just
hand it over to the IRS and explain the whole scam he has going. Unlike the
DA, the IRS will probably take action on it and the whole wife/girlfriend
thing won't be an issue for them.

