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

https://news.ycombinator.com/item?id=2855272

by badclient • 15 years ago

55 56 15 years ago

news.ycombinator.com

I did work for a client who seemed legit. I worked day and night with him for 30 days.

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 own 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.

Most importantly, he has been convicted at least once in past for writing non sufficient funds check.

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?

pbreit3• 15 years ago

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.

badclient12• 15 years ago

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• 15 years ago

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.

EToS• 15 years ago

I'd definitely take the work down if it hasnt already.. and if legal action is your next step, use every opportunity to document this relationship (follow all emails up with recorded mail that he has to sign for etc)

pbreit3• 15 years ago

But it's almost impossible and quite expensive to get a criminal verdict. That it was interstate makes it even more difficult.

nikcub• 15 years ago

you must never watch 'cops'

badclient12• 15 years ago

Made me chuckle. Fav childhood show.

pbreit3• 15 years ago

Why the downvotes? I did not say it was not criminal, just that it wasn't something that law enforcement would likely pursue.

philiphodgen2• 15 years ago

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.

badclient12• 15 years ago

Thanks. The question is which DA to contact. His company is registered with a San Francisco address while most of his past cases are in Marin County. Also, I'm in NYC.

aaronblohowiak2• 15 years ago

SF, CA

ScottBurson• 15 years ago

IANAL, but I don't see how this fits the legal definition of blackmail, which, as I understand it, requires that the blackmailer not have a right to the property they are attempting to extort from the victim.

Creditors routinely threaten to report debtors to the credit bureaus -- is that blackmail??

I think if you said "I'm going to the DA if you don't pay me double the amount you owe me", that would be blackmail.

Admittedly, the suggestion to just go ahead and file charges doesn't seem like bad advice to me.

srl3• 15 years ago

[IANAL] Of course, it's also blackmail to threaten to approach the police about crime B if crime A is not rectified - that A is a crime is irrelevant. Not that it's applicable here.

bryanlarsen2• 15 years ago

IANAL, but I have been way too intimately involved in something. There are many types of threats that can be considered criminal harassment, but threatening to call the cops is not one of them (at least in Canada). I presume the same would apply to blackmail. Calling the cops is what you're supposed to do, so threatening to do what you're supposed to do should not be a crime. It might be different if you were trying to collect something that wasn't yours, but...

Another thing I learned was to never accept any sort of repayment scheme. Once you do that, it then becomes a civil matter rather than a criminal matter.

Again, I'm not a lawyer, and this may apply to Canada only.

bryanlarsen2• 15 years ago

in another thread thucydides says:

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.

So in essence, you're saying that we're both right.

adammichaelc• 15 years ago

(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.

chops• 15 years ago

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

Politeness is not warranted in this situation. This guy sounds like a defacto asshole and deserves to be in jail.

thucydides4• 15 years ago

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.

mootothemax• 15 years ago

Surely by your definition, any Cease & Desist letter is also blackmail?

thucydides4• 15 years ago

No, C+Ds usually contain threats of CIVIL action, not threats to report criminal behavior to the government.

Joakal• 15 years ago

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

Sorry to hear.

aaronblohowiak2• 15 years ago

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

michaelpinto• 15 years ago

Don't guess, talk to a lawyer!

tatsuke95• 15 years ago

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.

biturd• 15 years ago

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.

badclient12• 15 years ago

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• 15 years ago

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• 15 years ago

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!

badclient12• 15 years ago

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.

gte910h2• 15 years ago

I've found a 20% deposit be an issue for no corporation (high fours to high five figures)

damoncali• 15 years ago

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?

brudgers• 15 years ago

The size of the retainer doesn't matter as much. What matters is that it applied to the final invoice and that <IANAL> nonpayment of an invoice is explicitly listed as a breach of contract and grounds to terminate it </IANAL>.

I typically use language in my contracts (not programming related) which allows a very short window for payment - seven to ten days not 30 days. That way it is much easier to avoid getting upside down with even a fairly small retainer relative to project size. I also set the interest rate to be higher than many credit cards - at least 1.5% per 28 days - because I am not a bank for my clients. Finally, I will often invoice every two weeks or twice a month - again to avoid being upside down.

With established companies, I am more flexible if I feel it is warranted. But anyone who balks over payment terms but not the payment amount tends to be suspect.

gte910h2• 15 years ago

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.

mark_l_watson• 15 years ago

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• 15 years ago

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.

badclient12• 15 years ago

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.

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

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