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Keeping my Promise to Patrick Byrne and how Overstock.com Has Qualified for my DUH Factor
By Stacie Clifford Kitts, CPA
If you are a regular reader of Stacie’s More Tax Tips, you know that Patrick Byrne CEO of Overstock.com (or at least someone claiming to be Patrick Byrne) commented on my post, They Wield Their Personal Knowledge of Criminal Activity Like A Superpower .
Since I can’t verify that the person who wrote the comment was really Mr. Byrne CEO, in this post I am going to refer to the commenter as “PB.”
Now, the purpose of PB’s comment was to clarify some of the stuff I discussed in the post I mention above. The following is what he wrote:
Stacie,
Thanks for the story and the link. There are, however, some minor suggestions I’d make. You say:
“and a purported owner of a website called Deepcapture.com.”
Actually, for much of its existence we just put a big bubble on the upper right hand corner of the home page explaining that I am indeed the funder of DeepCapture.com; later, we added a whole page about it and who we are . So there is nothing “purported” about it. (In one more example of the Bad Guys’ mendacity, any time I mention this in an interview they write blogs pretending that it is some huge matter that I had previously kept hidden, presumably because they think suggestible people will fall for it.)
“The purpose of Deepcapture is to expose the short sellers who are trying to make money off the decline in value of Overstock.com.”
No, the purpose of DeepCapture is to expose the stock manipulators who are ruining our capital markets (most of whom have never had anything to do with overtock, as far as I know).
“But really, what could be more interesting and telling than this disclosure from Sam Antar…”
Here’s one thing that is more interesting about Sam Antar
I hope that the information provided by PB clears up any confusion about Deepcapture and its purpose. – so there ya go. I don’t suppose I need to make any more comments on the subject.
Before I move on, I would like to point out one thing about PB’s comment that did provide some amusement.
It seems clear that PB wants to make sure that my readers and I are aware that Mr. Antar is not a nice guy.
If you click the link at the end of the last sentence you will be taken to an article written by Patrick Byrne describing Mr. Antar’s recent and past behavior. Basically we are told that Mr. Antar is a very bad, and maybe even an evil, guy.
This article and PB’s reference to it just struck me as funny. Frankly, I was LMAO. Yes folks, Sam Antar a former Crazy Eddie fraudster is a bad guy. For havens sake this is not news. Given the opportunity Sam Antar admits he would still be a bad guy, he would still be committing fraud, and the only reason he stopped is because he got caught.
Hello – these are exactly the reasons why I think Sam Antar and other former fraudsters have a powerful fraud spotting superpower.
Honestly, if I found out that Sam was guilty of recent crimes, my answer would be – so what. That would not negate his ability to spot his own kind or the signs of possible fraud.
Besides, I keep asking myself, what the motivation for the attack on Mr. Byrne is. Patrick Byrne does not give any reasons why Sam Antar might have targeted him. Maybe Patrick can enlighten me to his thoughts as to that point.
My take is pretty simple – it might just be because he could. After all, Mr. Byrne has made himself quite an easy target.
Case in point – have you read any of the recent information coming out about Overstock.com and an apparent lack of internal controls?
If I understand this correctly, an investigative reporter Roddy Boyd got his hands on some internal Overstock.com documents that had been part of the discovery process related to a lawsuit initiated by Overstock.com. These internal documents supposedly imply that Overstock.com’s internal controls were not effective. This is a real problem because Overstock.com indicates in its SEC filings that the internal controls are adequate.
What does this mean? Well, basically if you have established proper controls, your internal processes, including things like supervision, flow of paperwork, accounting systems, how things are tracked and recorded- heck -basically every aspect of your financial process is set up to ensure the accuracy (so to catch or prevent mistakes) of the financial information. Therefore, in auditor terms, if you find that your controls are working – that is they are catching or preventing errors – you might report, “internal controls are adequate to meet control objectives.”
Obviously lying in an SEC filing is a NO NO. If this is determined to be the case (i.e. controls are not working and management knew it), Mr. Byrne may have some explainin’ to do.
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Here is a lesson on making yourself an easy target, lie to the SEC and then file a lawsuit where your internal company documents will expose the lie. DUH
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If you want to read more about this check out these posts:
Overstock.com Litigation Update 2010
A Small Town, A Deep Dish Pie and Diabolical Townsfolk – a Good Post From the Past
This was exactly what I was observing when I saw the sign that sucked me in. We were driving slowly, very slowly as the speed limit was reduced to 35 mph through this particular town. And as I admired the homey almost soothing atmosphere, I spotted a sign in a café window framed in delicate lace curtains.
HOMEMADE DEEP DISH PIE $4.99
“Oh honey,” I said as I turned toward my husband clapping my hands and bouncing slightly in my seat. “Wouldn’t it be fun to stop in for some homemade pie? Can we?”
“Of course,” he said and he immediate pulled over to search for a parking spot.
And you know what?
I wasn’t disappointed by the looks of the café at all. Nope – the decor was exactly how I had pictured it would be. The occasional black and white photos of days long past were hung over aging flowered wallpaper. There was a lunch counter with red stools along the back wall and wooden tables with miss-matched chairs filling the space between. Each table had a small vase holding a single daisy. It really had the perfect small town feel.
And even though I couldn’t see into the kitchen, I knew who was back there. Yes of course – who else could it be but a sweet elderly grandmother lovingly baking her famous pie, her grey hair pulled tightly back in a bun, her flour smudged apron covering her 1950’s style dress. Sigh – I couldn’t wait for my small town – homemade – deep dish – pie experience.
We headed toward the back and sat at the lunch counter where we found the menu tucked between the condiments. I quickly buried my nose among the greasy pages and tried to decide what type of pie sounded good, cherry, apple, peach, strawberry. I didn’t notice the waitress until she asked, “What can I get you?”
“I think I will have a piece of cherry….,” I began as I glanced up into the face of a young woman who had several facial piercings and hair colored a very unnatural shade of red.” …Pie,” I finished.
Okay, so fine, the waitress didn’t really fit my small town fantasy. But that didn’t mean that my homemade pie wasn’t at that very moment being placed on some dainty flowered china by the grandmother in the kitchen. Right – the sign said HOMEMADE DEEP DISH PIE you know- I mean – there were lace curtains tied back with bows for heaven’s sake.
But when a young man in a dirty apron place in front of me a small white bowl with a spoon protruding from the side, I tried to explain. “No I ordered the homemade – deep – dish – pie.”
“Ya, cherry, this is it.” He said as he moved away. And as I stared into the bowl unable to move, all I could think was, where’s the pie lovingly made by the little grandmother in the kitchen?
And as my husband began to giggle, I realized the horrible truth. I had just paid $4.99 for a bowl of -of – canned pie filling?
That’s right – my homemade deep dish pie was a bowl full of canned cherry pie filling – I was completely mortified.
But not the hubby. He wasn’t mortified at all. In fact, he thought it was funny. Worse, he actually thought it was brilliant.
“Brilliant? Brilliant?” I stammered once I could speak. “What do you mean? I will never come back here again, this is terrible. It’s a bowl of pie filling for crying out loud.”
“What difference does it make?” He asked. “The locals know not to order the ‘homemade’ pie. Think about all the people who blow through here on their way to some place else. Heck most people wouldn’t even slow down if they didn’t have too. The sign in the window got us to come in and buy something. They’re not worried about repeat business from the tourists. When you think about it, it’s a brilliant marketing strategy. After tax, they probably made like a 400% profit off that bowl of pie filling. Why spend the money on actual pie?”
Why spend the money? Why? I was so disappointed that I wasn’t going to get my homemade deep-dish pie.
But even though disillusioned, I had to admit, it was true. If not for the sign, we would never have stopped. I glanced around the room wondering how many people had been lured in by the promise of pie only to be disappointed. And then it occurred to me, how many patrons might actually be locals slyly watching from the corner of their eye – a sad and slightly twisted form of local entertainment. Who knows, maybe a few. I mean come on, a bowl of pie filling has to piss off a least a few tourists.
But even so, I have no doubt that tucked away in some little back office is our grandma and her old accountant complete with a hand cranked adding machine bending steadily over a desk feverishly scribbling the results of some brilliant yet simple tax strategy which allows these diabolical townsfolk a way to keep all those profits from their homemade deep dish pie.
Stacie's Tax Stuff 