Monday, March 30, 2015

Overstock.com Hatchet Man Judd Bagley's Downward Spiral: Junkie, Confessed Criminal, Admitted Adulterer

Updated to include mugshot of Judd Bagley in police custody for forgery, police arrest record, and police interrogation video obtained by investigative journalist Gary Weiss under the Utah Freedom of Information Act


In the years that I’ve written extensively about Overstock.com (NASDAQ: OSTK), I have always been amazed about its bizarre CEO Patrick Byrne and the gang of misfits he has surrounded himself with. By far, the worst was a real loser named Judd Bagley. He dredged up that character from the bowels of the Internet, hiring him as a kind of all-purpose stalker and cybercriminal, harassing and intimidating certain investigative reporters and critics of Overstock.

As a criminal myself, in my many years managing the Crazy Eddie fraud, I learned to be careful about employing people with mental problems or substance abuse issues. Byrne himself, of course, was completely unhinged, with his paranoid rants and sometimes anti-Semitic and misogynist comments, making him a laughingstock. In January 2013, Byrne was arrested for having a handgun concealed in his luggage as he tried to board a commercial flight at Salt Lake City airport, and he told police he sleeps with a gun. He hired paid goons like Bagley (currently employed as the Director of Communications at Overstock.com) to stalk his real and imagined adversaries and to write lengthy conspiracy theories on the Internet.
Judd Bagley Mugshot

Over the years, as Byrne lied to investors, used illegal accounting tactics to overstate profits, defrauded consumers, and viciously attacked his critics, he used Bagley as a kind mafia hitman to assassinate the reputations of critics and journalists who questioned in actions, a role that Bagley clearly relished.

Though Byrne managed to charm a tiny number of idiots in the media, mostly members of the Utah press corps, it was plain to me from the start that Bagley clearly had “issues.” His obsessions and the vicious hatred that he exhibited in his online postings, combined with his protestations of purity and phony “piously religious family man” image, raised alarm bells. But only recently have I been able to learn what an absolute horror show, hypocrite and creep this Byrne employee was, and is.

It turns out that Judd Bagley is an admitted criminal and adulterer according to publicly filed court documents I’ve obtained [State of Utah vs. Judson Montgomery Bagley and Plaintiff Husband vs. Judson Montgomery Bagley]. (Note: Bagley, Byrne and Overstock.com are enmeshed in a libel suit brought by one of the targets of his “Deep Capture” website, but I emphasize that I was initially tipped off about Bagley's crime by an Internet sleuth, not the people suing him. During my research, I discovered another court case involving his adulterous affair. I obtained the court documents from both cases on my own.)

Meanwhile, Overstock.com’s former President and current Board Chairman, Jonathan Johnson is planning on running for Governor in Utah, while Judd Bagley remains on the payroll as its chief spokesman to the media and investors.

How Judd Bagley Stalked Critics


A bit of background first.

In 2005, Patrick Byrne made obscene and misogynistic comments to a female reporter suggesting that she gave “blowjobs” to Goldman Sachs traders after she published an article that he disliked. Two years later, investigative journalist Roddy Boyd from the New York Post reported that Patrick Byrne used Judd Bagley to secretly stalk and conduct a smear campaign against critics on the web. Bagley used anonymous aliases on stock chat boards to attack critics of Byrne. He hacked into the accounts of stock chat board posters and implanted spyware in emails to improperly gain personal information on critics. Bagley retaliated by attempting to blackmail the tech savvy blogger who initially exposed his activities. Then in 2009, Patrick Byrne used Judd Bagley to pretext journalists and critics (including me) to gather information about their family members (including minor children) and friends by setting up a phony profile on Facebook under the name Larry Bergman. That resulted in a spate of bad publicity and got Bagley kicked off Facebook.
Patrick Byrne Mugshot

In February 2009, I exposed certain violations of accounting rules by Overstock.com that allowed it to fabricate a Q4 2008 profit rather than properly report a loss in that quarter and overstate its reported income in later quarters. Patrick Byrne retaliated by personally attacking me on a stock market chat board, during various earnings calls, and in the press in an effort to discredit me. During that time, Judd Bagley injected himself into divorce proceedings by contacting my former spouse who ignored him. Bagley used illegal pretexting tactics to "friend" my children and relatives on Facebook using his phony account. Bagley’s illegal actions was a clear retaliation for my pointing out the company's accounting violations. My work was vindicated when at my request the Securities and Exchange Commission investigated Overstock.com and forced it to restate its financial reports to correct its illegal accounting practices.

Judd Bagley: Admitted Forger, Drug Addict and Adulterer


Judd Bagley should have been thrown in jail a long time ago for violating a host of federal laws. But our captured regulators have generally ignored Overstock’s serial law violations. Eventually, though, the drug-addicted misfit wound up behind bars.

On April 1, 2013, Judd Bagley was charged with eight felony counts of “Obtaining a Prescription Under False Pretenses, a Third Degree Felony, in violation of Utah Code Ann § 58-37-8(3)(a)(ii)….” According to Court Documents, Bagley altered the same prescription nine times by forging the dates and altering the names of substances he was looking to obtain illegally:

B. Kirkham, Lehi Police Department, having probable cause to believe a crime was committed, submitted evidence in support of the filing of this Information: On May 4, August 30, October 29, and December 11, 2012, the defendant presented a script for controlled substances (Lortab and Adderall) at the Macey's Pharmacy in Lehi. The script had originally been written in December, 2010, to be used one time. The defendant had altered the dates and/or the substance in order to receive the substances fraudulently. He did the same thing with the same original script, filling prescriptions for Lortab and Adderall on June 4 and August 30, 2012 and January 2 and January 31, 2013 at the WalMart pharmacy in American Fork. He presented the script again in February, 2013, but the pharmacy refused to fill it. Defendant admitted his conduct when interviewed by police. [Emphasis added.]

According to the arrest record, that lowlife Judd Bagley brought along his minor daughter with him to the WalMart pharmacy where he attempted to obtain medications with the forged prescription (page 13 of 17).

Police "suspect" Judd Bagley brings minor daughter to obtain drugs with forged prescription

On April 4, 2013, Judd Bagley was ordered to report to Utah County Jail for arrest and to have his mugshot and fingerprints taken by the police. On June 4, 2013, Bagley pleaded guilty to three Class A criminal misdemeanors. He was ordered to wear a GPS tracking device in lieu of spending time in jail before his sentencing.


On July 1, 2013, Bagley was sentenced to a one year jail sentence for each criminal misdemeanor, to be served concurrently. He was fined $7,500 ($2,500 for each misdemeanor). The Judge suspended his jail sentence and $6,641 of fines. He was required to complete 120 hours of community service and placed on probation for one year.

While all this was happening, Bagley’s downward spiral continued. He is married and has four young children. Apparently his criminal conduct took a toll on his marriage, because Bagley decided that as long as he was destroying his own family, he might as well destroy an innocent family as well. What follows reminds me a great deal of the serial infidelity of my cousin Eddie Antar, who cheated on his wife and spread misery wherever he went.

On December 13, 2013, Judd Bagley was sued by the husband of a woman he had seduced. It was not the sad excess of a man in midlife crisis, but the vicious act of an out-of-control drug addict, a tawdry affair that smacks of sexual harassment--in addition to exposing Bagley as an absolute hypocrite. The man accused Bagley of intentional infliction of emotional distress, negligent infliction of emotional distress, and alienation of affections. Not mentioned in the suit, obviously, is the toll this open adultery with a married woman wrought on Bagley's long-suffering wife Kristen and their young children.

According to the lawsuit, Bagley took advantage of his position as a sponsor at the Karl G. Maeser Preparatory Academy in Lindon, Utah by conducting an extramarital affair with the plaintiff's wife. In the course of ruining this man's marriage, the woman “admitted to having sex” with Judd Bagley “at local hotels, his home in Lehi, and [the woman's] home....” It's not known how the officials of the Karl G. Maeser Preparatory Academy feel about Bagley's predatory activity, but we can only guess.

On January 2, 2014, Bagley initially sought to cover up the affair by denying it in his response to the lawsuit filed in court. Bagley further attempted to cover up the affair by refusing certain discovery requests for documents and information, and denying wrongdoing in his answer.

That turned out to be a lie.

On July 18, 2014, the husband filed an amended complaint and on that same day, faced with a mountain of evidence proving his guilt, Bagley finally admitted to having a “consensual relationship” with the woman starting in “April or May 2012.”

Judd Bagley’s lawyers sought to dismiss the lawsuit by blaming the victim and throwing mud at the man he had victimized. Somehow, to Bagley's addled junkie's logic, there was nothing wrong with Bagley cheating on his wife and engaging in an affair with a parent at the Karl G. Maeser Preparatory Academy because, he claimed, the woman was in a troubled marriage:

This case airs the "dirty laundry" of an unfortunate personal and family matter. But the judicial system is not the proper venue for retribution after spouses have been unfaithful, particularly when Plaintiffs marriage was already troubled.

In other words, the plaintiff and his wife had marital problems, so it was okay for Bagley to waltz in and break up that marriage.

Bagley's lawyer went on to claim that:

Bagley’s participation in a consensual relationship with [the woman], while unwise and regrettable, does not rise to the “outrageous and intolerable” standard required by Utah law for a claim of intentional infliction of emotional distress.

Bagley fought the suit for months with similar rationalizations, evasions and lies. In one written interrogatory, the husband asks Bagley to “identify how many times you have had intimate contact, including but not limited to kissing and sexual intercourse with [his wife]." Bagley responded “Defendant does not know the answer to this question” and refused to provide any responsive information to the question.

Maybe he lost count. I believe that Bagley was probably having multiple affairs at the time that he was cheating on his wife, being an addicted individual with nothing resembling a conscience.

Bagley’s lawyers concluded that:

Bagley does not assert that he behaved admirably in participating in a relationship with [the plaintiff's wife]. However, his actions do not rise to the level of the causes of action alleged in the Complaint, and Plaintiff cannot meet his burden to show each of the requisite elements. Bagley respectfully requests that the Court grant his motion for summary judgment on all causes of actions and dismiss the case.

On September 3, 2014, the lawsuit was dismissed by a mutual agreement between the parties. It is not clear from the court file if Bagley had to pay money to get it withdrawn. Nor can it be quantified how much pain this disgusting junkie inflicted on everybody involved, something that no amount of money can make up for.

I’m no angel myself. I’ve committed crimes and all sorts of sins. But I’ve faced up to them. Bagley has not. A document filed with the court in May 2013 indicates that Bagley has undergone treatment in a Twelve Step program, in the course of shaking off his drug addiction, a very serious misery that I have no doubt whatsoever contributed to his vicious criminal conduct at Overstock, which Byrne exploited for his own ends.

Obviously the treatment didn't take. The Twelve Steps call for a person to have a spiritual reawakening and turn his or her life around. Yet at the time that letter was written and for months afterwards, Bagley was conducting a brazen affair, preying on another man's wife.

Step Eight of the Twelve Steps reads as follows: “Made a list of all persons we had harmed, and became willing to make amends to them all.” Bagley would have a very long list of people to make amends for his years of lies, most of which were much worse than the forgeries he conducted to fuel his addiction. I don’t expect him to even attempt to live up to the Eighth step, because he is an unrepentant criminal as well as a dope addict.

Written by, Sam Antar

Worthy Reading: Closing the File on a Criminal and Junkie Named Judd Bagley by Gary Weiss

Disclosure:


I am a convicted felon and a former CPA. As the CFO of Crazy Eddie, I helped mastermind one of the largest securities frauds uncovered during the 1980's. Today, I advise law enforcement agencies and professionals about white-collar crime and train them to catch the crooks. I perform forensic accounting services for law firms and other clients.

I have no investment position in Overstock.com, long or short.

Thursday, February 05, 2015

Crook vs. Crook: Why Former Congressman Michael Grimm is a Dumb Crook

In my first segment of a series of Op-ed articles about white-collar crime on CNBC, I examine the case of former Republican Congressman Michael Grimm who recently pleaded guilty to income tax evasion and awaits sentencing on June 8, 2015.

New York City’s high sales tax rate provides a powerful incentive for businesses to underreport cash sales.

According to the indictment, Michael Grimm skimmed cash sales, reaping an off-the-top 8.875% reward from stealing the sales taxes. Next, Grimm paid some of his employees in cash (off-the-books) thereby evading paying payroll taxes, unemployment insurance, and disability insurance. The net profits Grimm reaped from skimming cash was income tax evasion.

However, as a former FBI special agent, you would expect him to learn from the mistakes of the criminals he busted, but he didn't.

Read my Op-ed here and watch the video here: http://www.cnbc.com/id/102401283.


Written by, Sam E. Antar

Wednesday, December 31, 2014

Media Commentary, Mentions, and Referrals During 2014

December 19, 2014: Cleveland.com - Crazy Eddie CFO shares how companies trick auditors and fleece investors: Plain Dealing, by Sheryl Harris

December 3, 2014: Going Concern - Ex-Crazy Eddie CFO's 10 Tips for Advancing Your Accounting Career by Adrienne Gonzalez

December 2, 2014: Sequence Inc - Marc G. Nochimson, CPA, Medifast, and Deficient Audits, By Tracy Coenen

December 1, 2014: Going Concern - Ex-Enron CFO Sorry About Sarbanes-Oxley, Guys, By Adrienne Gonzalez

November 26, 2014: Benzinga - Nu Skin Volatile Amid Inventory Fraud Allegations, By Kevin Riley

November 24, 2014: New Jersey Newsroom – Safe Investing: Crazy Eddie, Regulators Address Scams, Financial Fraud, By Joe Tyrrell

November 23, 2014: Cedar Valley Business Monthly – Ex-fraudster warns UNI business students about white-collar crime, By Jim Offner

November 21, 2014: Attestation Update - Big bank penalties in last five years offset industry profits for first decade of this century, By James Ulvog

November 20, 2014: CNN Money – 5 ways fraudsters trick investors, By Matt Egan

November 18, 2014: Health Care Renewal - Even Crazy Eddie Knows "Corporations Don't Commit Crimes, People Commit Crimes" - But Biotronik Settles, by Roy M. Poses, M.D.

November 17, 2014: CNN Money - Crazy Eddie CFO: 'We are in the golden era of white-collar crime', by Matt Egan

November 12, 2014: New Jersey Newsroom - N.J. “Safe Investing” Summit to Include "Big Crooks" and Top Investigators by Jeff Lamm

November 12, 2014: Cliffview Pilot - ‘Crazy Eddie’ securities fraud mastermind joins summit on how to avoid investment scams by Jerry DeMarco

November 3, 2014: Going Concern - Somehow People Are Still Falling for Stupid IRS Scams by Adrienne Gonzalez

November 3, 2014: Attestation Update - What’s the better description – “Audit” or Limited Review of Financial Statements by Jim Ulvog

October 27, 2014: Attestation Update - Frauds are a cancer destroying capitalism by Jim Ulvog

October 23, 2014: Attestation Update - Huge fines are a tax on illegal behavior by Jim Ulvog

October 15, 2014: Attestation Update - Is the cost of reducing fraud risk greater than the loss from a fraud incident? by Jim Ulvog

October 13, 2014: Attestation Update - Nonprofits cannot *prevent* fraud but they can reduce the risk by Jim Ulvog

September 17, 2014: Attestation Update - The world’s oldest profession? Fraudster by Jim Ulvog

September 11, 2014: Yahoo Finance - Words of wisdom from the 'Wolf of Wall Street' by Rick Newman

September 5, 2014: Going Concern - KPMG's Re-Audit of Ventas Teaches Us Boning Doesn't Necessarily Ruin an Audit by Adrienne Gonzalez

August 29, 2014: Seeking Alpha - Is Nu Skin Insolvent by Mohan Murali

August 17, 2014: Seeking Alpha - Nu Skin's Accounting: More Red Flags by Jan Nikken

August 10, 2014: Jyllands-Posten (Translated) – The scammer who would do it all again, By Martin Flink

July 30, 2014: GuruFocus Keurig Green Mountain: The Case For A Copy-Cat Short

July 29, 2014: Wall Street Journal Live - BUSINESS
White Collar Crime 101: How to Defraud a Company

July 29, 2014: Marketwatch - Sam Antar: The CFO behind the Crazy Eddie’s fraud -The prices were insane; the fraud was brazen by Quentin Fottrell

July 29, 2014: Marketwatch - 6 white-collar criminals for hire by Quentin Fottrell

July 29, 2014: Going Concern - Defunct Crazy Eddie Won't Let Fraud Get in the Way of Continued Excellence by Adrienne Gonzalez

July 25, 2014 Seeking Alpha - 24 Ways Herbalife Is Mocking The Regulators

July 14, 2014: Seeking Alpha - White Collar Crime Expert Slams Herbalife: An Exclusive Interview With Sam Antar

July 14, 2014: Going Concern - Accounting News Roundup by Caleb Newquist

July 11, 2014: New Jersey Society of Certified Public Accountants – How to Get Good Reviews on the World’s Social Media Stage, By Tony Stefanelli, CPA

July 9, 2014: Going Concern - All These Years Later the Fraud Triangle Is Still a Staple by Adrienne Gonzalez

July 9, 2014: Fraudbytes - A Fraudster's Paradise by Aaron Zimbelman

June 19, 2014: Forbes - A Federal Judge Is Defendant's Last Chance At Mercy, But It's Hard To Find by Walt Pavlo

June 12, 2014: Going Concern - Listen to a Fake IRS Agent Try Telling Ex-Crazy Eddie CFO He's About to Be Arrested by Adrienne Gonzalez

June 12, 2014: Mathew Martoma, Sam Antar Has Some Advice For You by Walt Pavlo

June 1, 2014: Seeking Alpha - NQ Mobile's Audit Is A Dangerous Lose/Lose Situation

May 9, 2014: Going Concern - Footnotes by Adrienne Gonzalez

April 29, 2014: Going Concern - CFO Felon Not Sure Why AICPA Didn't Pick Up the Phone to Talk About His Fraud by Adrienne Gonzalez

April 28, 2014: Going Concern - Now That He's Sentenced, Scott London Plans For the Future by Adrienne Gonzalez

April 13, 2014: Crain's New York Business - Nobody Beats the Wiz family's fall by Aaron Elstein

April 9, 2014: Going Concern - Man Sentenced For Fraud While Waiting To Serve First Sentence for Fraud by Adrienne Gonzalez

March 12, 2014: InvestorPlace - HLF Stock: Run From Herbalife (And Consider Ditching Other MLMs) by Jonathan Berr

February 21, 2014: Bloomberg - Why Drug Lords and Criminals Are So Risk-Adverse by Ben Steverman

January 30, 2014: MarketWatch - Con man Minkow told me he had changed, but he was lying by Al Lewis

January 14, 2014: Going Concern - If You're Going to Commit Fraud, Avoid These Obvious Phrases In Your Company Email (Duh) by Adrienne Gonzalez

January 7, 2014: Going Concern - ex Crazy Eddie CFO Shares a Helpful Hint For Inventory Counts by Adrienne Gonzalez

January 7, 2014: Going Concern - Accounting News Roundup by Caleb Newquist

January 7, 2014: Extortion in Armenia - What Are The Traits of a White Collar Criminal by Bill Mavridis

January 6, 2014: Film Drunk - The Hollyweird Legal Round-Up: Shia LaBeouf (Allegedly) Went Method for Securities Fraud by Buttockus Finch, Esq.

January 5, 2014: Gary Weiss - Judge Fines Overstock.com $6.8 Million, Rules It Needs a 'Price Coach'