Angie's List has been in business for nearly two decades but has never turned a profit. Second quarter earnings reported by the company at the close of the stock market today didn't disappoint the company's many skeptics. Despite a 33% increase in revenues over the same period a year ago, the company reported losses of $18.4 million for the quarter, up from $14.3 million from the prior period last year. That's a larger than expected loss at the same time its second quarter revenues of $78.9 million was lower than expected. Net losses for the year topped $22 million, almost exactly where the company's losses stood at this point last year. The company's stock was trading down nearly 15% an hour after the markets closed, trading well below $9 a share.
Perhaps the most disturbing trend in the numbers is Angie's List's growing reliance on its revenues from service providers. Service provider revenues are growing faster than revenues from memberships sold to consumers who supposedly rate those service providers. Angie's List now relies on 77% of its revenues from service providers. In addition, its marketing costs continue to soar. The cost of signing up a new member increased from $80 a year ago to $90 for the most recent quarter according to Seeking Alpha's David Trainer. "These two numbers reinforce the fact that ANGI, which markets itself as a 'consumer driven organization' is actually beholden to service providers, and consumers recognize that fact," Trainer notes in questioning the reliability of its ratings.
Wednesday, July 23, 2014
Secretary Of State's Securities Division Recovers Impressive Sum From Ponzi Schemer's Accounting Firm
Indiana Secretary of State Connie Lawson announced this week that her agency's security division had reached an agreement with an Indianapolis-based accounting firm, DeWitt & Shrader, to pay $1.8 million to settle a lawsuit her office brought against the firm for its work on behalf of convicted Ponzi schemer Keenan Hauke's Samex Capital Partners, LLC. That represents about 25% of the $7.1 million in restitution and most assuredly represents a significantly larger amount than the firm received for its work. Hauke was ordered to repay the $7.1 million as restitution to nearly 100 defrauded investors. Lawson's office had already returned over about $1 million to the investors that it has recovered from Hauke's remaining assets.
In sharp contrast, the bankruptcy trustee for Fair Finance recovered only $500,000 from Indianapolis-based Somerset CPAs for the work it performed on behalf of various business entities owned by convicted Ponzi schemer Tim Durham, who defrauded thousands of Ohio investors out of more than $200 million. That amount didn't even cover the amount of fees the accounting firm had been paid for its work over a several year period. Someret took over the accounting work after two separate accounting firms walked, finding too many discrepancies and problems with the companies' financials. An accountant for the resigning accounting firm wondered how Somerset could issue "a clean opinion on Fair" after the "serious issues" he had uncovered.
After federal authorities convicted the Illinois city of Dixon's former comptroller, Rita Crundwell, of embezzling $54 million from the city over a 20-year period, attorneys for the city went after two accounting firms that performed audit work for the city during that period to recover some of the losses. Clifton Larson Allen agreed to repay the city more than $35 million for its failure to uncover the theft. Another local accounting firm in Dixon, Janis Card Associates, agreed to repay the city $1 million. Fifth Third Bank also agreed to repay the city $3.85 million for its failure to detect anything wrong as it processed numerous wire transfers from government accounts into Crundwell's personal bank accounts.
Brian Bash's work as bankruptcy trustee on behalf of the defrauded Fair Finance investors leaves much to be desired. He has recovered so far less than 5% of the amount investors lost in Durham's Ponzi scheme. Nothing has been returned to the investors because Bash's fees and expenses to date have consumed what little he has managed to recover. Many large judgments he obtained against Durham and his business partners will likely never be recovered as they rot the rest of their lives away in a federal prison.
In sharp contrast, the bankruptcy trustee for Fair Finance recovered only $500,000 from Indianapolis-based Somerset CPAs for the work it performed on behalf of various business entities owned by convicted Ponzi schemer Tim Durham, who defrauded thousands of Ohio investors out of more than $200 million. That amount didn't even cover the amount of fees the accounting firm had been paid for its work over a several year period. Someret took over the accounting work after two separate accounting firms walked, finding too many discrepancies and problems with the companies' financials. An accountant for the resigning accounting firm wondered how Somerset could issue "a clean opinion on Fair" after the "serious issues" he had uncovered.
After federal authorities convicted the Illinois city of Dixon's former comptroller, Rita Crundwell, of embezzling $54 million from the city over a 20-year period, attorneys for the city went after two accounting firms that performed audit work for the city during that period to recover some of the losses. Clifton Larson Allen agreed to repay the city more than $35 million for its failure to uncover the theft. Another local accounting firm in Dixon, Janis Card Associates, agreed to repay the city $1 million. Fifth Third Bank also agreed to repay the city $3.85 million for its failure to detect anything wrong as it processed numerous wire transfers from government accounts into Crundwell's personal bank accounts.
Brian Bash's work as bankruptcy trustee on behalf of the defrauded Fair Finance investors leaves much to be desired. He has recovered so far less than 5% of the amount investors lost in Durham's Ponzi scheme. Nothing has been returned to the investors because Bash's fees and expenses to date have consumed what little he has managed to recover. Many large judgments he obtained against Durham and his business partners will likely never be recovered as they rot the rest of their lives away in a federal prison.
South Bend Tribune Wants Council Member To Resign Following Drunk Driving Arrest
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| South Bend Common Council member Henry Davis, Jr. |
In January, Davis stirred controversy when he posted an obscene bestiality photo on his Facebook page, which he explained was "an unfortunate mistake." He recently stirred controversy again with an offensive Twitter post he made about Republicans and abortion. Davis has also tussled with South Bend Police. He came under fire in 2012 after sending a letter to the Justice Department accusing members of the police department of racial bias after improper recordings were made by city officials of their phone calls. Several police officers are suing him, accusing him of libel. He was later given two traffic citations by police and charged with resisting arrest, which he claimed was in retaliation for the letter he sent to the Justice Department. "Davis knows what he's done and if poor judgment has again ended in actions that disrespect the public, then Davis should take responsibility and do the right thing by stepping down," the Tribune editorial reads.
Tuesday, July 22, 2014
Obama State Department: The Russians Did It Because That's What We Learned From YouTube And Social Media
AP reporter Matt Lee is apparently the only mainstream reporter inside the Washington Beltway who is challenging the Obama administration to produce what evidence it has to support its conclusion that the Russians and the rebels they back are responsible for firing a missile that allegedly blew Malaysia Airlines Flight #MH17 out of the sky at 33,000 feet, killing all 295 passengers and crew aboard the Boeing 777 aircraft. What Lee learns from State Department spokesperson Marie Harf after much poking and prodding of her is that the American assessment that the rebels and the Russians are likely responsible for bringing the airplane down is primarily based on a YouTube video and supposed social media posts in which the rebels claimed credit for downing the airplane.
There are reasons to doubt the authenticity of the social media posts that were quickly taken down. A YouTube video claiming that the Russian-made Buk missile launcher that was allegedly used in the attack was observed returning to Russia shortly after the attack has been completely debunked. As it turns out, the video was taken back in May at an entirely differently location in Ukraine. The evidence almost immediately produced by the Ukrananian government of audio of a supposed exchange between a Russian commander and a rebel leader discussing the plane being shot down also appears to be of dubious origin.
Russian officials presented satellite and radar evidence to make its case that neither they nor the rebels were responsible, while the Ukranian and American governments are withholding any forensic evidence they have to support their contentions. A second aircraft that was likely a Ukranian fighter jet was shown on radar very near MH17 before it crashed according to the Russians. Satellite imagery produced by the Russians also showed several Buk ground-to-air missile launchers in the area close to where the plane crashed. The Russians insist those missile systems could only belong to the Ukranian government. No explanation has been offered as to why the airplane veered off its planned route, traveling further east over an area of the Ukraine commercial pilots knew was unsafe for air travel. Even more troubling is a report by investigative reporter Robert Parry, who claims a source within the U.S. government has told him that U.S. satellite imagery actually shows that the likely missile battery used to shoot down MH17 was under the control of Ukranian government troops dressed in Ukranian military uniforms.
It is unclear to me why the American news media is so quick to accept the Obama administration's rapid conclusions about what happened to MH17 given its recent track record. The administration completely lied to the American public and Congress about the circumstances of the attack on the Benghazi consular outpost that claimed the life of Ambassador Chris Stevens and three other Americans. It then falsely accused the Assad government of launching chemical weapons attacks in Syria as an excuse for escalating American military intervention in that country's civil war on the side of the rebels, whom have been trained, funded and armed by the U.S. government. We later learned that the rebels and not the Assad government was responsible for the chemical weapons attacks. Those same rebels, now calling themselves the Islamic State in Iraq and Syria ("ISIS"), have spread their war into Iraq, seizing large portions of that country while inflicting a large number of civilian casualties. One doesn't have to like the Russians to question our own government's motives in laying the blame for the loss of MH17 at their doorstep regardless of where the real evidence points.
UPDATE: Watch CNN's Chris Cuomo and a Russian Times correspondent Peter Lavelle quarrel over responsibility for the downing of MH17. Cuomo claims without substantiation that the U.S. government has been forthcoming with forensic evidence that supports its assessment. Contrast Cuomo's questioning of Lavelle with Lee's questioning of Hart. It's not hard to conclude which is a real journalist.
Journal-Gazette Editor: Indiana Is An Ethical Swamp
The Fort Wayne Journal-Gazette's editor Karen Francisco had a spot-on column this past weekend condemning the state's ethics laws in the wake of the slap on the wrist handed to former Education Superintendent Tony Bennett received for transgressions that landed criminal charges against one of his predecessors. It's so bad in Indiana that State House leaders actually advise constituents on which lobbyists they should hire. She says the lacks of ethics enforcement in the Hoosier State ensures nobody from this state will make it to the White House.
Indiana Inspector General David Thomas and the state ethics commission dispensed with the Tony Bennett mess as quietly as possible, but making something disappear doesn't mean it never happened or that it should have happened in the first place.
Bennett's champions outside Indiana have an easier job because their audiences don't know the details of the former state superintendent's transgressions and don't realize they represent just more of the muck in the ethical swamp of Indiana state government.
Under one-party rule, anything goes here. Democratic elected officials in northwest Indiana have appropriately noted that the same campaign violations for which Bennett was fined $5,000 have sent politicians there to prison.
“We don't have an ethics commission in northwest Indiana. We have the FBI," Hammond Mayor Tom McDermott Jr. told a radio station.
At the Statehouse, however, the most blatant of conflicts can be dismissed and anyone daring to point them out can be labeled as a "self-serving opportunist" or "crusading journalist." . . .
Indiana's leaders make no apologies for the ethical mess. Like Bennett's champions, they wonder aloud how anyone could possibly suggest these "public servants" are doing anything but serving Hoosiers.
The problem for them, however, is that the swamp doesn't go beyond Indiana's borders. When one of these public servants makes a bid for a post elsewhere, they quickly learn what is acceptable in Indiana is not only frowned upon most everywhere else -- it's not legal most everywhere else. That's why you won't see a former Indiana governor in the White House for awhile and why Florida's commissioner of education is not a Hoosier.
That's all good for people elsewhere, but those of us who call Indiana home continue to live in an ethical swamp.Boosters of Gov. Mike Pence's presidential hopes should take Francisco's comments seriously. Former Gov. Mitch Daniels dropped talk of running for president in 2012 like a hot potato after reporters outside the state started examining aspects of his personal life and corrupt dealings as governor that received very little coverage beyond the blogs within the Hoosier state. Those reporters are already similarly starting to dig into Pence's past, and they're already chomping at the bit to take on his record. Remember, the mainstream media holds Republican candidates to a much higher standard than the Clintons or Obamas.
Monday, July 21, 2014
Judge Orders Ballard Administration To Turn Over Concealed ROC Documents
After months of stonewalling by city officials, Marion Co. Circuit Court Judge Louis Rosenberg has finally issued an order compelling the Ballard administration to produce public documents related to the one-sided lease agreement the City entered into with a campaign contributor of Mayor Greg Ballard for the Regional Operations Center at the site of the former Eastgate Consumer Mall to a special council committee investigating the lease deal. According to WISH-TV, the order signed by Judge Rosenberg compels city attorneys to produce documents related to the cost of sites other than the former Eastgate Mall property; documents related to the city’s obligation to provide security during the 2012 Super Bowl; and documents related to expenses incurred with the ROC. Judge Rosenberg also asked city attorneys to review other documents requested by the ROC Investigating Committee.
The controversial lease was executed by former Public Safety Director Frank Straub, who bypassed normal approval processes for such leases through the corporation counsel's office. Straub rushed approval of the lease agreement through the City-County Council with the assistance of the Mayor's Office, which claimed the ROC had to be up and operational prior to the Super Bowl the City hosted in February, 2012. The form of the lease lacked standard provisions contained in typical government leases and included other unusual terms that favored the landlord over the tenant.
Straub had rejected a preferred site identified by the former head of the emergency management services near the Indianapolis airport that would have required little work and would have cost the City much less than the $18 million, 25-year lease Straub executed for the ill-suited Eastgate Consumer Mall site. Straub then fired the former EMS director and absorbed the functions of his agency into his department under the department's homeland security division led by former Perry Township Trustee Gary Coons, a political hack with no prior experience in homeland security. Straub relied on Councilors Ben Hunter (R) and Mary Moriarty-Adams (D) in whose district the ROC center resides and both of whom received campaign contributions from the building's owner to usher approval of the lease agreement through the council with little discussion. During public testimony, city officials lied to council members about the ability of the City to get out of the lease if it found the site unworkable. Councilor Hunter was highly critical of council members who initially sought to slow down the approval process to allow more time for their questions about the deal to be answered. Despite his conflict of interest, he is sitting as a member of the council's investigating committee where he has engaged in obstructionist tactics and sought to discredit the investigation at every step of the way.
Before Straub left his job to start a new job as Spokane's Chief of Police after being asked to step down, he and his staff allegedly destroyed almost all documents in the public safety director's office regarding the controversial lease agreement and wiped computer hard drives clean of any information that could be accessed by his successor, Troy Riggs. That's a criminal violation under Indiana law. Yet Marion Co. Prosecutor Terry Curry announced that his office would not be pursuing any criminal charges in the case after a dubious Indiana State Police investigation concluded that no laws had been broken despite the undisputed fact that it was a criminal act to destroy those public documents. The ROC Investigating Committee was able to obtain some of the missing documents from the building's owner, Alex Carroll. The ROC Investigating Committee also learned that Straub had ordered WCTY not to videotape any of the Public Safety Board's hearings for nearly a one-year period while discussions concerning the ROC lease occurred. Shortly after the council began investigating the lease, city officials entered into a settlement agreement with the landlord which relieved it of any liability and locked the City into the lease for its full term despite numerous problems with the property that forced city employees to evacuate it for nearly eight months due to unsafe conditions while the landlord made necessary repairs to it.
The controversial lease was executed by former Public Safety Director Frank Straub, who bypassed normal approval processes for such leases through the corporation counsel's office. Straub rushed approval of the lease agreement through the City-County Council with the assistance of the Mayor's Office, which claimed the ROC had to be up and operational prior to the Super Bowl the City hosted in February, 2012. The form of the lease lacked standard provisions contained in typical government leases and included other unusual terms that favored the landlord over the tenant.
Straub had rejected a preferred site identified by the former head of the emergency management services near the Indianapolis airport that would have required little work and would have cost the City much less than the $18 million, 25-year lease Straub executed for the ill-suited Eastgate Consumer Mall site. Straub then fired the former EMS director and absorbed the functions of his agency into his department under the department's homeland security division led by former Perry Township Trustee Gary Coons, a political hack with no prior experience in homeland security. Straub relied on Councilors Ben Hunter (R) and Mary Moriarty-Adams (D) in whose district the ROC center resides and both of whom received campaign contributions from the building's owner to usher approval of the lease agreement through the council with little discussion. During public testimony, city officials lied to council members about the ability of the City to get out of the lease if it found the site unworkable. Councilor Hunter was highly critical of council members who initially sought to slow down the approval process to allow more time for their questions about the deal to be answered. Despite his conflict of interest, he is sitting as a member of the council's investigating committee where he has engaged in obstructionist tactics and sought to discredit the investigation at every step of the way.
Before Straub left his job to start a new job as Spokane's Chief of Police after being asked to step down, he and his staff allegedly destroyed almost all documents in the public safety director's office regarding the controversial lease agreement and wiped computer hard drives clean of any information that could be accessed by his successor, Troy Riggs. That's a criminal violation under Indiana law. Yet Marion Co. Prosecutor Terry Curry announced that his office would not be pursuing any criminal charges in the case after a dubious Indiana State Police investigation concluded that no laws had been broken despite the undisputed fact that it was a criminal act to destroy those public documents. The ROC Investigating Committee was able to obtain some of the missing documents from the building's owner, Alex Carroll. The ROC Investigating Committee also learned that Straub had ordered WCTY not to videotape any of the Public Safety Board's hearings for nearly a one-year period while discussions concerning the ROC lease occurred. Shortly after the council began investigating the lease, city officials entered into a settlement agreement with the landlord which relieved it of any liability and locked the City into the lease for its full term despite numerous problems with the property that forced city employees to evacuate it for nearly eight months due to unsafe conditions while the landlord made necessary repairs to it.
GOP Prosecutor Candidate Hits Terry Curry For Allowing "Rampant Prosecutorial Misconduct" In His Office
Picking up on a theme in a recent blog post by IU Robert McKinney School of Law Professor Joel Schumm at the Indiana Law Blog, Marion Co. GOP candidate Duane Merchant issues a press release today taking Marion Co. Prosecutor Terry Curry to task for "rampant prosecutorial misconduct" happening under his watch since taking office in January 2011. Merchant's press release notes that Schumm's blog observed "22 cases since January 2012 in which an Indiana appellate court has found improper conduct by Democrat Prosecutor Terry Curry’s office." Schumm concluded, "Terry Curry, who was elected in 2010, is either oblivious to or unfazed by these opinions." The press release goes on to say:
Prosecutor candidate Duane Merchant vows to make changes. “I spent more than 20 years of my career as a Deputy Prosecutor and I’ve never heard of such an egregious number of violations,” stated Merchant. “There is simply no excuse for Prosecutor Curry to tolerate this level of misconduct. He is charged with leading that office and he has failed his legal duty to ensure that deputies conform to the Indiana Rules of Professional Conduct.”
If elected Prosecutor, Merchant plans a full review of all policies and procedures within the Marion County Prosecutor’s Office. “As Prosecutor, I’ll make it clear from day one that prosecutorial misconduct will not be tolerated and those who violate those rules will be held accountable,” concluded Merchant.
Duane Merchant is a veteran attorney with over 25 years of experience. He served over two decades as a Marion County Deputy Prosecutor. Duane has successfully prosecuted over 100 jury trials and well over a thousand court trials. He has also served in many supervisory roles during his tenure at the Marion County Prosecutor’s office.Schumm's blog post is well worth the read, which you can access here. He is equally as critical of the Supreme Court for failing to "expect at least as much of lawyers in the justice systems as it does [from non-lawyers]." "The Indiana Supreme Court leads the State’s judicial system," Schumm wrote. "If it shows little or no concern about prosecutor misconduct, one cannot expect the Court of Appeals, the Disciplinary Commission, and others to care much either."
Sunday, July 20, 2014
Indianapolis Man Kills First Wife And Released After Short Prison Sentence To Kill Second Wife
Militarized Police State The Cost Of Preventing Violence In Downtown Indy During Summer Celebration
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| Mayor Lil Greg showing off his bling for Black Expo's All White Party. Is that the Super Bowl ring he received as a gift thanks to the $50 million Indianapolis taxpayers spent hosting the 2012 Super Bowl? (Photo/Amos Brown) |
There's another event that takes place annually every June on the American Legion mall that draws more than 50,000 people crammed into one small area where alcohol is served and live stage music is performed. IMPD is so content that the gay revelers and their straight supporters who attend the Indy Pride Fest and Parade won't cause any crime-related problems that the department doesn't even bother to dispatch more than a handful of police officers to direct traffic in the area packed with residents and out-of-town visitors. Rarely are any arrests made during the event. The City of Indianapolis subsidizes the organization that sponsors Summer Celebration, which is chaired by Greg Wilson, a city employee in charge of doling out minority contracts for Mayor Ballard's administration, but Indy Pride has never received a single tax dollar as it continues to grow and contribute substantially to downtown tourism the weekend it is held annually. What's wrong with this picture, Mr. Mayor? If you're so concerned about building a vibrant downtown, why do you allow an event to be hosted annually that costs so much to patrol and causes visitors to avoid downtown like the plague?
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