Big news out of the largest lead generation scandal in history.

For back story on the case between LG Technologies and Edward Shin, Chris Smith and others please read the following articles, starting with this one.

It was released recently that Edward Shin, the main defendant of the charges made by LG Technologies switches his pleas to GUILTY. According to the minutes made available through Riverside Court house Shin has switched is plea, waives his right to a jury trial, waives his right to cross examine the witnesses and waives his right against self incrementation.

Here is an excerpt from the minutes:

Case SWF029673 Defendant 1418661 SHIN, EDWARD YOUNGHOON
Defendant 1 of 1
Action:
Case SWF029673 Defendant 1418661 SHIN, EDWARD YOUNGHOON
Action: Preliminary Hearing Date: 05/26/2010 Time: 8:30 AM
Division: S201 Hearing Status: DISPOSED
HONORABLE KELLY L HANSEN PRESIDING.
COURTROOM ASSISTANT: SLH-S. HOLDER
COURT REPORTER: TF-T. FRAZIER
PEOPLE REPRESENTED BY DEPUTY DISTRICT ATTORNEY: TOREY NASIF.
DEFENDANT REPRESENTED BY PVT STEVE HARMON.
DEFENDANT PRESENT.

AT 10:17, THE FOLLOWING PROCEEDINGS WERE HELD:
DEFENDANT’S COUNSEL WAIVES FORMAL ARRAIGNMENT.
DEFENDANT WITHDRAWS PLEA OF NOT GUILTY AS TO COUNT(S) 01 AND IS REARRAIGNED.
DEFENDANT PLEADS GUILTY TO COUNT(S) 01.
DEFENDANT ADMITS ENHANCEMENT(S) D8 IN COUNT 01.
FELONY PLEA FORM IS INCORPORATED HEREIN AND INCLUDES THE FOLLOWING ADVISEMENTS
AND WAIVERS:
DEFENDANT ADVISED OF RIGHT TO A SPEEDY AND PUBLIC TRIAL BY JUDGE OR JURY.
DEFENDANT ADVISED OF RIGHT TO CONFRONT AND CROSS EXAMINE WITNESSES; RIGHT TO
PRESENT EVIDENCE ON OWN BEHALF.
DEFENDANT ADVISED OF RIGHT TO ASK COURT TO COMPEL WITNESSES TO ATTEND TRIAL AT NO
EXPENSE.
DEFENDANT ADVISED OF PRIVILEGE AGAINST SELF INCRIMINATION.
http://public-access.riverside.courts.ca.gov/Ope…actioncode=PH&actiondate=20100526&actiontime=8.3 (1 of 2) [5/27/2010 11:03:28 AM]

SWF029673 – Minutes – Riverside Criminal & Traffic
DEFENDANT ADVISED OF RIGHT TO COUNSEL; CONT. TO CONSULT COUNSEL; ASSIGNMENT OF
COUNSEL IF UNABLE TO EMPLOY PRIVATE COUNSEL.
DEFENDANT WAIVES RIGHT TO JURY TRIAL.
DEFENDANT WAIVES RIGHT TO CONFRONT AND CROSS EXAMINE WITNESSES.
DEFENDANT WAIVES RIGHT TO ASK COURT TO COMPEL WITNESSES TO ATTEND TRIAL AT NO
EXPENSE.
DEFENDANT WAIVES PRIVILEGE AGAINST SELF-INCRIMINATION.
DEFENDANT ADVISED OF CHARGES AND CONSEQUENCES OF HIS/HER PLEA AND STATUTORY
SENTENCING.
DEFENDANT ADVISED OF CONSTITUTIONAL RIGHTS.
DEFENSE COUNSEL CONCURS IN DEFENDANTS PLEA AND/OR ADMISSIONS.
COURT FINDS PLEA IS FREE AND VOLUNTARY. COURT FINDS DEFT. KNOWS AND UNDERSTANDS
CONSTITUTIONAL RIGHTS, NATURE OF CHARGES AND CONSEQUENCES OF PLEA.
COURT FINDS FACTUAL BASIS FOR THE PLEA IS BASED ON COM-COMPLAINT.

COURT ACCEPTS PLEA.

CASE CERTIFIED TO SUPERIOR COURT
COMMENCE CERTIFICATION
DEFENDANT WAIVES PROBATION REFERRAL.
SENTENCING IS SET FOR 12/09/2010 AT 8:30 IN DEPT. S201.
DEFENDANT WAIVES TIME FOR SENTENCING TO 12/9/10.
SPECIFICATION OF PLEA: PS 180 – IF RESTITUTION IS NOT PAID IN FULL BY
11/14/10 – LOW TERM 16 MONTHS.
CRUZ WAIVER TAKEN.
ORAL MOTION BY PEOPLE REGARDING DISMISS REMAINING COUNTS IS CALLED FOR HEARING.
MOTION GRANTED
COURT ORDERS ENHANCEMENT(S) NP IN COUNT 01 STRICKEN.
COUNT(S) 02 DISMISSED IN THE INTEREST OF JUSTICE. (1385 PC)
ORAL MOTION BY DEFENSE REGARDING EXONERATE BAIL BOND AND RELEASE O.R. IS CALLED
FOR HEARING.
MOTION GRANTED
CURRENT BAIL BOND EXONERATED.
DEFENDANT ORDERED TO RETURN ON ANY AND ALL FUTURE HEARING DATES.
RELEASED ON O.R.

This admission of Embezzlement now puts the spotlight on on the co-defendants on the case, I would think. As one of the biggest scams put on on lead gen space, one that involved redirecting lead volume, accepting checks on behalf of LG Technologies and possible joint conspiracy with other lead gen insiders. it would appear to be close to an end. We will now need to see how this reversal will affect the other parties involved in the case.

As usual, I will keep you posted.

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One of the biggest lead generation scandals continues with the addition of more evidence and documentation made public through the Riverside Court Public Access portal. If you have not been following the case or not aware of what is being alleged, you can view previous posts here.

As usual, I want first state that I am not an attorney or have any legal education so the following post is only my uneducated interpretation. I am also closing the comments on any scandal related post, because there have been a number of comments made about Shin that are simply not backed by any public records, that I know of. If you have any comments, feel free to email me.

So whats new? On the 22nd of February this file was posted in Riversides Public Access portal. It lists a number of communications between Shin, Smith, Diana and Hall. The emails begin at page 50 and continue on at page 99 of the document and discuss the plan between Smith and Shin to grow LP Services, the investment of $200k from Diana into LP Services and several emails referring to sending leads to LeadPoint and diverting leads from LG to LeadPoint.

What these docs seem to do is reinforce the alleged knowledge of Diana and LeadPoint of the questionable relationship and actions that were occurring between Shin and LG Technologies. From what I can tell, however, is it is still not cut and dry. While there are communications, business relationships created, and discussions about payments with LeadPoint representatives it is still unclear that they new anything about the alleged theft that was going on. In my opinion the plaintiffs case does seem to be getting stronger.

I will leave it up to you to review and determine your own opinions.  The first 12 pages of the document will give you an overview of the allegations and the newly submitted evidence.

Update 4/12/10:

Because the comments are closed on all posts relating to this case I received a written response from the legal staff at LeadPoint, Inc.

You can read the response below:

Concerning the LG Technologies v. Shin et al Litigation:

Some readers of this blog may be familiar with an ongoing legal dispute which LeadPoint became involved with last year:  LG Technologies of California, Inc. v. Edward Shin et al. The case dealt with allegations that Mr. Shin and others, including his company LP Services, LLC, embezzled money from LG Technologies during his tenure as company president. LeadPoint was named as a co-defendant in the case, and was accused of somehow conspiring with Mr. Shin and assisting in the alleged embezzlement.  LeadPoint vehemently denies these absurd and baseless allegations; they are simply untrue. LeadPoint will defend itself to the fullest extent of the law, and LeadPoint is certain that it will be completely exonerated of any wrongdoing. In fact, LG recently withdrew (under the threat of legal sanction) a series of proposed “amendments” to its complaint that made reference to LeadPoint.  The case has been put on hold by the court for an indefinite period at the behest of Mr. Shin, pending the outcome of a criminal investigation into his alleged activities.

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One of the biggest lead generation scandals of the year is going to continue into 2010, but it is not going to leave 2009 without one more big break in the case.

A brief review of the case can be found here and here.

If you are familiar with the case you will remember that in Shin’s deceleration he claimed payment of $150,000, that mysteriously ended up in his bank account from LeadPoint, back to LG Technologies. According to new documents made public by the court, Shin is now being charged with Perjury and Contempt. According to bank statements provided by US Bank, the cashiers checks Shin claimed were made out to LG Technologies were actually made out to the Wynn Hotel. That is correct. Shin’s copy and paste skills were not enough to keep this lie out of the courts and could possibly destroy his whole defense.

This is a huge break for LG Technologies and clearly shows that Shin has lied at least once with details of is claims.

You can view the two court documents and the bad checks here and here.

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In May of this year I revealed an interesting case between a lead generation company and a few of its key employees. The case, which you can read about here in my original post, included allegations of fraud, embezzlement and contract infringement, now has a few new updates to mention.

Today the Riverside County Sheriffs department has released information on their website (Case #TE092660124) that they have taken Edward Shin into custody. Shin has been given a $575,000 bail. Details below:

I am not an attorney nor have I ever studied the Law, but according to the court documents listed here (Once you log in you can search LG Technologies and the case info will come up) it would appear as though LeadPoint has also filed a cross complaint against Shin on 9/11/09. The details of this complaint are unknown, but I will keep you posted as the case proceeds and try to provide details when they are available.

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Last post I gave a brief synopsis of the original complaint submitted by LG Technologies and also picked a few statements from Edwards Shin declaration.

One of the bigger complaints or allegations made by LG is that Shin purposely diverted payments into his own personal bank account that was supposed to have gone into LG’s account. They also claim that it is possible that LeadPoint or Marc Diana were involved with the misdirection of payments. Both Shin and LeadPoint refute these allegations in their declarations.

Shin claims that it was simple mistake due to similar username and passwords and that every mis-directed payment was paid to LG with cashier checks and that everything was made right as soon as he was aware of the error. Just to remind you, LG is claiming that over million dollars were mis directed into Shin’s personal account. According to Thomas Moyes, LG’s CFO, declaration made on 4/21 and the submission of LG bank statements, Shin did not make all the payments he claims to have made. LG bank statements show that Shin only paid back $496,679.64 out of the $1,071.679.61.

In defense of any collusion with LeadPoint, CFO Jeff Spain made a declaration recounting the happenings from their point of view. Spain claims first that LeadPoint has no control of over where payments are sent to and that is left completely up to the user. All users/clients of LeadPoint set up and have full control of their accounts via an online portal that is username and password protected. LeadPoint, according to Spain, has no knowledge of the passwords of users or have any ability to manipulate account details. With regards to the missing payments in LG’s account, Spain claims that after being aware of the situation made by LG’s CFO, Moyes, proper steps were taken to inform Shin that payments were being directed to a wrong account and that it needed to be changed. Emails submitted to the court support Spains statements. Spain also claims that he personally followed up with Shin to insure that the proper steps were made and according to Spain, Shin assured him that everything was taken care of. At that point he assumed everything was corrected.

Spain then was surprised to receive another email from Moyes stating another discrepancy. At that point Spain provided detailed payment records to Moyes of where the money was sent to.

Any thoughts on this case????

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A recent case has popped up in the Southern California Superior Court of Riverside and is bound to turn a few heads in the lead generation industry. Accusations of fraud, stealing and diverting of leads are at the top of the list for this case.

The complaints set by LG Technologies of California on 04/02/09 are against Edward Shin, former VP of Business Development of LG, Karen Shin, Christopher Smith, Iris Sunwoo, LeadPoint Inc, Marc Diana, Breakwater Ventures and Breakwater Ventures II.

The information I am about to discuss is public information and can be found by accessing the public access portal for the Riverside Court. At this point in the case the defendants remain innocent of any allegations and have not received their full due process.

Here is a synopsis of the complaint and this does get a little tricky, so try to follow:

LG complains that Edward Shin, hired as VP of Business Development Feb. 2008, formed a company, LPS, so that he could direct leads from the LG lead exchange into LPS at a significant discount and then resell the leads to currnet LG clients, including LeadPoint and others. The creation of LPS, according to LG, is a violation of trust because of its alleged direct competition. Shins statement claims that there is no competition because LPS works with radio advertisements, not TV, which LG specializes in. Shin states that he came to LG CEO, Grey, numerous times encouraging LG to get involved with Radio and was turned down after a 1 month test. Shin claims after the test failed he created LPS.

According the the complaint, Shin had hired Chris Smith, a former LeadPoint employee, who had a current non-compete in place with LeadPoint, and that on the same day of Smiths hire at LG was terminated by LeadPoint. The complaint questions the intent of LeadPoint and good friend, Marc Diana, to allow Smith to work as a consultant for a direct competitor. Smith, who was hired at LG by Shin, was also hired by Shin through LPS at the same time, which allegedly broke Smiths consulting agreement with LG. According to the complaint Shin paid Smith $13k to $14k per month at LPS, while he also was consulting for LG. Smith also was given 40% stake in LPS.

Again, according to the complaint, LPS acquired leads from the LG exchange at a significant discount and then resold them at a profit. By Selling the leads to current LG client, LeadPoint, LPS was allegedly stealing profits from LG and committing fraud. LG states that Shin alone or in collusion with Smith, Diana and LeadPoint arranged to have LG receivables paid directly into Shins personal bank account to the tune of $1 million. Shins states that payments were made to him by mistake, due to similar usernames and passwords and were paid back immediately via cashiers checks. Shins banking records and LeadPoint spreadsheets show deposits equaling to more then $300k in a single month from LeadPoint and were never disclosed to LG.

Complaints were made by LG that prior to Smiths hire at LG and while still working at LeadPoint, Smith set up accounts for LPS in LeadPoints lead exchange platform to be able to sell leads. LG complains that rather then an LPS account it should have been an LG account. LG also claims that Shin and Smith were managing radio campaigns and diverting leads to LeadPoint and others while they should have been performing the same duties for LG.

According the complaint by November 2008 Shin and Diana were negotiating a deal that would give Diana a $200k or 5% stake in LPS. Shin and Smith also allegedly used LG owned radio spots for their own benefit by swapping out web addresses that were placed within the aired spots. Shin denied any involvement with LeadPoint, Diana, Smith and LPS.

Shin claims no wrong doing and states that their were no conflicts of interest.

The questions that will be answered is if this was a money swindling scheme to boost profits, acquire cheap leads and get rich quick or is this an upset employer who passed up on a money making opportunity to only be upset of the success of its employee? The timing of employment, whether or not companies are in direct competition and if monies were paid to the right company are in question. It is left for the courts to decide that and I will be following.

More to come.

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