TELECOM Digest OnLine - Sorted: Re: Any News on the Feds v. Norvergence?

Re: Any News on the Feds v. Norvergence?

Lisa Hancock (
10 Nov 2004 07:03:52 -0800 (Satchel Paige) wrote:

> What kind of recourse do I have? I originally reported Norvergence to
> the FTC in September of 2003. I then posted Norvergence's fraud here
> to warn everyone about them and to ask everyone to report Norvergence
> to the FTC as well. Norvergence sued me. And because I could not
> afford to travel from California to New Jersey, let alone to hire a
> New Jersey attorney, a default judgement was passed against me.

You probably need a lawyer.

Did they attempt to execute the judgment and did you have to pay
them money? If so, I don't think you'd be able to get that money

If they did _not_ execute the judgement you're probably ok, but
you would still need to consult a lawyer about it. Possibly you
may need to file a counter claim 'for the record' to protect yourself
but again a lawyer has to advise you.

As an individual, you have the right to file criminal charges
against the principals of the corporation. But as others
mentioned, this isn't easy. Again, a lawyer would have to advise.

William Van Hefner <> wrote

> Norvergence has no one to represent them, because they no longer
> exist. Period. Any consumer who is hoping to get any type of
> compensation or restitution in this matter is basically SOL, insofar
> as the law goes. At best, they may be able to get out of the rest of
> their lease payments.

Merely filing for bankruptcy does not grant bankruptcy. Has that
relief and authorization to liquidate been granted? Normally, the
creditors would get their say in court as to dissolution of the

> ... The only way such a thing could be done is if a
> complaining party can prove that the officers and shareholders of the
> company intentionally set out to defraud them criminally. In that
> case, consumers could go directly after the corporate officers and
> shareholders of Norvergence. This is commonly known as "piercing the
> corporate veil". In this particular action, no entity that I am aware
> of has targeted the officers or shareholders for personal liability or
> criminal prosecution though. It is very rare for any entity or
> government agency to be able to be able to prove criminal intent in
> cases such as these, so most don't even try.

I'm surprised "most don't even try" to go after officers of a
corporation with suspicious activities. I agree it wouldn't be an
easy task, but not doing so would leave the door open for whitespread
white collar fraud: open a business, take everyone's money and hide
it, then declare bankruptcy.

It seems a reasonable question to ask what happened to all the money
the leasing companies paid to N/V for which nothing was returned. It
seems reasonable that the officers of the corporation be called in
with their financial records -- including salary and capital
withdrawals --to explain the cashflow of the business and to answer
questions and provide documentation if an expenditure seems

> It would probably bust the budget of most states or even the FTC
> itself to hire enough lawyers to be able to build a winnable case of
> this kind.

It would take some effort, but I don't think a budget busting effort.
The prosecution of Enron and Arthur Andersen officers is going slowly,
but it is going on and people have been sent to prison. Perhaps a
combined effort of the leasing companies and the government might

> Even if they did, the officers and shareholders of Norvergence
> likely have their money packed away in Swiss bank accounts by now,
> so any award would likely be meaningless to consumers.

Prison terms have a way of opening up such bank accounts.

> The moral of this story is, don't depend on the government to bail you
> out of a bad business deal, no matter how screwed up it is. Once they
> have your money, it is likely gone for good. Do your due diligence on
> matters of such importance. An ounce of prevention is worth a pound of
> cure in matters such as these.


BTW, in one newspaper report, a leasing company representative claimed
they weren't responsible for what the customer bought with the lease
money, anymore than if a wall caved in a house that was mortgaged.
But that's not quite true. When you buy a house with a mortgage, the
mortgage company does go out and perform an appraisal and inspection.
Sometimes the mortgage application is rejected because the appraised
value is too low or there are significant repairs required. In other
words, the mortgage companies won't loan you $200,000 to buy a
$100,000 house.

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