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Tuesday
Mar222011

JAWA's Defense, Employees and Intimidation

I'm amazed that to this day, I still haven't seen a single journalist in Arizona write about the JAWA lawsuit and the incredibly lucrative, large text message scams.

AZ Disruptors is a site about software startups in Arizona, not about covering scams, but in the absence of the Arizona Republic and the Phoenix Business Journal actually doing some investigative reporting, I'm picking up their slack. I'm not sure why they're not covering this -- I've been in contact with virtually every local news vendor in the valley.

Anyway, yesterday, JAWA filed their counterclaim to Verizon's suit. It's quite a fun read. Lets break it down, shall we:

This is absolutely awesome and incredible insight. First, JAWA seems to be arguing that because they have 240 employees, somehow, the judge should consider that as part of their argument.

That's like Enron arguing "we have 30,000 employees at Enron..."

Then it gets better. In fact, it gets really good. They assert that they have been doing business with Verizon for 4 years and Verizon's share of the revenues (30% in this case) has been worth $30 Million since 2008. WOW! That means JAWA's share of the revenues JUST FROM VERIZON for the past 2 years has been over $70 Million!

That's worth repeating. $70 Million in revenues just from 1 of the 4 major cell phone carriers.

I know it seems impossible, but it gets even better! In another part of the counterclaim, JAWA claims:

 

In this part, they claim that the aggregators are withholding approximately $19 Million from JAWA. This is money the cell phone companies have already billed customers, but have not yet paid to JAWA. However, the aggregators apparently don't pay the content providers (Jawa, etc.) for approximately 90 days after the service is provided.

This is probably why AT&T was willing to give me back a 3 month refund -- but not more -- without a bigger fight. If that is in fact the case, the $19 million being withheld from JAWA's represents revenue for the past 90 days. At a $19 Million per 90-day run-rate, that puts JAWA's revenues at approximately $76 Million per year (assuming no growth) from the US alone.

But, that might be a low estimate, because in another part of the JAWA Counterclaim, JAWA indicates that "JAWA's revenues generated by customers of Verizon approximated $75 Million during the past twelve months."

I know what you're thinking. You're thinking it can't get better than that, right? Just wait, there's more! JAWA also claims, "Verizon has willingly accepted and retained the profits over the last four years from what it now describes as a 'criminal enterprise' even though, during this time, it audited these practices."

Wow! That sounds a lot like JAWA is saying Verizon is our partner in crime Premium SMS Services and we don't understand why they've turned against us, all of a sudden. This very well might be true. And, it may be possible that Verizon's change of heart was initiated by Texas Attorney General, Greg Abbott. If that's the case, Kudos to him!

JAWA's defense begs the question: Do the wireless companies knowingly allow these scams to continue?

Where Are JAWA's Employees in All This?

One might think that if JAWA is doing something wrong, with more than 240 employees, there would be at least one whistle blower, right? This is where things get interesting. Remember Enron? They had more than 30,000 employees. Bernie Madoff had a $50 Billion Ponzie scheme with hundreds of employees.

Often times, employees of such companies don't get to see the big picture. They get sucked into it or have personal reasons for staying quiet (think mortgages, children, and other responsibilities). They might also be worried or intimidated by their seemingly powerful employers who are often well-connected with politicians.

In JAWA's case, at least one employee is sticking up for them. Earlier today, I had the following comment posted on my blog by a person identifying themselves as "me":

"me" seems to be a really brave guy and a dedicated employee. He's also got an interesting name. But what I don't understand is this: If JAWA is a legitimate business why is "me" so concerned? His or her comment "...and if the ship goes down I will proudly go down with it" doesn't seem like something one would say about an honest company. Ships don't just go down without a reason.  Maybe the commenter knows that there are good reasons for this ship to go down.

Could Employees be Intimidated?

For the first time ever, my company Axosoft, has become the victim of intimidation techniques. Just this morning, Axosoft's Wikipedia page was vandalized. Take a look:

The link that was added to the Axosoft Wikipedia page goes to a Maricopa Superior Court page listing all the law suits that I've been a party to. I'm not certain who was behind the vandalized site, nor what their purpose was. Perhaps it is to tell me "hey, we're watching you!" Or is it to intimidate me?

Who is it from? It turns out the edits were done from an IP address related to a hosting provider known as http://www.defconservers.com, which itself looks like a shady hosting provider. Try calling their toll-free number: 1-800-998-3108. It could have been any of their customers who made the change. Or some hacker. But the timing is odd, wouldn't you say?

Intimidation doesn't work with me. It only lights the fire in my belly. But it goes to show that if someone is in fact trying to intimidate me -- and I hardly know anything about this case -- I can only imagine what the employees of a company that might be involved with fraud must endure. 

Here's the thing: if you let others intimidate and stop you from doing the right thing, then what does that say about your character? Only YOU get to define who you are.

If you know any information about this, you can email me directly. My email is hamids at axosoft - do it from an anonymous email, if needed. Don't let anyone intimidate you and stop you from doing what you know is right.

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Reader Comments (30)

I haven't had time to read this post yet, but I will. Something I find interesting, in a circumstantial way, is all of the vanity websites that Jason Hope maintains.

If you google Jason Hope and use their tools to restrict it to the last 24 hours, you will still find that google's first several pages are overwhelmed by recent changes to all of the Jason Hope vanity sites.

I have no idea why this would happen, my rank speculation is this is something I might to do obtain page rank and drown out bad news, or articles such as the one you've been posting.

(In partial defense of *me*, if I worked for a guy who, as you've said, grew the company from 50 to 250 employees, and seemed to have good salaries and good benefits, I might defend him too. On the other hand, if you want a bit more enlightening experience, go through the job application process at Jawa -- I don't know if what i encountered was Jawa's fault or their silly hiring company, but it was the worst, and most intrusive application I've ever seen.)

March 22, 2011 | Unregistered CommenterJerry

A new press releases...
http://www.marketwire.com/press-release/Tokutek-Enables-Big-Data-Scalability-on-MySQL-With-Support-for-Hot-Schema-Changes-1416081.htm

and it references more companies that appear to be bogus:
http://www.datamobilitygroup.com
http://tokutek.com/
http://tokutek.com/customers/

Looking at the "customers" of tokutek, you run across these sites...
http://www.theprofileengine.com/
http://www.profiletechnology.net/

both of those sites appear to be sites that are attempting to gain access to a Facebook Profile. If someone were to allow those, they are allowing those apps access to their personal information. They appear to be extremely fishy (do not Allow them to have access to a legit profile).

Keep digging...there is A LOT more to this...

March 23, 2011 | Unregistered CommenterTimmy

http://www.arizonafoothillsmagazine.com/extra-extra/news/1940-jason-hopes-take-on-celebrity-fight-night.html
guess when you steal millions from people, you get to party like a rockstar.

March 23, 2011 | Unregistered CommenterBobby

This FINALLY made the AZ Central website....only 2 weeks behind the times! It's a start.

http://www.azcentral.com/news/articles/2011/03/24/20110324scottsdale-jawa-texting-scam.html

March 23, 2011 | Unregistered CommenterAz Central

What does one do inside a 100,000 sq ft house?

See for yourself! http://www.arizonafoothillsmagazine.com/features/features/1544-peterson.html

Jason Hope should send out a Xmas Card to everyone he stole from to pay for all this!

March 24, 2011 | Unregistered CommenterScammed Verizon Cutomer

So, I've read all the posts. Thanks. Interesting info. Here's a jump I can't make, because I have Verizon. When I pay my bill, I pay Verizon a lump sum for all the charges assessed in a month. Presumably, Verizon is collecting this money directly from my checking account when I execute the transaction.

If I had charges added to my account, knowingly or unknowingly, my money would still be going to Verizon first in my lump sum, one-time, authorized monthly payment (or they shut my cell phone off).

So Jawa puts a $9.99 charge on my Verizon bill. How does Jawa collect that $9.99 out of the payment I sent Verizon?

OLI

March 24, 2011 | Unregistered CommenterOutsideLookingIn

OLI...
You are on the right track.... Jawa would obviously keep track of all monthly transactions. They would submit monthly invoices to Verizon. Verizon (and the other 3 big carriers) would cut Jawa a nice big check! Verizon was billing on behalf of Jawa. But Jawa setup (via their employees (co-defendants)) numerous LLC's... so Verizon was not paying Jawa directly! They were paying these LLC's monthly (fronts for Jawa).

Keep in mind the break down of the $$$.

For the $9.99 they collected each month from you... about 1/2 goes to Verizon, a piece goes to a middle man who handles the billing, and the rest (about $3 - $4) goes directly to Verizon.

Keep in mind... Verizon *thought* these were legitimate sites they were billing for! This need to be ultra-emphasized!

The thing everyone needs to remember is that when Jawa setup the LLC's via it's employees (named in the original Verizon lawsuit) these LLC's would then petition Verizon for an issuance of a short code. The sites they setup initially were very compliant in regards to the MMA and Verizon's own internal policies. Christa Stephens, Quinn McUllough, Steve Urhman, and Janet O' Meara were the employees who allegedly setup these LLC's on behalf of Jawa.

Once the short codes were issued... Jawa's masterminds changed the context of the "approved" site to one that was very vague (and considered by many) to be deceptive in practice.

They (Jawa) then employed a technique called "cloaking" that would display a picture perfect version of what Verizon "wanted to see" (compliant site), but this page was only displayed to Verizon employees & investigators/compliance auditors based on their IP Address.

The average person (you and I) saw the non-compliant page... where we dutifully submitted our information, and were subsequently charged $9.99 per month.

None of what I am writing is made up... it's all spelled out here in Verizon's lawsuit...
http://www.azcentral.com/ic/pdf/0324verizoncomplaint.pdf

March 24, 2011 | Unregistered CommenterTiffany J

Thanks for the terrific and gutsy job on reporting these very serious allegations. It is an emotional issue for all involved. Let's all remain factual and please keep in mind nothing is yet proven and everyone charged must be considered innocent for the time being.

A much larger story is coming, this is just the tip of the iceberg as other mobile carriers must likely follow suit. As well - watch for Interpol getting involved if the alleged scam involves international scope. Moreover, if deemed warranted, an aggressive prosecution joined by the Federal government may eventually invoke the Patriot Act and thus link the alleged crimes to a form of domestic terrorism that threatens the economy by undermining the secure means of performing daily commerce.

Incidentally, the charges were filed under Federal RICO statutes (Racketeering Influenced and Corrupt Organizations Act). It is extremely serious, allowing for criminal penalties, and is not just a civil case. If found guilty, it may include extended prison time in addition to paying back triple damages. RICO charges are not filed unless there is a very strong, provable case (meaning overwhelming evidence and witnesses). Typically, pressure on the lower level perpetrators leads to testimony by them against the leaders. Finally, given the wealth of the individuals charged, they may be deemed a flight risk and could have their freedom of movement restricted accordingly.

http://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act

March 24, 2011 | Unregistered CommenterLC

I don’t understand why so much focus seems to be on the MAN and not on the actual services he provides. This isn’t organized crime. The rumors are frustrating to me because there are so many nameless Text scamming companies out there – JAWA isn’t one of them. They have terms of service, prices clearly displayed, and 2-3 step processes for actually signing up for their websites… they send you monthly text notifications before billing you AND have round the clock customer support. As the business of mobile marketing has grown and regulations have been established, they’ve had to make countless updates to keep the cell phone companies, the aggregators, AND the search engines all simultaneously happy.

Jason Hope as a person is very charming. Very Scottsdale. He’s what you’d expect from any young millionaire entrepreneur. People have a problem with that. Hell, I know I do – but he’s not personally responsible for people not paying attention when they play around on the internet.

March 24, 2011 | Unregistered CommenterFact Checker

I love that not a single person commenting here (besides Fact Checker apparently. such an appropriate user name in opposition to the writers and commenters for this site) knows what the F they are even talking about. Everyone loves to jump on the band wagon and none of you even realize that you are all nothing but sheep being herded by Verizon so they can put an HONEST and LEGITIMATE company out of business so they can launch the EXACT SAME SERVICES themselves in order to rake in 100% of the profits instead of the 30% the take now.

JAWA offers a legitimate service offering people original and exclusive content not found anywhere else on the internet combined with the cutting edge technology allowing them to send this information directly to their cell phones at their will.

Do some customers not know they are getting charged? Possibly, I couldn’t tell you. Was the price of this service on every single page in an extremely visible font color and size? Absolutely. It is a standard marketing practice across every single business in the world to make you look where the business wants you to look. Why do you think name brand products are all at eye level in store isles but yet the cheaper off-brand products are all on the bottom? Why do you think the prices are also listed below the products so that the prices of the bottom shelf products can’t even be seen unless you bend over to look? It’s called marketing people! You get duped into buying things and paying more than you should for things every day of your life.

But hey, this guy has money and enjoys his life, so let’s go after him with torches and pitch forks! How dare he own an expensive sports car! You’re all a bunch of sheep and none of you even realize it. Wake up people! Everything you read is not true, hence the word ‘Allegation’.

So it looks like...

SomeoneWhoKnowsMoreThanYou
Fact Checker

are either employees of Mr. Hope, or Mr. Hope himself. Ha...lame.

March 24, 2011 | Unregistered CommenterBobby

hey SomeoneWhoKnowsMoreThanYou, you're either the biggest shill known to man or you're getting something for $9.99 that everyone else is getting nothing for... except billed for $9.99.

March 24, 2011 | Unregistered CommenterHarddrive

Oh FactChecker and SomeoneWhoKnows, obviously neither of you has ever met Jason Hope. Your posts make me giggle. Go down and meet him sometime, he knows exactly what he is doing.

March 24, 2011 | Unregistered Commenterazsun

@Bobby - so, when presented with a massive post of information proving that you're all ignorant asses your only response is assuming that I'm Jason Hope? I'm not, by the way. I notice though that you don't try to argue anything I said. Could that possibly be because unlike everything else on this site it is a cold hard fact? It's hard to find an argument for the truth isn't it?

@Harddrive - judging by your username and failure to actually read the comment you are responding to you must be a technical support representative. Did you come up with that response all by yourself or did your boss give you the scriptnto auto reply with?

@azsun - I do actually know Jason Hope, quite well in fact. I'm not making any claims as to him being a saint, or anything close to it. What I am standing up and talking about is the blatant and 100% false smear campaign going on right now against JAWA.

Now, to reiterate for the stupid people in the class who don't understand things unless they are repeated, I'll go over this again. What JAWA provides is exclusive content in combination with EXCLUSIVE features allowing the user to either text the content right to their mobile phone or even utilize interactive text messaging features to get info on the go, such as testing your zip code to the short code to get the weather, local news, etc.

If you don't find this to be a service that you feel worthy of $9.99 a month, fine. No one is forcing or tricking you into signing up. Thanks to the utterly false video posted on this site a lot of you seem to be a bit confused as to how JAWA actually works. JAWA DOES NOT SPAM PEOPLE NOR HAS IT EVER. You visit a web site which presents the offer clearly as well as the price, which is required to meet a specific color difference and be 16px font size. Then, if you enter your cell phone number you receive a text, guaranteeing that it is the owner of the cell phone signing up, unless their phone has been stolen, which can't be considered JAWA's fault. The text message again tells them the price as well as help and cancel instructions before they have even signed up. There is a pin at the bottom of the text message that the user must then enter on the web page to verify who they are. Then the user is redirected to the content site where they can access all of the features mentioned before.

Man that sounds like such an evil scam right there! Oh, and by the way, the short code shown on the cell phone bill in the video, 75075, doesn't even belong to JAWA or any company affiliated with JAWA. But hey, it's in a YouTube video so it must be true right? Like I said, sheep.

@Hamid, thanks for the chance to post again

@Harddrive >>> http://jawa.com/media/ <<<
People who sign up for JAWA's services get access to their exclusive websites. JAWA also creates mobile apps and Facebook apps.

You should also check out their gallery
>>> http://jawa.com/gallery/ <<<
2010 Business Journal WINNER for Best Places To Work, Donates MILLIONS to good causes locally and internationally... the Science Museum remodel downtown... yeah, that was Jason Hope. Your kids can thank him later. The MAN is extravagant in his personal life but he's a smart businessman and is a leader in technology. Totally a forward thinker in terms of workplace happiness

>>> http://www.businessweek.com/magazine/content/10_36/b4193084949626.htm <<<
Have fun with all that.

@Fact Checker aka Haphazard Homemaker:

I couldn't agree more that Jason Hope is "Totally a forward thinker in terms of workplace happiness" and I love the fact that he has donated to wonderful causes. It's truly awesome that at least some great causes have benefited from the easy-money that has flowed into JAWA and Jason Hope. However, that doesn't excuse the methods in which the money was made.

At best, even with an opt-in variation of the text message scams, the vast majority of those charged do not know nor expect the charges. Many are 8-year old boys with first-time cell phones who look up "Game cheats", find "content" providers like Jawa and inadvertently subscribe to $9.99 per month subscriptions. I imagine many such kids have been grounded by their parents for doing something they didn't even understand.

The video describes only one variation on the scams. There are literally hundreds. Some do require opt in. Nearly all pray on unsuspecting people. That's the problem with them.

I know you're a good person. I will personally respond to anybody who tries to attack you, but you also need to stop attacking others. I'd still love to chat with you.

Thanks!

Hamid

March 24, 2011 | Registered CommenterHamid Shojaee

Thanks for offering your support. I'm not really sure if I attacked anyone in my responses did I?

I don't want to give my number away - you might scam me ;) Totally kidding!

And your offer to meet in person is tempting, but I really doubt that having a 2, 3, and 4 year old screaming while they tear through your workplace, or a 9 year old hogging the video games, would be great for productivity. I did look at the photos of your office on FB and thought that it looked very similar to JAWA a couple years ago. I'm sorry if your encounter with Jason Hope didn't go as you expected it to. He is who he is - you know people in the software/tech business aren't the most personable.

I really do appreciate that you're raising awareness about this issue, but I take serious offense to you dragging a good company through the mud... especially when they're ordered by their lawyers not to respond to you at the moment. People there are working really hard to not only resolve things legally, but to keep moral up for the 200+ that still go to work there every day. People get scared for their jobs and for their families when they start seeing internet rumors about their company you know?

Problem #1 - You still refer to what JAWA is doing as a scam. IT IS NOT A SCAM. The sheer fact that the elaborate opt-in procedure I have described exists should be proof enough of separating what JAWA does to Spammers. JAWA websites meet the requirements set forth by the Mobile Marketing Association, a 3rd party organization that oversees these types of transactions to make sure that people marketing to mobile subscribers are legitimate businesses.

Problem #2 - I'm so sick of people trying to claim JAWA is preying on children. First of all, if people are giving their 8 year olds cell phones and not monitoring that like a hawk, then i'm sorry but I can't really find any sympathy for that. The Terms of Service on the page state clearly that the user must be 18 years or older and be the actual account holder or have the account holders permission to accept these charges. You can't seriously tell me that if an 8 year old kid has an unmonitored cell phone, or even swipes their parents cell phone to log into some video game cheats site that JAWA should really be responsible for that right? Here's the funny thing though, JAWA knows that this kind of thing can happen which is why they are so lenient and willing to cancel and refund anyone who calls and feels they were wrongfully charged. How many scams do you know that do that? I'm pretty sure there are quite a few people wishing Bernie Madhoff had the same type of return policy. You can expect JAWA, or any online merchant for that matter to be able to know who the user is on the other end of the computer. A child could just as easily go grab their parent's credit card and enter the info online, but you wouldn't call amazon.com a scam.

Problem #3 - Your video takes about 1 minute to describe a spamming scam, and 5 minutes smearing Jason Hope and JAWA. While you may not say outright that JAWA is the one spamming you it is quite obvious that this is what you are implying. This is 100% NOT TRUE. JAWA has done absolutely nothing to you. JAWA does not even own the short code that charged you. Are there text message spamming scams out there? Sadly, yes. Unfortunately the power of Verizon's media influence has labeled JAWA as the poster child for such practices, but this is ABSOLUTELY FALSE. But hey, they needed a scape goat and they also needed to get rid of their biggest competition so that they can launch their own premium SMS services.

Check your email. Please respond. We will continue this conversation in person tomorrow. In the meantime, I would ask that you stop smearing the name of a company you really know nothing about and have shown an obvious willingness to be ignorant in learning more about. Just be prepared with a redaction post.

@FactChecker: I can understand the concerns that the employees have. But their concerns are not because of anything that I have done. After all, JAWA is being sued by Verizon and Texas AG, not me. I am sure that any customer who is happy with JAWA's services will not cancel their services because of anything that I have said or because of my video. In fact, if any happy customers see my posts, I'm sure they will eagerly defend JAWA's services. They might even share some wonderful cooking recipes they obtained with the rest of us.

@SomeoneWhoKnowsMoreThanYou: I responded to your email and look forward to meeting you.

March 24, 2011 | Registered CommenterHamid Shojaee

$10 says the SHADE Foundation is 100% bogus.

http://www.shadefoundation.org/major-donors.php

March 24, 2011 | Unregistered CommenterBobby
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