Sunday, March 23, 2014

Scrutiny suspends websites' dealings (Extortion)

ExtortionOriginal Article

03/22/2014

By Robert Anglen

A shadowy network of Arizona-based Internet companies that used public records to demand money from sex offenders and harass those who complained has imploded amid lawsuits, court hearings and new standards enacted by banks, social media and technology companies.

The websites, including Offendex.com, SORArchives.com and Sexoffenderrecord.com, in November stopped seeking payments from people in exchange for removing profiles, blaming the change on "many conflicts, threats, unreasonable requests and false accusations about this website."

The move followed decisions by MasterCard, Visa, Discover and PayPal to stop processing transactions from what many describe as extortion websites. Google also changed its formula to prevent sites from using search-engine algorithms to increase viewership and monetize on public records such as police mugshots.

A Call 12 for Action investigation, published in May, found that the Arizona-based sex-offender sites mined data compiled by law-enforcement agencies across the country and used it to collect money. Operators of the sites did not always take down profiles after payments were made and launched online harassment campaigns against those who balked at financial demands or filed complaints.

The investigation found the websites listed individuals as sex offenders who no longer were required to register or whose names had been removed from sex-offender databases. The sites also included names and personal information of people who had never been arrested or convicted of a sex crime.

In an interview with Call 12 for Action last month, website operator Brent Oesterblad accused owner Charles "Chuck" Rodrick of taking elaborate steps to conceal his ownership of the websites and misleading state and federal judges about it. Oesterblad's comments were backed by court testimony and banking records.

"I have personal knowledge that Rodrick has misrepresented the facts of his ownership of the sex-offender websites to his former wife, to the Maricopa County Superior Court and to U.S. District Courts in California and Arizona," Oesterblad said in a affidavit filed last month in federal court.

Rodrick, 52, of Cave Creek, has refused interviews for more than a year and would not speak about the websites after a Feb. 19 court hearing in Maricopa County Superior Court.

Rodrick and Oesterblad, both of whom were convicted on fraud-related charges in the early 1990s, are at the center of several state and two federal lawsuits. Sex offenders and others named on the websites have accused them of running an extortion racket. Rodrick and Oesterblad are also accused of posting inaccurate or old information and using the threat of exposure as leverage in their operation.

Rodrick responded to allegations by filing defamation lawsuits against some of his detractors, including his ex-wife and her boyfriend, both of whom were profiled on the sex-offender websites even though neither has a criminal record. Rodrick has also sued their lawyers.

In court filings, Rodrick repeatedly has denied owning the websites. In a federal declaration last year, he said he lacked "ownership interest in any of the companies that own the websites" and does "not have control over the websites as an owner."

Oesterblad told Call 12 for Action he helped disguise Rodrick's ownership interest by opening bank accounts and filing corporation papers for him. He said Rodrick further hid his role by registering website domain names in foreign countries and running them through proxy servers. His claims are backed by court records and testimony.

Oesterblad, who defended his work managing the sex-offender sites, said they did not start out as a way to demand money from offenders.

"It wasn't supposed to be a 'take-down' service. It started purely as an alert service," he said in the interview, adding that when the sites failed to make money "(Rodrick) made a command decision ... to do something to generate revenue."

Financial records lay out connection to websites, forensic computer specialist says financial records, including checks, credit-card receipts, tax documents and bank-account data, presented in court last month provided a picture of Rodrick's involvement in the websites.

"Whoever is receiving money would have control over the websites," according to Phoenix forensic computer specialist Juan Lorenzana, who testified against Rodrick in Superior Court in February. "Revenue is flowing to him through the websites."

Lorenzana, president of JEL Enterprises Inc., testified it was impossible to track the websites themselves to Rodrick. But money going from the sex-offender websites painted a road map that led directly to Rodrick, Lorenzana testified.

Among the financial transactions detailed in court were tens of thousands of dollars to Rodrick's girlfriend, Traci Heisig.

Heisig, who is a court reporter and owns Desert Hills Reporting in Phoenix, is a joint plaintiff in the defamation suit against Rodrick's ex-wife, her boyfriend and a sex offender in Washington.

Financial records presented in court showed $80,000 from the websites went to help Heisig buy a condominium in Rocky Point, Mexico, and $13,000 to buy her jewelry. The account was also used to make multiple payments of about $5,000 for Heisig's office lease on Camelback Road and for a $5,000 personal check, records showed.

Heisig did not respond to an interview request made through her lawyer.

Lorenzana said in court the sex-offender websites generated revenue through two sources: removal fees and ad revenue generated by the sites. Money to Rodrick could be tracked through ClickBank information provided on the websites, Lorenzana said.

ClickBank is a mechanism that generates revenue for websites based on traffic and product promotion. Lorenzana said money from the websites went to bank accounts used by an affiliated company called Civic Sentry, which does business as Web Express Ventures.

According to corporation documents, Oesterblad is the sole manager of Civic Sentry.

Rodrick, who doesn't have a lawyer, repeatedly suggested in court he wasn't the owner of the sites because his name is not on corporation filings. But Lorenzana maintained Rodrick's singular control of the money proved his control and ownership of the websites.

Maricopa County Superior Court judge sets deadline to remove all posts about defendants

Rodrick has been aided in document preparation for his legal fight by a felon who works at a polygraph school, claims to have a background in paralegal work and lists J.D. after her name in a school catalog, implying she has a law degree.

Court records show Kelley Bradbury served eight years in a Colorado prison for theft beginning in 1997.

In her resume for the Polygraph School of Science in Phoenix, Bradbury lists among her credentials a degree in paralegal studies from Rio Salado College. In the current school catalog, she lists her name as "Kelley Bradbury, M.S., J.D."

The State Bar of Arizona has no listing for Bradbury, meaning she is not licensed to practice law in the state. Rio Salado College officials also say records show Bradbury took paralegal classes but never earned a degree.

Officials say she obtained a "certificate of completion in airline operations."

Bradbury did not return multiple calls seeking comment about her background.

E-mails and computer records show Bradbury has assisted Rodrick with court motions. On a Web page, a person named Kelley Bradbury posted comments about one of the people involved in the federal suit against Rodrick and defended the sex-offender websites.

"I feel much safer knowing that sites like www.offendex.com are out there!" a person identified as Bradbury wrote. "If you didn't want your information made public you should not have committed a sex crime!!"

The post could become problematic for Rodrick. The February court hearings involved a request for sanctions against him for posts on websites about defendants in the defamation cases.

In an e-mail this month, a plaintiff in the federal-racketeering case whom Rodrick sued for defamation wrote an e-mail telling Rodrick to remove the content.

"I would request that your ... document preparer remove the slime she has up about me," _____ of Washington wrote. "She's a part of this case. If she does not remove this I will be informing the court."

While cross-examining witnesses during the hearing, Rodrick repeatedly asserted no evidence existed to show he posted the information to the sites.

But later in the hearing, Rodrick tried to broker a deal, offering to take down the offensive posts.

Superior Court Judge Katherine Cooper responded by imposing a deadline for Rodrick to remove all posts about the defendants or face arrest.

On. Feb. 24, Cooper issued a civil arrest warrant for Rodrick, which she later rescinded.

No law-enforcement action taken against operators of sex-offender websites.

Call 12 for Action last year found that not all of the people listed on the sex-offender websites are registered sex offenders. Some have no criminal records. Yet their names, addresses and other personal information were put on the sex-offender websites for anyone with an Internet connection to view.

Those who challenged Rodrick and Oesterblad said the interactions frequently turned ugly, with intimidating calls, vitriolic e-mails and threats of lawsuits. Pictures of offenders' family members were posted on the websites along with their addresses. In another case, an offender's Facebook friends were added to the sites.

"Since you like Facebook so much ... we have added your 65 friends to your page on Offendex," an e-mail from website operators stated.

In other cases, the websites profiled offenders whose names had been removed from state sex-offender registries.

State police and departments of correction generally are responsible for maintaining official sex-offender registries, which can include an offender's name, photograph, physical characteristics, addresses and description of the crime.

Sex offenders are sometimes removed from state registries because their crimes have been reclassified and no longer are considered serious enough to require registration. Some offenders are required to register only with law enforcement, and their names would not appear on public registries.

Others have done their time and have sought court orders to remove their names from state and national registries.

The websites advertised records for 750,000 sex offenders. The sites promised to protect families from the menace of sex offenders in their neighborhoods by providing access to present and past criminal records.

Complaints about the websites have been made with attorneys general in at least five states, including Arizona. Complaints also have been submitted to the FBI, the Federal Trade Commission and the Internet Crime Complaint Center, which works with the FBI to refer Internet criminal cases to various agencies.

As of this month, no law-enforcement agency has taken action against Rodrick and Oesterblad over the websites, records show.

Rodrick, 52, and Oesterblad, 53, both have felony convictions on fraud-related charges.

Rodrick pleaded guilty in 1993 to selling illegal cable-television descramblers with fraudulent intent. In 1996, he was sued in U.S. Bankruptcy Court for his role in an Alaskan Ponzi scheme that cost investors as much as $50 million. A final judgment of $58,900 was entered against him. Court records do not show any payments were made.

Oesterblad pleaded guilty in 1992 for his part in a frequent-flier scam operated out of his family's Phoenix travel agency and spent 10 months in a federal prison.

Websites' employee said a dispute over money spurred him to testify in civil cases.

The sex-offender websites were built using data copied directly from official law-enforcement websites, Call 12 found.

Eric Souhrada, a former Tempe software developer and computer engineer now living in California, said in an interview last year that he designed the sex-offender websites for Rodrick as subscription services, not as vehicles to target offenders for cash.

Souhrada said he designed the sex-offender sites from data he scraped from official registries maintained by law-enforcement agencies across the country. He said he reformatted the data into his own templates that Rodrick used for websites such as Offendex.

Oesterblad said the origin of the sex-offender sites goes back to 1999 when he and Rodrick owned an Internet-based subscription service to access public records called Spyheadquarters.com. The name was later changed to Onlinedetective.com.

In 2006, the demand for subscriptions to search public records plummeted. Oesterblad said he and Rodrick didn't have another company together until 2011, when Rodrick approached him about a new website called Offendex.com to collect money from sex offenders.

Oesterblad said Rodrick was in the middle of a divorce case and asked him to register the new company with the Arizona Corporation Commission and open bank accounts.

"I did not know then, but believe now, that Rodrick established the name Web Express Ventures in order to hide income and other assets from his estranged wife," Oesterblad wrote in his federal court declaration.

At its peak, the sex-offender websites were bringing in an estimated $35,000 per month, Oesterblad said during last month's interview.

Oesterblad described his role in the website as a contract employee. He said Rodrick paid him 50 percent commission on money he collected from sex offenders through the removal process. He also said his job was to communicate with offenders.

"I'm the one who had to talk to the angry perps on the phone," Oesterblad said, adding that he has no regrets about firing off angry e-mails to offenders and rubbing their faces in the graphic details of their crimes. "I was the zealot."

By the end of 2012, Offendex was getting a lot of negative attention on the Internet and elsewhere. Days after Call 12 for Action sought interviews with Rodrick in December, he changed the name of the site to SORArchives.

Oesterblad said the real blow for the company came after complaints from around the country about similar websites led credit-card and payment-processing companies to reject payments on behalf of the websites. Google also changed its formulas so the sites were buried on the Web.

"Rodrick subsequently learned that he and the SORArchives.com website was under investigation for possible criminal activities," Oesterblad said in his declaration.

Oesterblad said that Rodrick told him he learned Maricopa County Attorney Bill Montgomery's office had opened a criminal investigation into the websites.

No criminal charges have been filed.

Oesterblad said he decided to testify in the civil cases after he and Rodrick had a dispute over $808. Oesterblad said Rodrick refused to pay him for work he did on the websites and then pushed him out of a future project.

He said he felt betrayed and as if he had wasted two years of his life.

"I agreed to talk to everybody. I agreed to tell the truth," Oesterblad said in the interview. "I can acknowledge my naivete and stupidity for being a patsy."

In fall 2012, Call 12 for Action received a complaint call from a consumer alleging that a Valley-based company was engaged in online extortion. Reporter Robert Anglen set out to investigate those claims and found that sex-offender websites were demanding money to remove profiles from the Web. To trace the operators of those websites, Anglen combed through hundreds of pages of court records, business filings and property records.


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