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NZ-based Private Investigative Author & Blogger (Ret.)

8. BBX – The First Criminal Charges

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Following my recent release of the results of my investigation into the International Barter business BBX, I announce here a major change in my direction. I have now moved from an investigative position into the role of an advocate. It is now my intention to [single-handedly again] terminate all BBX operations globally run by the current owners/managers and to achieve this objective as soon as possible. In this post I give my reasons for doing so and share the basics of what I believe is the first private Prosecution against the current Director (and past Director) of BBX’s New Zealand operation for a crime – Criminal Negligence as managers of a barter exchange. More charges from around the globe are inevitable. Bartercard Directors as well as the entire barter industry should take careful note of the demise of BBX and how it came about. The law exists for a reason – one of them is to protect the ‘little’ people. No one is above it. I explain here now how I am using it in conjunction with the truth revealed from my investigation.

BBX Directors, Carolin McDonald & Magali Russo will be facing my Private Prosecution in Auckland District Court

[ORIGINALLY POSTED in February 2017 at http://www.dennis.co.nz/2017/02/8-bbx-the-first-criminal-charges/index.html]

Preamble

There is a difference between simply making a mistake and knowingly operating a business outside of the law. Judges look at this aspect of knowing about any crime when ajudicating and particularly when sentencing. Ignorance of the law is no defence but it is a mitigating factor in sentencing. Knowingly committing a crime is more serious of course.

There is also a huge difference between knowing that a business you run or own is operating outside of the law to deliberately operating outside of the law for your personal pecuniary gain at the expense of others. That makes an offence more serious legally.

There is also a huge jump from gaining at others’ expense from those you don’t know and undermining the income streams due to those who have helped you in the past or who are trying to help you. That’s why theft as a servant is more serious a crime than plain theft.

Why BBX?

My investigations, and more importantly information that come to the surface since release of my analysis, have brought me to the very strong conclusion that BBX under the current leadership has crossed all of these lines. Management of BBX since the founder’s death has conducted multiple crimes and I am angry, not only because the little people are getting conned and will end up paying in the end. I’m angry because if the founder of BBX was around and knew what was happening on his passing, he too would be livid. Sure, he wan’t a saint, but from my investigations the conduct of the BBX management has overstepped all lines of decency and I have determined to stop them.

This is an individual thing where I personally made a judgement call as more information has come in from the Tipline after I’ve posted the results of my investigation into BBX; enough is enough. Things have gone too far and have to stop. I will do everything in my power to cease the corruption, lies, greed and frauds within the BBX operation as of today, which I now announce to all.

I will, over the coming weeks explain and share a lot more of the facts as I find them, plus I will be initiating criminal private prosecutions in New Zealand to bring the people who I believe are crooks to account. I will also assist any person in any other country to do the same. You can’t flout the law; steal and lie to people I know are getting conned on an ongoing daily basis and then attempt to deceive me without consequences.

To the Touma family who own and run BBX, this is a declaration of war. Your words and conduct vs. the results of my investigations starting in the NZ courtrooms with one simple criminal case.

A Private Prosecution

So, the first case will be a Private Prosecution that I will be taking, hopefully next week, under the New Zealand Law in which it is a crime to knowingly direct a business in a reckless manner. I would note that this is only one of the many charges that I could bring against the goons who have been running BBX. My point is not to be judge and jury for the entire world, nor even the barter industry, nor even the BBX family . . . it is simply that crimes have been committed; I can do something about it (even if no one else will) and I will not stand by while it continues. I want to set a precedent and make a point, not take over others’ responsibilities within enforcement and being a global police officer!

It is normal that when someone is accused of a crime they are viewed as innocent until proven guilty. I don’t play this game however because I am the complainant. I am the accuser. If I present the evidence in court and they are found innocent then they can sue me for defamation or whatever. If they can defend their case successful on legal grounds then they may sue me but would have to have the matters tried again in court . . . that’s their prerogative, but if they are found guilty then the world will know that the words I have spoken have been validated from the Judiciary in New Zealand.

This is the criminal justice system we are talking about here, not civil. It’s not just a matter of commercial disagreement, it is whether or not they have broken the law. Doing that is a crime, not a matter of getting a smart lawyer, a bunch and “having a go in court”.

When the criminals are charged they must stand before a judge and plead either guilty or not guilty. Depending on their plea they will be set down for sentence OR the matter will be set down for a trial, which takes time to arrange, prepare for and be conducted.

I have the time and determination to stop these ongoing crimes and it is clear to me that taking a Private Prosecution against the management of BBX in New Zealand is a clear demonstration to the world that there is fire under the BBX smoke and that (obviously] I must have enough evidence to be able to have them convicted in a New Zealand court.

There is a process for conducting Private Prosecutions in New Zealand. It is a well defined process. Basically:

  • I must believe that a crime has been committed. I do.
  • I must file the charge or charges in the appropriate Court. I will.
  • The Registrar must accept the charges for filing, in which case they become entered in the official court records and move into the Judicial system, or he can put them before a Judge who can then decide whether or not.
  • The charges must be served on the Defendant(s) and they must appear in court at a date appointed by the court registrar.
  • When the charges are ‘read’ they must plead (answer “Guilty” or “No Guilty”).

It is a relatively simple thing and vitally a important component in the NZ Judicial system as the Crown Law Office says in its guidelines:

3.4 Despite periodic calls for the abolition of the right currently vested in any person to lay an information, so-called private prosecutions remain as a part of our system of criminal justice. They are now recognised in s 6 Criminal Disclosure Act 2008 and are bound by its provisions.

There is a perception that approval is required from the Solicitor General before a Private Prosecution can be undertaken. This is not entirely correct:

3.5 The Solicitor-General has neither a role nor authority in relation to private prosecutions, unless the power to stay a prosecution or to take over a trial on indictment is exercised . . .

It’s up to the Court Registrar and/or Judge to approve specific charges and to allow them to be registered with the courts. If I can show a reasonable case to the Registrar that the crime I detail has been committed, it is most likely certain that the Director(s) of the BBX New Zealand company will be required to stand in court and face the charge. This BTW has NOTHING to do with BBX’s lawyers or BBX. I can and will do this first stage totally without their knowledge, input or say, so they cannot get in there with smart lawyers and play games to obfuscate.

They can if it was a civil claim. With criminal, no; this is simply me presenting a charge (technically called an ‘Information’) and showing the Registrar that I believe it; I have sufficient evidence that ‘at first blush’ it should be looked at and then it is before a judge. Prior to the pleading stage, the quality of the evidence is not tested.

I do not have to prove anything at that stage; I simply have to lay the charge (that must be crystal clear) and have enough evidence that the Registrar (and/or Judge) can say, OK there seems to be something here. If there’s not enough information in the Information I can go away and do it all again until it is sufficient that the Registrar and/or Judge agrees that there is enough to proceed.

There is also no limit to the number of Informations (charges) that can be laid. I have chosen to simply select one simple easy-to-prove matter. Others can do the rest if they want to later.

My Motives

Understanding me and my motives is essential. I have a large and growing body of not only evidence, but informants who are willing to stand and testify against the BBX management. People who have helped cover things up . . . people who knew about (and in some cases participated in) crimes and skulduggery . . . Lots of people are now starting to worry that they and their activities will come under the spotlight of my and/or others’ attention.

The demise of BBX is a certainty as those who have kept silent (for whatever reason) will now start to ‘spill the beans’. It’s always the way, and when it gets to a tipping point where people in the middle can see that the game is up, they will turn, a few at a time, then when it goes down, it will be fast and brutal. Mostly people will try to protect their own butts!

My intent in bringing the first Private Prosecution against BBX (that I know of) is:

  1. to show to the world that there IS someone who can hold these people to account;
  2. to show to the world, particularly those who have been deceived) that the matters are incredibly serious – there are real crimes in the BBX operations; and of course finally
  3. to bring criminals to justice.

They have refused to engage with me constructively or use their right of reply to my blogging. This is telling. They can have their day in court and defend however they like but it will have to be before a judge in New Zealand who will simply look at the evidence, determine what happened, and then determine whether or not the Defendant(s) have broken the law.

Note that the New Zealand legal system is adversorial (like the USA & UK), not inquisitorial (like France) so that the Judge will only assess their conduct against my Information. They may have broken 99 other laws and everyone including the judge can all know this but if I cannot prove to the satisfaction of the judge that they broke the one I specify on the one Information I provide as [private] prosecutor then they will walk free. It doesn’t stop me, the NZ Police or anyone else in the world from laying charges on the other 99 crimes but the court will only hear evidence for and against the crime listed on my Information charge-sheet

The Case

I have chosen one matter alone to charge that relates to their criminal negligence – mis-management. I spent more than an hour with a lawyer yesterday and this was one of the matters I dealt with. I want to get it absolutely perfect and into its final format before I publish it so I will post the details of the actual charge sheet here in due course when it is finalised.

Essentially BBX has operated non-compliant software around the globe. It is their creation; they designed it using their own in-house programmers and it is totally illegal in what it does. The technical aspects I highlighted in my report following investigation that it is non-PCI compliant, meaning that the way it works breaches the industry standards legislated by the industry. PCI compliance is a vital issue in the financial sectors. You cannot for example store credit card numbers on your systems – period. These are now held only by banks and they encrypt things for your safety as well as any middle-men in a transaction. They use what are called ‘tokens’ a technical thing that permits transactions to occur without the actual credit card information being exposed unduly. BBX systems break the first rules of the financial business – their systems are simply not PCI compliant. I can prove this with evidence already in hand and I will do so in court too, should they plead not guilty and it proceeds to a criminal trial.

The reason that this tips into the criminal negligence – mis-management is that the penalty for a barter system from the banks is huge – terminal for a business like BBX in fact – and this is a totally unreasonable risk to have the potential for instant loss to the members. Termination of the capacity to trade within the banking system, and in serious cases like what BBX has done and still does to this day, has a very serious trickle-down affect – when word gets out that there has been a security breach, the downwards cycle is inevitable.

The banks will require that BBX notify every person whose personal data may have been compromised of the event and what they are doing about it; trust takes a huge hit, customers will demand that their personal information is removed (quite rightly), many will pull out of the BBX system at that stage no matter what and will never come back, banks won’t trust them [usually ever]; they get that huge black mark against their name in the finacial industry (which will stay forever BTW) and then there is a ripple effect throughout the industry – Mastercard, VISA, Diners, Paypal and all the others will all get wind of it really quickly and they will all suspend anything to do with BBX for who-knows how long.

In an industry that survives largely on trust and brand credibility, this is most certainly a terminal event – bye, bye BBX.

The criminal side is not so much that they have done crimes in their business conduct (they have done that too BTW, and more will be coming out on this in due course) but the fact that they have known about this and didn’t do anything about it is the key point of the charge. The longer that they have known and the more that they had been warned the worse it is for them.

It’s bad!

If it can be shown that the company has a non-PCI compliant system (I have the evidence and it’s very simple to show); and if the consequences of failing to comply is (or would be) likely to be terminal for a barter trade exchange such as BBX (I am doing this here and I can do the same in court) and if it can be proven that the Director(s) knew about this and did nothing (I CAN prove this in court as I already have the evidence!) and if I can prove that they were warned repeatedly about this non-compliance (and I can) and if I can show that this extends back for a long time (nobody knows outside of my investigation [that I know of] but I can assure you it is a VERY long time!) then you have a very strong case of criminal negligence mis-management of BBX – a crime under whatever section of whatever Act the case is finally submitted.

Personal Liability Upon Conviction

But it gets worse than that for these BBX goons, because if a Director of a New Zealand company is found or pleads guilty to the crime I am charging them with, then this exposes them PERSONALLY to any or all claims from those that they represented during the time of the offences – years.

In BBX’s case this is not only the Shareholders of the BBX franchise company (themselves, so it is moot, unless the sisters end up fighting each other) but also the NZ Franchise holder (even though he may not be active any more) AND arguably anyone adversely affected by their negligence. Anyone, including the BBX members. This means that if the BBX trading system goes down as a result of their mis-management, and if a court of law has proven criminal negligence by the Directors then EVERY BBX member who has lost anything and can prove that in court, can sue the criminal directors for that loss – yes, personally!

Let’s take this scenario into a hypothetical but realistic example . . . a plumber in Wellington joined BBX and traded. His balance is $5,000.00 in credit and he can’t spend. The exchange goes down. He gets all down in the dumps and rues the day that he signed up and feels that he’s got conned. He reads in the newspaper that XXX has been found guilty of criminal negligence in management of the BBX operations. He gets curious . . . Googles BBX fraud or BBX con, or BBX ripoff, or BBX scam, BBX whatever and stumbles upon this blog post.

He goes down to his local District Court, lays a claim against the [now proved] criminal director(s) of BBX for his missing $5k in the Small Claims court – it might cost him $50.00 – and he’s just got himself a judgement (if the adjudicator agrees) for his $5k claim on the ‘criminal’ director personally. The reason is because in a higher court (the criminal court) they have already been found to have committed a crime, thus they MUST then be responsible personally for his loss.

Now when word gets out that for $50.00 he got a personal judgment on the Directors, guess what the rest of the upset members will do?

Bye bye any assets hidden in the Directors’ names. It is a very, VERY serious situation that faces these people, and it is all of their own making.

I cannot see the Directors of the New Zealand BBX operations escaping serious consequences personally for their management of BBX. In my opinion this is NOT just a matter of “Oops! Sorry we overlooked that one and we’ll fix it up when we get a chance. Please Officer, can we go home now?  . . . ” Oh, no, no, no. It is a matter where the chickens must surely come home to roost, big-time.

This though is all simply the tip of the iceberg. There is HEAPS more to come out. My assessment is that it would or will take a private investigator and/or the authorities six months to a year to unravel it all with cooperation, and more than a year to do it with obfuscation from the perpetrators. My current assessment that this one charge that I am bringing may be as little as 1% of what has actually gone down under the auspices of the “Touma & BBX families” going back years but particularly after the founder Michael Touma died.

Others from around the world can make complaints to the Police as much or as little as they like and take further actions as much as they want. I’m not a practicing lawyer so I can’t act professionally for anyone, but I can help anyone who does want to see justice occur to conduct more criminal cases where they have evidence and the will to act. At this stage I can see many crimes (counts) and the extent of them surely indicate prison sentences to me.

What the judges issue by way of punishment I simply don’t care. I trust them to be fair. They are the professionals and I’m not a judge in a legal sense.I just want to see the truth come out; for these people to be held to account AND BBX to cease trading, sooner rather than later, then I can get on with dealing the other big Australian con job in the same industry.

To those involved with BBX who may still be in shock or denial, I recommend that you watch this space because in my next post I will be sharing what these BBX lot have done post Cameron McKean’s resignation in Thailand. You won’t know whether to laugh or cry as I give my commentary of a mixture of clowns and lunatics huffing and puffing in an area that they really sincerely have not a clue – Thailand. Except for the fact that I’m a professional writer not short of a word even when it’s all been said before, I would be left gobsmacked and speechless. You will be too. Tune in again here for the next posts in this incredible BBX Investigation.

Next up . . . the significance of a criminal organisation and the challenges for other operators caught up in the BBX madness.

The BBX Investigation Series

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