FW lawyers and other professionals - Petition to assist FW members suffering from retailer lawsuit

MaxRC said:   EndlessKnight said:   
Nothing about their "scheme" was illegal, they neither lied nor misrepresented any fact. Let just stop will all these analogies and just ask ourseleves one question: How can one commit fraud if they never lied nor misrepresented any facts?They placed orders never intending to actually receive or pay for them. They exploited a defect in the order processing at Nordstrom to ensure that the orders wouldn't be shipped or charged.

There is nothing illegal about placing orders one would never intend to receive.

dhl said:   dshibb said:   MaxRC said:   EndlessKnight said:   
Nothing about their "scheme" was illegal, they neither lied nor misrepresented any fact. Let just stop will all these analogies and just ask ourseleves one question: How can one commit fraud if they never lied nor misrepresented any facts?They placed orders never intending to actually receive or pay for them. They exploited a defect in the order processing at Nordstrom to ensure that the orders wouldn't be shipped or charged.

There is nothing illegal about placing orders one would never intend to receive.

It makes you an ahole, but not illegal.

True!

But I also think a lot of the 'tricks' FWers employ make them a little bit ahole as well.

Between berating cashiers and CSRs and landsliding some new start up to screw them over on credit card processing I don't think we've made many friends doing these things.

Maybe I missed something but I thought that the Bros hadn't actually received a large portion of their CB, so I don't see how they could have evaded taxes on it already. Unless we are talking about a smaller sum that they received already...?

dshibb said:   MaxRC said:   EndlessKnight said:   
Nothing about their "scheme" was illegal, they neither lied nor misrepresented any fact. Let just stop will all these analogies and just ask ourseleves one question: How can one commit fraud if they never lied nor misrepresented any facts?They placed orders never intending to actually receive or pay for them. They exploited a defect in the order processing at Nordstrom to ensure that the orders wouldn't be shipped or charged.

There is nothing illegal about placing orders one would never intend to receive.EndlessKnight stated "they neither lied nor misrepresented any fact". My post shows to the contrary. Also, these guys clicked through a FW referral link, essentially representing that they intend to make a purchase that satisfied the terms of the program by making a qualifying purchase at Nordstrom. They clearly knew this to be false.

Also, context of an action is important. It's not illegal to place orders one does not intend to receive, but doing so as an effort to defraud someone is another matter. Don't pretend to be ignorant about this.

MaxRC said:   dshibb said:   MaxRC said:   EndlessKnight said:   
Nothing about their "scheme" was illegal, they neither lied nor misrepresented any fact. Let just stop will all these analogies and just ask ourseleves one question: How can one commit fraud if they never lied nor misrepresented any facts?They placed orders never intending to actually receive or pay for them. They exploited a defect in the order processing at Nordstrom to ensure that the orders wouldn't be shipped or charged.

There is nothing illegal about placing orders one would never intend to receive.EndlessKnight stated "they neither lied nor misrepresented any fact". My post shows to the contrary. Also, these guys clicked through a FW referral link, essentially representing that they intend to make a purchase that satisfied the terms of the program by making a qualifying purchase at Nordstrom. They clearly knew this to be false.

Also, context of an action is important. It's not illegal to place orders one does not intend to receive, but doing so as an effort to defraud someone is another matter. Don't pretend to be ignorant about this.

But when you say they "exploited a defect...to ensure that the orders wouldn't be shipped", it's not exactly accurate. Nordstrom's made a conscious decision to disallow these orders from going through (the conscious decision I am referring to is the one in 2008). In fact, the ordering part of the process worked exactly as Nordstrom wanted it to work. The defect was in the payment of the cash-back, not the automatic order cancellation.

dhl said:   dshibb said:   MaxRC said:   EndlessKnight said:   
Nothing about their "scheme" was illegal, they neither lied nor misrepresented any fact. Let just stop will all these analogies and just ask ourseleves one question: How can one commit fraud if they never lied nor misrepresented any facts?They placed orders never intending to actually receive or pay for them. They exploited a defect in the order processing at Nordstrom to ensure that the orders wouldn't be shipped or charged.

There is nothing illegal about placing orders one would never intend to receive.

It makes you an ahole, but not illegal.
The point is that I think we'd all be LOL'ing at these guys if nordstorm had played fair and had taken them to civil court (and we'd then also be LOL'ing at Nordstrom when the chiu brothers found a way to move the money to protect it from Nordstrom and Nordstrom was left with a judgment against two guys that declared bankruptcy and moved to puerto rico with their 600K), but the fact that Nordstrom realized that would happen and decided to force a criminal action here is the problem.

dshibb said:   

Jorge its obvious that the analogies provided in the list are extremely different. You can argue all you want that its my opinion that a semi and a ball are different things, but that only just reflects poorly on you.

Actually most of the lawyers on here are saying that the criminal element is a bit of stretch(with some saying that it doesn't fit and some saying that it barely fits) and that the civil case would be a slam dunk. None of those attorneys are claiming that is pure theft equal to the same as robbing someone(like cracking open the bank vault) as you have claimed on here. You are the most out there person on this thread. And actually there is nothing intellectual about anything you have posted on this thread. Its just the same statement regurgitated over and over without any analysis or detail. So excuse me while I laugh at your attempt to deflect.

I still saw that as a joke and maybe I was just influenced by the fact that the rest of the thread is one joke after another.

As far as the analogies I agree some are ridiculous, but some are probably relevant, the point is it is not for you or me to decided which is which and then dictate that to the world. DavidScubadiver, NSDP, and Crazytree all seem to have legal experience and have all suggested that criminal element is at least plausible if not outright justified. You can add the Chius attorney as another lawyer who clearly felt the criminal element was justified, and he has far far more access to the case details than any of us do. I have never claimed in any of my posts what you say I did regarding equal to robbing someone, I welcome for you to reread them. I am one of the few people being consistent in saying that those that do this type of behavior on a smaller scale are also guilty of fraud, although unlikely to be prosecuted. That is not a popular opinion as most of the people on this board have apparently done similar things. I am arguing what I feel knowledgeable enough to argue, which is mainly that they did indeed lie/misrepresent facts when they placed these orders. Most of the rest of the points being brought up in this thread are things that the only people that should be arguing are those that have a pretty good knowledge of the law. I admit I don't have that knowledge and have thus stayed out of them (for instance before David explained it I didn't know how the lack/presence of a contract plays in to civil versus criminal and if websites terms of service count as contracts in this sense). Honestly, you need to look hard at yourself, I am not the one trying to deflect, you are the one calling people ignorant, non intellectual, exc. because they disagree with your opinion or failed to provide what you feel is a proper anaolgy. I always try hard to understand the opposite side of an argument, even when I disagree with it, and except in some very rare cases am usually still able to respect people that have a differing viewpoint. Why does that appear to be so hard for you?

I rescind my comment regarding the cadbury egg thread, we clearly read that thread in two different ways.

dshibb said:   

I am not dictating anything. Just pointing out that the listed analogies are embarrassing to those that would offer them up.

All 3 of those posters aren't saying that this case is 100% cut and dry either.

I'm not calling people ignorant for disagreeing with my analysis. I'm calling them ignorant for dropping clearly dumb analogies that aren't applicable.

Sorry, but constantly posting that these guys are criminal because they ended up with money that wasn't theirs doesn't really give off the impression that your trying to understand the opposite side of the argument. And your lack of desire to even take each element of this case point by point doesn't either.

Generally speaking I think in situations like this I think its worthwhile to start by cancelling out the really ignorant things different sides are saying to leave the more poignant remarks left. By creating a list of bad analogies doesn't mean that I'm not showing a lack of respect for those that make a worthy argument as to the criminality of this case.

Again you are claiming I have said things I never did. Furthermore just because I am not actively arguing on elements of the case doesn't mean I am not considering them. It just means I know when I am out of my league.

SUCKISSTAPLES said:   mikef07 said:   


They arrest you today and seize your assets for the exact same thing are you pleading guilty? HELL NO is my guess.
If I was arrested today , had all my assets seized , faced a 30 yr sentence Plus a tax evasion charge if i beat this charge , and the govt offers me a deal for 24-30 months to settle up on all possible claims, id seriously consider taking it.

AND then I'd wish my brethren at FW or elsewhere would rally in my support and try to uncover what really happened, and why I was thrown under the bus by fw and Nordstroms . Remember it takes only one whistle blower with a conscience to read this and come forward with knowledge of facts that show this did not really happen quite the way the complaints allege

If I was arrested today with those charges. I thank them thousand times for their generous plea terms.
Grand theft, wire fraud, tax evasion, etc...you simply can't walk away with 24-30months. Chiu's got a HOTDEAL in the end indeed.

jetsfan92588 said:   nsdp said:   Yes the plea agreement which must be in writing spells out all the charges for the episode in question. If it is not included it is waived by the government. Had a woman who ran a safe house for illegal immigrants and plead to that . AUSA had to explain to the Judge that the government was waiving money laundering and tax charges as those were omitted to conceal the level of cooperation with ICE. She could have been subject to retaliation if everything was in the indictment(public document) and sentencing report.

If they committed tax evasion and that was the reason they plead guilty to fraud, would there be any reference to tax evasion or CID in any public document? In other words, is there any way for us to know whether or not they may have been charged with tax evasion?

I am sure it is in the sentencing report which is sealed and not available to any one other than the US Attorney, defense counsel(and can be shown to the defendant) the judge and the district clerk. If appealed, a sealed copy goes to the clerk of the court of appeals for special handling.

nsdp said:   dshibb said:   MaxRC said:   EndlessKnight said:   
Nothing about their "scheme" was illegal, they neither lied nor misrepresented any fact. Let just stop will all these analogies and just ask ourseleves one question: How can one commit fraud if they never lied nor misrepresented any facts?They placed orders never intending to actually receive or pay for them. They exploited a defect in the order processing at Nordstrom to ensure that the orders wouldn't be shipped or charged.

There is nothing illegal about placing orders one would never intend to receive.

I think that we have a group of selective thinkers here.

In 5 out of twelve Circuit Courts of Appeals that have ruled on this type of transaction using the internet and a computer, the case is a slam dunk on wire fraud. The only difficulty is getting a jury to completely understand the jury instructions. In the 9th Circuit which covers California, where the defendants are, and Washington, where Nordstroms HQ is, the Nosal case makes prosecution difficult. In all twelve Circuits the tax evasion case is a slam dunk.

The case could also be brought in Wisconsin where FW is. The 7th circuit has not yet ruled precisely on this point. But my guess is that the Chicago court would follow Philadelphia and New Orleans and uphold the conviction. The last time the 7th Circuit cited the 9th Circuit for something as contradictory as these rulings are was back in the mid 70's and hell nearly froze over. The CFAA and the shenanigans at HP put a whole different spin on what happens when you use a computer on line.

The criminal case is where it is for convenience not optimal prosecution. If the guys raise too much ruckus it would get moved.

Explain to me how its a slam dunk for me to be convicted of fraud if I went onto a site placed an order for anything with the intention of not keeping or fulfilling the order? Like lets say I just wanted to annoy the hell out of some company I didn't like.

DamnoIT said:   If I had the credentials I don't know that I would stand up for their actions and activity. While we all have probably benefited from an offer that was more than the retailer expected, all be they allowed for it. This is a different case where the parties knew that they were never going to get the goods but were going to be able to used fatwallets generous CashBack system to reap rewards. Now one or two times great but the amount they pressed could jeopardize the future of CashBack here on this site. I am no way in favor of that, so the more I process it I think they need to get a good penalty but I guess SIS is more concerned about the potential president that could be set. One that takes liability of a mistake on the sellers end to the consumer. One that implies that a buyer has to know what is a reasonable offer no matter what it is. So if they are ordering a tv for $10 and it has a retail of $500 then they have in effect stolen $490? No way that should be allowed. An offer of sale and a purchase of said offer should finalize a transaction. I guess it will be interesting to see how this one turns out.

You mix moral and business,my friend! Let's say there was a price mistake on iPads for hundreds of dollars. I know you'd be the first in line buying all those iPads and reselling them on eBay. Stop preaching to the choir here.

Joe328 said:   I'm pissed because this Nordstrom/FatCash technique was not mentioned in the FWF heavy hitters thread. I hope no one else is holding out on techniques!

I hope all of the heavy hitters are reviewing their tax returns this weekend. This has gone viral over at the IRS center in Austin. Uncle Sugar has his tin cup ready to take your donations. Just file your 1040X along with your certified check, no questions asked. You might want to suggest the same to people over at Frequent Flyer.

nsdp said:   Joe328 said:   I'm pissed because this Nordstrom/FatCash technique was not mentioned in the FWF heavy hitters thread. I hope no one else is holding out on techniques!

I hope all of the heavy hitters are reviewing their tax returns this weekend. This has gone viral over at the IRS center in Austin. Uncle Sugar has his tin cup ready to take your donations. Just file your 1040X along with your certified check, no questions asked. You might want to suggest the same to people over at Frequent Flyer.

Are you saying credit card rewards may be taxable as a result of this case?

dshibb said:   I'm calling them ignorant for dropping clearly dumb analogies that aren't applicable.I would easily call much of what you have posted as ignorant as well, which would be my opinion, just like your words are your opinions.

You claim the brothers never gave Nordstroms false information. They told Nordstroms they wanted over $20 million in merchandise. I think we can both agree that that is certainly false information. Or are you still ignorant?

BarryAndLevon said:   nsdp said:   Joe328 said:   I'm pissed because this Nordstrom/FatCash technique was not mentioned in the FWF heavy hitters thread. I hope no one else is holding out on techniques!

I hope all of the heavy hitters are reviewing their tax returns this weekend. This has gone viral over at the IRS center in Austin. Uncle Sugar has his tin cup ready to take your donations. Just file your 1040X along with your certified check, no questions asked. You might want to suggest the same to people over at Frequent Flyer.

Are you saying credit card rewards may be taxable as a result of this case?
Credit card rewards are generally not taxable, especially if they are from a personal card, and if the form of the rewards is Cash Back, that cash gets deposited to your deposit account.

The problem is that the IRS hasn't explicitly stated this, just that most people think that credit card Cash Back is similar to a cash rebate, which isn't taxable. The problem with a high profile case like the Chiu's is that there's a risk that the IRS might take an interest in such a huge amount, and we could find ourselves up sh*t creek if this caused rebates to be looked at in a new light. Considering the far-reaching implications of changing the existing practice of treating cash rebates as non-taxable, I really wonder if the fear of changing this practice is realistic.

I wouldn't panic just yet. nsdp has implied taxability of Cash Back in the past, including asserting that credit card issuers are reporting Cash Back amounts for individuals to the IRS. Until he shows some substantiation of what he says, I'd treat it like any other anonymous posting on the interwebs... including this one. The person I listen to is my tax accountant.

Edited to expand and change some of the wording.

ETA: Just to be clear, I discussed my 2011 credit card Cash Back with my tax accountant, and he doesn't believe the IRS will consider that as income. Still, we agreed it was best that I maintain some sort of cash reserve for a worst-case scenario. My point remains: talk with a reputable tax advisor if you've concern about credit card rewards, rather than taking my or anyone else's word for it, especially in an anonymous forum on the Internet.

glxpass said:   The problem is that the IRS hasn't explicitly stated this, just that most people think that credit card Cash Back is similar to a cash rebate, which isn't taxable. The problem with a high profile case like the Chiu's is that there's a risk that the IRS might take an interest in such a huge amount, and we could find ourselves up sh*t creek.The issue would arise when credit card rewards exceed the amount spent to receive them. Here, nothing was spent to receive them (I suppose the brothers could claim expenses like computer, ISP, etc to lower their net income), thus there would be tax implications.

I don't think this got answered...Does a plea bargain establish any kind of legal precedent?

fwratz1 said:   JorgeBurrito said:   I'm starting to think there are some FWF heavy hitters out there that are sh$tting bricks due to participating in fraud like this and no doubt sharing it between themselves. Sometimes I guess it is good to be a lowly lurker (well to finance anyways). Hopefully you were all smart enough not to abuse what you found too badly, you really don't want the fed after you.

I think it is time for the thieves that have knowingly abused FW/ ebates/any other CashBack heavily to own up to their crimes and plead guilty to a lesser charge so that they can atleast hope for a lesser sentence than the chius.

Also, FW needs to do the right thing, which is to start auditing the FW/ebates CashBack accounts of the heavy hitters. The list of people that have rated this thread positively would be a good starting point for a possible list of CashBack abusers.
I fear it's a forlorn hope that you are being sarcastic/ironic.

ETA: I strongly advise others not to boast of specific Cash Back amounts or "confess" to anything in FWF. It's simply a matter of discretion to withhold confidential types of information rather than a belief something will happen to you. Also, describing something as a "confession", when it isn't really one -- at least currently -- just seems asking for trouble.

nycll said:   To see the deception is to ask the question if they could be intentionally trying to buy all the merchandize?

Certainly they could be. Indeed, my understanding is that that's what they *did* do before they were banned. AFAIK the reason they targeted Nordstrom's in the first place is because of their no-questions-asked return policy, combined with their sloppy accounting that didn't refund CB when a .com item is returned to a B&M store. I think the truth is that while they preferred that the items not ship, they didn't much care either way. If they started shipping again, then they'd just return them to the B&M store.

Posters are right that the $23 million figure isn't irrelevant. My issue is with *why* it's relevant. It helps establish that the purpose of these transactions was to earn Cash Back (whether or not the merchanise actually shipped).

That's a slam-dunk civil case for unjust enrichment IMO. I suspect nsdp and others are right that the decision to go after the brothers for criminal fraud was strategic and pragmatic.