So - here is a repeat of a prior blog with facts.
Welcome to the world where one person (Michael Davis) can initiate a path of online destruction against another (Chase Fonteno) by posting for free, false news releases, create concepts that even a news channel will do a story on - before they realize they were duped - and thus leaving a video of the false news that the person can then post on video sites around the world to give the image of bad deeds - even though a judge has now ordered them taken down - I hope and pray you never have to go though what I have had to at the hands of Michael Davis. Hopefully this article will help you protect yourself from this... maybe...
If you have seen the Channel 11 HHP/Fonteno video from 2009 or seen any of the 'interesting' websites on Chase Fonteno or even postings on the rip0ffr4p0rt [spelled the site wrong to prevent them from gaining any more notoriety] , then you need to read this!
A lesson in don't piss off an employee - the damages can be 'huge' if they don't care about their own credit or suits against them.
FACTS
These are the facts about a former employee named Michael Davis - though he has operated under many names in his activities - all after we hired him - days out of Federal Prision for Loan Fraud - in charge of our accounting and banking. [yes, I know, someone screwed up not doing a background check...]
Since April of 2009, I have been in a different world. Mostly a world created by a guy named Michael Davis. Amazing what someone can do with a criminal mind and bent on destroying someone else (and make money at it).
First - I was born Douglas Proctor, took my set fathers last name in high school 9Fonteno, and have gone by 'Chase' since 5th grade, nick name given to me by school friends. My father (step father) was a well known politician in Houston for many years - he passed away in 2008. [more on me at www.chasefonteno.com and on my father at either www.jimfonteno.com or www.en.wikipedia.org/wiki/James_Walton_Fonteno]
Hilton Head Properties [www.hiltonheadproperties.net] and its subsidary companies 'mostly' acquire large multi-million dollar distressed apartment properties from bankruptcy, lawsuits, divesture, tax sales and other manners. Which are partly renovated or what ever issues of 'distressed' that existed resolved and then re-sell - many times on an owner financed note to other investors. The company typically never acquires single family properties, but instead acquiring the mortgages on single family properties for investment income, done in a subsidary company (Hilton Head Finance)
FIRST HIRE
Sept. 2006
Michael Davis came to work for Hilton Head Properties in September, 2006 as our new Chief Financial Officer and Director on the Board. Why did we hire him? Great resume and was at the time 'supposedly' a Director of Finance at EDS. Had a great wife who was an attorney for {big public soft drink company} and a cool son named {lets say Mark to protect the young} who played hockey. He worked for a few months as the company was on the verge of doing a 506RegD State Securities Offering to raise capital. So he was a good fit with the other staff the company had.
COLON CANCER ? OR PRISON?
But a few months after he was there, before the offering came out, in Dec. 2006 - he gave me a letter of resignation. Why? He had colon cancer and was going to Houston to have surgery. I convinced him that I was going to hold his resignation aside and see how it went. Even offered part pay to stay on the Board and remaine the CFO and to review work in Houston by laptop while he was recovering. He agreed. We even threw a going away party for him with all the staff. That was a friday.
On Monday after he left, it occured to us we did not have any idea what hospital in Houston he was going to. Called his house - no answer. So I had my assistant start calling all the Hospitals in Houston (know how many there are? wow...) At the end of the day - we tried his house again (I actually had 3 employees in my office that heard this conversation on speaker). Got an answer by his 'wife'. Actual conversation:
Chase - "Hi, this is Chase at Hilton Head Properties, is this Michael's wife?"
Wife - "ummm... no, I am his girlfriend - he doesn't have a wife".
Chase - "hmmm... maybe I made a mistake, are you an attorney for {big public soft drink company} and he has a son named {Mark}?"
Wife - "no, I am an attorney that work for a company that does some legal work for {that company}, but I do not work directly for {that company} directly', and {Mark} is my son, not Michaels.
Chase - "well maybe I misunderstood about the wife part - my apologies. Michael left so quickly that we did not know what hospital he is at in Houston for his Colon Cancer"
Wife - "Oh... his problems are bigger than colon cancer..."
Chase - "oh no... is he going to make it?"
Wife - "yes, but it will take about 16 months..."
Chase - "wow... you almost sound as if he went to prison instead of the hospital"
Wife - "bingo !"
Chase - "what? are you serious?"
Wife - "he told you had colon cancer? He checked into Federal Prison for 16 months for something a prior boss did and he got into trouble for it" {ahem - he lied to her too, see later}.
Chase - "like what?"
Wife - "Before he was at EDS, he was at a small company and the President was committing fraud, and Michael found out about it - but did not tell anyone for a bit - and finally the Feds got involved. When it all came down - Michael was found guilty for not reporting, so he agreed to be a witness if they would only find him guilty for 1 count of mail fraud, which the judge gave him 16 months in the Federal Penitentiary"
Chase - "wow - that is quite different than he told us"
Wife - "well, I think he did not want anyone to know since it was really not his fault"
Chase - "thank you for your time and I am sorry to bother you"
We decided to 'accept' his letter of resignation. :) And move on.
We should have done more research, but we let it die and removed him from our website and all literature and went on.
I never wrote Michael nor contacted him. I had a few issues about him lying - but it appeared to be 'honorable' in the intent of not causing any worries at the company with staff, investors and others since he was only here a few months and no real public information other than one news release that we were hiring him. And as a private company we decided to not make a news release about his resignation.
MICHAEL DAVIS OUT OF PRISON - SECOND TIME AROUND
So the company moved on. Then, without tought, 16 months later I was contacted by Michael Davis by email asking for a website link to documents we used.
I honestly could not even remember who he was at first and had to ask HR Dept - I was advised just 'colon cancer guy'? Oh... yea...
I thought - know what - lets at lease get closure, so I met Michael for lunch, where he reiterated the same story he told his... ahem... 'wife'. I felt sorry that his life was messed up by someone else. That day will live in infamy for me... :(
We were short on a bookkeeper, and actually he did a good job for us when he was with us I thought, but could never use him for a CFO, so I agreed to hire him for bookkeeping at minimum wage (literally), in Sept, 2008.
He jumped in and appeared to really go after it. But there were times that he acted odd, even angry around the office. I did not realize till later when it was pointed out that it was when I would be 'dating' someone. And was nice again when it would end. I decided during HHP's turnaround that we needed to do two things, one was to move from our 22,000+ sqft offices on the 38 floor of One Elm Place (since we were down from 50+ employees/contractors to about 6 for now) and to raise money against our mortgage entity, Hilton Head Finance, which would require an audit of our accounts. The latter issue seemed to make Michael Davis nervous, but I did not relate the issue.
So, we moved Hilton Head Properties to the penthouse of the Hartford Building, 400 N St Paul (14th floor). Really nice offices, but about 1/2 the space and 1/3 the rent. Room to grow also. Odd, when we moved in the first week of May - Michael never showed up. Would not even answer phone calls. Just 'gone'.
ALL HELL HIT...
1. We started noticing that former employees and investors were posting false information on us on a scam site called 'therip0ffr4p0rt'. Lots of postings. After talking to the former employees, they stated not only did then not post it, but they would sign affidavits they did not - which we now have. That site has amazing search engine abilities to show up always on the first page of any search that has a word in it. Can't sue them and they will not remove false info - even under a judges order. They operate under a federal law called 'the internet decency act'. Only, it is indecent what they have done to good people, including HHP. But 'lots' of individuals and companies. I have read horror stories how this guy gets paid tons of cash to 'soften' the blow (he use to remove data for a large fee - but he is now in trouble over that - for fraud & rackateering. So - it will 'never' go away. :( [more on this below as to 'really' what happened]
2. We had our mail forwarded from the old office to the new one. Shortly thereafter, my assistant received bank mail showing that a credit card was taken out on one of the associate companies, and Michael Davis was listed as the 'President', and had personally used approx. $9,500 of the line of credit. Loan fraud? (again, did not know the truth about his background yet).
3. Within a week of moving into our new offices, the Dallas District Attorney contacted us claiming that we were being 'reviewed' about a complaint of real estate fraud. Huh? So we cooperated, gave them requested documents and followed up 'very' often sending over more documents without them even requesting to ensure they had a full picture of what we do. We were advised they had received some documents and notes from Michael Davis. I don't think they were aware of Michael's real background either. They never say 'its over'. But we never heard another word - that was June/2009.
4. During the 'same week' that the District Attorney arrived in our office - we were contacted by Channel 11 wanting to do a story on 'something' as they would not say. And they would not discuss it at all - 'except on camera'. That was their constant request 'on camera interview'. Two fathers in politics have taught me - do not talk to the press unless you know exactly what is going on. So I did not. They did say they understood I and the company were under investigation by the DA. I and my attorneys responded to Channel 11 by email 'guessing' what they were doing a story on. We hit it on both counts. They pursued a story for about 1 1/2 months. Then they advised they were going to do a story without my statement. Fortunately they used the emails - but only the parts they wanted to. The guy behind the screen? Michael Davis. LOTS of 'false' information, 'misleading' information and even reviewing documents we do not use and have not used since 2004 or 2005. And 'we don't sell homes'. Ever. We purchase notes. Oddly - the story was about one property (Cecila Landis) that a guy named Mike acquired the property in his company and sold to a family for $500 down, no credit check and no payments for a number of months - but they had to fix the property themselves. Later Hilton Head Finance purchased the note from Mike. But HHF 'guaranteed' their title when the note was purchased as the holder of the note. But - when they were delinquent in their payments for many months and notice of foreclosure was sent - they got an attorney who noticed an issue in the contract - an issue we agreed was a problem - so... we 'gave' that property to the Landis - with only two terms of agreement. One - they would assume the delinquent property taxes. And Two - we no longer would guarantee the advserse title issue. A deal that was done by 'their' attorneys. We agreed - and it was done - over 3 years ago ! So... what are they complaining about the 'repairs'? And a family showing up years later (a family that left the house to rot, not pay taxes, blight on the neighborhood and danger to the children in the area - which was turned into a home for someone willing to fix it and pay taxes?) No idea why this property was brought up. And that was a news story over 9 months ago. Not another word. Just slander/libel. Not our property. No mortgage to us.
The others? All I know now, is that they all are related and purchased property all at the same time from either the Sterling, GP or BP companies - not our company. We later purchased the notes. They purchased with $200 to $500 down, no credit check and no payments for several months to get the properties repaired. We purchased the notes before their first payment was due. They never did any repairs nor made any payments. And we never heard another word. We sent out notices to cancel their agreement and give them a refund so the property could be sold back to the company we got the note from - but never heard a word. So we later foreclosed. Not sure 'what' was going on there. Then we returned the properties back to the parties that sold the notes to us for a credit. Why did they 'know' Hilton Head and blame us? It appears they were visited by 'some guy' that advised them HHP and Chase defrauded them. Guessing the 'guy' was Michael Davis considering all else he did.
Why did the news and the DA take action as they did? We later found out that each was advised by 'Michael Davis' that the other was doing an investigation. (ie. DA advised Channel 11 doing investigation and vice versa). Verifying one another provided motivation - and Michael Davis provided the fuel - even if it was a bit misleading and out of context.
ITEMS IN THE NEWS STORY - REAL TRUTH...
a. I do have a stock brokerage violation from 1995. It is disclosed to 'everyone' always. New employees, charities I sit on board/committees, investors, partners, banks, hard money lenders, wall street, brokers - everyone. It is even disclosed to anyone I ever date within the first few dates. Not exactly 'hidden info'. The violation? I was new to securities on the issuance side and violated a disclosure requirement I was unaware of. I received probation for the violation, with a right to travel almost anywhere and requirement to pay any damages. And I am NOT on any supervision or anything else. That was over a long time ago. False statement entirely.
b. Hilton Head Properties and Hilton Head Finance have 'never' during its existence purchase 'any' single family homes or acquired any adverse possession homes. We 'did' rent space to over 40 investors that would acquire homes by many means, including tax sales, bankruptcy, foreclosure, judgment lien sales, auctions and more - including Texas Statute adverse possession. The 'vast' majority of 100's of mortgages we acquired were from properties the investor 'purchased' by these means.
This story was about the 'few' that no owners could be found by the investor. Dallas has over 2,000 abandon, boarded up home, many of which the owners are dead and no heirs exist that can be found. The County/City/School District have so many delinquent tax properties that it takes 'many' years to finally foreclose on these (some we have seen have over 20 years back taxes). And the City is 'backlogged' in tearing homes down and it will typicall 'years' to get to them to tear it down. Some of the parties we purchased mortgages from started the legal process defined in Texas Statutes for adverse possession to acquire them so families that are tired of renting could buy a home for $500 down and $300 monthly with no credit check and fix it themselves. We agreed to acquire 'some' of these 'adverse' possession notes - of which the company has approximately 30 active adverse possession notes. However the documents provide the the holder of the note had to 'guarantee' title to them, or provide them a nicer home. Hilton Head has a 'golden rule' which is 'very' prominent on our website, and always has been for years - which the news apparently 'intentionally' failed to show (considering they anaylzed the site and it was on the front page?)(www.hiltonheadproperties.net) which states the ethics that the company operates under and also the terms of guarantee to all home owners and in particularly the ethics we operate under towards both the buyer and 'heir apparent' of an adverse property we hold a note on, and in fact the company has acted on that guarantee a number of times. And even been reviewed by several Attorney Generals with no demands further action warranted.
The investors that acquire properties and sell them to individuals, which the company many times acquires the mortgage on - have now been advised
- 'while we want to help the community rid itself of blighted properties and provide homes to those wanting to get out of slum properties - the image of what you are doing and our involvement of purchasing notes on adverse possession properties is damaging our credability because of Channel 11 and the local agencies, and therefore we cannot acquire any further adverse mortgages. We are sorry.
Chase Fonteno, President
c. Name not on anything? I sign for 'everything' for HHP, HHF and all affiliated companies. Not sure even IBM has the president's name personally on everything. This is a 'corporation' that has over $3mil invested in it by investors and has over 130 shareholders. The 'company's name should be on everything - not mine personally. Why were checks in my name? No Idea. All mortgages are owned by Hilton Head Finance. All payments go to Hilton Head Finance. I have seen 'many' payments made incorrectly to former owners of the notes, to the name of the sales person, even a few times to our bi-lingual assistant. ALL are stamped Hilton Head Finance and deposited in HHF's account for proper credit and accounting. And we are currently doing a massive audit of HHF for a very large securities offering. Think if there was some impropriety that we would be doing a securities 'audit'? What people will do to report 1/2 the story and put it out of context to get a more sensational story.
d. This blog as 'real estate catburglar' being identified as 'teaching others' how to 'really' steal real estate. This site gave advice on how to deal with vacant, abandon, tax delinquent property that is a blight on society a danger to the children living near it and a haven for drug dealers and bums. And it was characterized as 'bad'?
5. Once the news story was out - it was copied approximately 50 times to websites all over the world - mostly with a title of 'Chase Sucks'. Michael Davis usually appearing as the poster or enough information posted to know it was him. Again - putting text around the new story that was neither in the story nor true.
6. Actual 'news stories' started getting posted all over the internet - anywhere he could get the ability to post a 'free' news story. Wild stories - all completely slander and false information - which fortunately over a period of 4 months almost all news services read and agreed to delete as it was not news, but a slander attack.
7. chase-fonteno.com - Michael Davis most creative effort outside of convincing Channel 11 to do a story construing many facts. This website is interesting in that it takes 'some' facts and creates an image that far exceeds reality. And he uses 'things' he created elsewhere in the internet to support it.
8. Davis started posting on the internet in facebook, twitter and by email the company's bank balances, did it regularly for several months to prove he could use inside information he obtained to hack into our bank accounts - even using that information to transfer funds to a bank account he managed. We had to get 'new' account numbers for 'every' account (over 30) in the end to finally stop him.
9. Davis hacked my personal twitter and facebook account (he had enough info on me to get in and change both the email and the password to take full control. Fortunately facebook returned control very quickly (a week). But twitter? 3 months since they do not really have a staff and take request for review and action as they can. He posted on both sites, which went to my family, investors, employees, financiers, etc. mostly things indicating I was gay. While I completely respect the gay community, I am as far from gay as you get. Control was finally given back by the site company and changed back.
10. I have been recieving numerous 'gay' magazines and other paraphernalia at my office and home - all ordered under my name, using an american express card that we are told by those companies that does not allow a charge. No idea, but it is not my credit card.
11. Letter written to my mother, brother and some friends and investors from 'anonymous' making false claims about me.
12. My cell phone, power and other services were oddly turned off at times - always being told it was 'Chase Fonteno' that called in the cancellation. I did not.
There is more... but it is more of the same.
LAWSUIT - ANY GOOD?
So, HHP & I sued for slander, libel, defamation of character, dispargment, tortious interference,
http://www.hiltonheadproperties.net/legal/michaelrdavis_slandersuit.htm
http://www.hiltonheadproperties.net/legal/michaelrdavis_fraudsuit.htm
We won on BOTH suits as to his actions, by default, but had to prove up some of the evidence as to the restraing order we got against Michael Davis. We now go to court in April and May to plead for the damages.
WILL THE REAL MICHAEL DAVIS PLEASE STAND UP
In the suits - we learned the REAL background of Michael Ray Davis. There was never a 'boss' that took advantage of him or got him into trouble. Davis applied for loans (cars, cash, house, etc.) by stating false information. He went to jail for loan fraud.
His 'work' at EDS? It was based on his employment at several 'other' large companies. It appears all of those were not true. So even EDS hired without proper checks. And when we hired him? During 'the' week, or the 'week after' he was found out due to the federal indictment on him for loan fraud. So - we 'did' technically hire him from EDS. But we did not do the amount of checking we do now.
For all you in la la land, or hoping to build a business, or already running a business - this can happen to you. There are people out there that are street smart that can destroy you by doing something as simple as logging onto the rip0ffr3p0rt site and saying false things about you and your company.
NO REAL PROTECTION
A suit is fine and winning a judgment is even better. But - for what? Millions of dollars against someone that has nothing and does not care? It does nothing to help against someone that is a street smart convicted felon that does not have anything and never will. In fact, there is no law that prevents someone for saying false things against you even after losing a suit for the same thing. You cannot stop them. All you can do is sue for damages. This is not a lesson on how to prevent it. In some ways - there is no way to protect.
DAMAGES
And the damages? How about mine as an example. After these people seeing the video and Michael Davis's website and/or the rip0ffr3p0rt site:
- Investor stopped investing with us.
- District Attorney visit
- On the news - most not true and misconstrued, no manner to 'reverse' that.
- Asked by a couple of charities I've been helping and donating to for years, to leave until it is cleaned up.
- Women I would go out with, after doing a google search, all of the sudden back away - later admitting due to video.
- Own family questions and loss of respect
- Have to ask for affidavits of former employees & investors as to 'not them' posting false statements when they just don't want 'any involvement at all'.
- Lots Of Expense fighting it.
- Have to write a blog because there is no simple way to make all he has done go away. Even with a judges order.
WHAT MADE HIM GO OFF ?
By the way... What made him do this? You have to admit - he did a LOT of bad things. WHY????? After considerable review by attorneys, staff, former staff and others hired to make sure it does not happen again?
1. We found a huge volume of letters he wrote to inmates in the Federal Prison he was at, saved on our office server in his private drive area. It detailed actions and escapades he wanted to do to others and actions he had already done. All related to other men indicating he was very attracted to men ('who knew...') That with his past reactions when I would be dating and this left probably thoughts of personal interest that was not fulfilled?
2. He did illicit bank activities that were not authorized, and most likely would send him back to prison for committing another crime.
Plenty of motive - if we had been looking.
Still no idea how to protect from it in the future, other than better background check and possibly get to know a possible employee 'better' before hiring. Meaning check out home life and maybe a series of questions put together by a psychologist to identify certain personality triats?
Has he stopped? No. We rehired a former employee back recently. He got word quickly and sent her an email of 'guess' who Chase is claiming is working at HHP again. She responded 'probably me, because I am, please do not contact me again'.
Now if he would only channel all that energy into something useful and beneficial. Some people just live for misery. I am a happy person. True - this has hurt me in many ways. But it has also made me stronger and I will endur it. Even though the average person will look at the headlines and assume it is true and never give it a second thought.
I use to think all that was in the news was factual and complete. I learned a long time ago that was not true. News would not be interesting if it was not sensational, and so half truths and out of context data and statments make for 'good news'. That is sad.
If you made it this far - thank you for hearing the other side.
Have a good life and keep an eye out - you never know who may destroy your life.
Chase Fonteno
Oh - and the legal stuff to keep suits away - The statements made here are opinions of Chase Fonteno and while believed to be based on facts, there may be items here that are not factual.
