cybernet news fraud suit

[burn the bush]

http://woodtv.com/Global/story.asp?S=2591580&nav=0RcdTLbg

Lawsuit filed against The CyberNET Group in Grand Rapids

Barton Watson
Barton Watson

(Grand Rapids, November 19, 2004, 6:01 p.m.) A lawsuit has now been filed against a Grand Rapids Internet company after federal agents raided the building.

On Wednesday, federal investigators shut down The CyberNET Group on South Division Avenue and locked employees out. Sources tell 24 Hour News 8 that investigators were looking for evidence of wire, mail, and bank fraud. They hauled away computers and financial records linked to the company.

Employees returned to work Friday for the time since the raid. They entered through a backdoor of the world headquarters facility on South Division Avenue.

Now 24 Hour News 8 has obtained copies of a lawsuit filed Thursday against CyberCo, the parent company of The CyberNet Group. Fraud is one of the allegations outlined in the lawsuit.

In the lawsuit, Charter One Vendor Finance of Illinois says it loaned The CyberNET Group $3 million so the company could buy 66 computer servers. But in the lawsuit, Charter One said it could only find evidence of 25 servers at the company's Grand Rapids' headquarters, and The CyberNET Group could not provide an explanation. Charter One believes The CyberNET Group misused the loaned money and used false information to secure the loan.

Charter One says in the lawsuit that The CyberNET Group CEO Barton Watson has a longstanding and uninterrupted history of perpetrating fraud.

Barton Watson was not around during the raid, not in his office, or not at his million dollar home in Ada. He served time in prison in 1994 after a federal judge sentenced him to one to three years for fraud.

According to court documents obtained by 24 Hour News 8, at the time of that sentencing Watson told the judge, “I suffer from a great deal of concern about how I got from A to Z. I have a lot of regret about what happened, not just because I stole a great deal of money from a number of people, but particularly in that I abused their trust and their friendship.”

Later, he said, “I'm still only 26, moving on to 27-years-old, and I'd like a chance to live life, and forever I will have this felony hanging over my head.”

After prison, Watson went on and found The CyberNET Group, an international Internet company. Since the federal raid and subsequent news reports, 24 Hour News 8 has been flooded with e-mails and calls from former employees, alleging years of misconduct.

Although back on the job, employees admit being worried if The CyberNET Group will remain open and operating. Employees were expected to get a more detailed description and explanation Friday about why federal investigators came to their place of business.