Chris Tulino

Thanks for the new thread, Chris.
I too was a customer in 2001 and cut my losses after the one so called modification. Our 2002 returned had us paying about $2600 in taxes due to the bogus 1099 from G&J Eagle Enterprises. So if and when the IRS gets to our file, the bite is not going to hurt as much. I really feel for the ones that had faith and trust in what they were told and sunk so much more into this scam.

Oryan is still sending out those email alerts - and acting as if that none of this has been their fault. They even have the audacity to suggest that if the IRS says that the promissory notes are moot then they "may" be required to write 1099 for them. Give me a break! How can you write out a 1099 for income that no one received (re: the promissory note)? Their scam continues!!!!

Latest Crapmail BS from Oryan
Still playing people for fools.

Dear Mall Owners:

We appreciate the many emails we have received in response to our previous emails to you. We are reviewing them daily and comprising a list of issues to address in our communications to you. The volume of NADN post bankruptcy calls and emails continues to be so high that we cannot respond individually.

The hot topics continue to be refunds, promissory notes, and your tax documents sent to NADN. Hopefully, the message we passed on to you from the NADN Bankruptcy Trustee, Biff Leonard, will answer questions regarding you tax documents and other issues.

Regarding promissory notes, we still need to know the outcome of the appeals cases, whether or not the IRS will require us to send Form1099's to each mall owner for the balance due under the notes should they be cancelled, and what impact this will have for those mall owners who claimed and were allowed the tax credit on their federal return(s). Oryan is committed to satisfying the promissory note issue in whatever manner is deemed to be in the best interest of the mall owners. While waiting for these issues to be settled, Oryan has stopped accruing interest on the note balances and has stopped applying a portion of the commissions to the note balances.

Oryan will not be making refunds. It is our objective to continue working with and supporting mall owners in generating revenue from their Internet Shopping Malls. The new release (next week) will be extremely beneficial and profitable to you with new features and additional ways to earn money. It is truly the best shopping mall business opportunity on the Internet.

ISSUES FROM CURRENT EMAIL
-------------------------------------------

Sites going inactive: A few mall owners found that their site was inactive. The back office was live but not the shopping mall with their unique PIN. This problem has been fixed and should not reoccur.

PIN CHANGING: This has been extremely frustrating to both mall owners and to Oryan technical staff. A shopper viewing and shopping on a mall owner's site (ex; 12345) finds that he/she has been switched to another mall owner site (ex: 91435) after clicking on sub pages of the site. We believe this problem is fixed in the new release that will be out next week. However, there may still be problems for users who have cookie blockers turned on or who are running security software that blocks cookies. There are some aspects of the shopping mall software that require the use of cookies. We now need to monitor and analyze the use of the new release before making any further decisions.

HITS NOT CONVERTING TO SALES: Many of you have purchased packages that claim they will result in an increase in potential shoppers to your site and therefore the potential of additional sales and commissions. Oryan is not able to evaluate the working and the performance of the individual packages. Using a server package, called Web Trends, we are able to monitor the incoming traffic. We do know that there has been a significant increase in traffic to Mallforall and Shopn2000 since mall owners began purchasing traffic packages. The bad news is that 70% of that increase, approximately 8,000 hits per day, stay on the shopping mall for about one second. It appears that they are not bonified shoppers and may be computer generated clicks. We also know that many of the 8,000 additional hits to the shopping mall are coming from off shore.

Oryan reiterates that Internet marketing of your shopping mall business (creating hits) can be extremely profitable. We continue to advise you to learn about marketing strategies and we still believe that the website www.wilsonweb.com is a good place to start. You also can learn a great deal about key word marketing by visiting www.overture.com and www.adwords.com.

HITS PAYING DOWN PROMISSORY NOTE BALANCE: We are aware that some mall owners are being solicited to purchase traffic packages and are being told that hits through these packages will pay down the promissory note. This is completely untrue. On a similar note, some mall owners are being solicited to pay $199 to have their note liquidated. That too is false. None of these solicitations are from Oryan and are to be viewed with extreme caution.

UNSIGNED DOCUMENTS: Some mall owners are questioning whether or not they have a promissory note if they did not sign and return the documents sent to them after making cash or credit card payment to NADN. The answer in this case is "no." If you did not sign the documents, as far as Oryan is concerned, you do not have a promissory note.

MALL COMMISSIONS: Oryan has been paying mall owner commissions quarterly. The last checks were sent out in March, 2004. We are currently calculating commission reports from Linkshare and will be issuing checks next week

Support

Another Aside: I meant to include above that if the IRS determines that this mall business is NO business (pun intended) than how in the world cna Oryan think that they will be required to issue 1099s for the promissory notes????

I think that Bagdad Bob has been hired to be the spokesman for Oryan.

Does anyone know if I need to file the customer claim form if I am just trying to get the refund I feel they owe me and they say they don't?

Dianna-M0108,

Which customer claim form are you asking about, and which "they" do you mean?

This must be one great out of control cd!!!

http://www.mallforall.com/SearchResults.aspx?s=72

I'm buying the Out of Control CD with all of my commissions from Mall4all/ShopN2million. After the promissary note is paid of course. Does this CD come with those rugged roadies or do I just have to fantisize? I'm kinda fantisized out, what with thinking I've got an online mall&all.

Reminder about Class Action Lawsuit --

If you have not joined our "Class Act Legal Cooperative" group but would like to join us and would like an overview of the situation sent to you automatically, please send an email to opaobie@opaobie.com with NADN-Oryan-Overview in the subject. You will be added to the list and will receive an overview of the situation (and a free gift if you read all the way to the bottom of the email you receive). This does not obligate you to anything. If and when we proceed with the lawsuit, you will be given an opportunity to participate or decline.

You may also contact me through my website link (just click on my username and then click on the "Contact Us" button and fill in the form). If you put CALC in the comments section, it will be filtered to my "Class Act Legal Cooperative" folder. Same goes for just sending an email to me. Put CALC in the message or subject.

If you wish to contribute to the legal fund, visit my site and click on the "Make a Donation" button.

Opaobie
On the other christulino website someone, it may have been you, gave this web site address http://www.nvb.uscourts.gov/
they also mentioned customer claim forms. If you go to this site it is the United States Bankruptcy Court District of Nevada and that is where they have the form. So can we use these forms to get more then just the paperwork back?
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Read the Mall Update #5 from Oryan. It explains what you are asking. Here it is again in case you didn't receive a copy. If you can't find the claim forms at the site listed below, email me and I will send them to you. Links to download them are in the Overview letter I have sent to everyone who has joined the group preparing for the class action lawsuit, so if you have that letter from me, you will find the link to download the forms.
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There are two issues: Proof of Claim as a Creditor against NADN in the Bankruptcy proceedings, and return of documents. File a Proof of Claim to be listed as a creditor to have money returned for services or products you either didn't receive from NADN or that you feel were inferior and you want a refund or you feel you were sold under fraudulent or false or misleading circumstances.
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Return of documents you sent to NADN for tax preparation is being handled as explained in the court's letter below.
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To all associated with NADN.

We have established the court website at www.nvb.uscourts.gov to provide updates to all of you. Please check that website frequently. We are also setting up a "hotline" to provide answers to questions, however, that hotline is not yet in operation. That number will be 702-730-2033.

NADN was operating under Chapter 11 of the Bankruptcy Code since June 10, 2003. On May 27, 2004, the company converted the case to one under Chapter 7 (liquidation).

MEETING OF CREDITORS
A meeting of creditors is scheduled for July 8, 2004 at 4:00 PM at the Federal Courthouse, 333 Las Vegas Blvd South, Las Vegas, NV. The debtor~s representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice.

DOCUMENTS AND WORKING PAPERS
Many customers provided financial information in the preparation of those tax returns in form of canceled checks, prior year tax returns, and other documents. We will make every effort to return those documents to you. We hope to have procedures in place by the end of June. The proposed procedure is to charge an administrative and handling fee, to be determined, to locate documents and return them to you. Please check this website regularly to obtain your documents.

AUDIT DEFENSE
No support is currently available for audit defense. You are advised to contact a tax attorney to assist you in an ongoing audit.

PROOF OF CLAIMS
A proof of Claim is a signed statement describing a creditor~s claim. If you do not have a proof of claim form, you can obtain one at any bankruptcy clerk~s office or at www.nvb.uscourts.gov. If you do not file a Proof of Claim by the ~Deadline to File a Proof of Claim~ listed above, you might not be paid any money on your claim against the debtor in the bankruptcy case. To be paid you must file a Proof of Claim even if your claim is listed in the schedules filed by the debtor corporation. The claims bar date is October 6, 2004. IF YOU HAVE ALREADY FILED A PROOF OF CLAIM, PLEASE TO NOT FILE A DUPLICATE CLAIM.

Please do not contact the Bankruptcy Court, the Office of the United States Trustee, the Clerk~s office or the Trustee regarding tax returns or audits.

-------
William A. Leonard, Jr.
5030 Paradise Road, B216
Las Vegas, NV 89119

Chapter 7 Panel Trustee
District of Nevada

From the Las Vegas Sun June 30th News Briefs... http://www.lasvegassun.com/sunbin/stories/sun/2004/jun/30/517103247.html?National Audit Defense

"Injunction hits NADN workers

Former executives and employees of the now defunct National Audit Defense Network have been enjoined from continuing to sell what federal prosecutors call tax scams.

An order entered by U.S. District Judge Lloyd George this week approves a preliminary injunction against some of the principals behind the Las Vegas-based telemarketing company that closed its doors and moved to convert a 2003 bankruptcy filing to a liquidation on May 26.

The order comes after a Justice Department motion claiming that former executives and employees of the company were illegally using NADN's customer list and database, "and are continuing to scam customers through other entities."

The order grants injunctions against ALR Inc., Lee Panelli, Jeff Klingenberg and Ric Klingenberg."

For anyone who has already refiled their taxes - do we need to include the 1099 we received pertaining to the clicks. Hopefully I will get all of the forms that I need before the deadline. I am having trouble getting the tax form from my mortgage company. I am afraid to find out how much I am going to have to pay .

bev

For anyone who has already refiled their taxes - do we need to include the 1099 we received pertaining to the clicks. Hopefully I will get all of the forms that I need before the deadline. I am having trouble getting the tax form from my mortgage company. I am afraid to find out how much I am going to have to pay .

bev

Bev...Has the IRS contacted you? Was your taxes prepared by NADN? NADN did not prepare my taxes and the IRS has not formally contacted me, I am not doing anything. A lot of dynamics are going on right now. From what I read, I'm believe that the only ones the IRS are interested in are the ones that had their taxes prepared by NADN. I also believe that from what I've read from the Justice Departmen is that the 1099s cut from G&J Eagle Enterprises are bogus. Have patients and wait for further developments. I was very nervous when this all came to a head last month, but I'm now going to take a wait and see posture.

I will be prompting the lawyers again this evening, but it appears they may be waiting to see how the NADN bankruptcy and the DOJ case against NADN and Oryan et al proceed. I urge those of you who have offered to help find legal counsel to proceed with renewed urgency. There are several interrelated issues to be decided, and how the outcome will affect us is impossible to predict.

We may be allowed to continue to operate the malls without the ADA credits but with tax credits allowed for any legitimate online business. It seems very remote that Oryan can make modifications to the malls to meet the requirements of the ADA, so the value of the business has dropped considerably. The failure of the malls ever to generate profits anywhere close to those promised by Oryan is also evident. For anyone wanting to terminate the contract, a means to do so without having to pay off the promissory notes has to be defined by the court. That leaves the issue of the promissory notes to be determined. The DOJ has claimed they are bogus, but until a court decides that, they are still valid. If the sites are shut down and declared illegal, we have a right to demand a refund of our downpayments and voiding of the promissory notes.

Refund of tax credits taken in the past under the ADA is an issue with serious consequences, is complicated, but still allows us to argue that we took those credits based on information provided by tax experts at NADN, and NADN should be forced to refund the tax credits to the IRS or pay clients as they guaranteed under the audit protection we purchased. Since NADN is being liquidated, the back taxes should come from their assets to the extent the assets allow and the rest written off, just as we are expected to write off that portion of our claims against NADN that we will never receive. If we must repay them, we should be allowed to deduct all our losses for services and products from NADN, and if we are unable to obtain a refund of the mall downpayments and relief from the promissory notes, deduct those costs, too. The IRS will argue that we received the refunds, they should not have been allowed, and we must pay them back. We can argue that we took those credits based on advice from recognized tax experts, so they should be liable for paying them, not us. The IRS may even demand interest and penalties, but we could certainly appeal the interest and penalties. As you can see, the arguments and rebuttals are complicated. That is why we are trying to obtain legal counsel as soon as possible. We may need both a class action lawyer and a tax lawyer before this mess is settled, so anyone who has access to either or both of those kinds of lawyers, feel free to try to bring them onboard.

Until I am contacted by the IRS, I plan to take no action. Each of us must decide that on his own, so advice from a tax lawyer may be in order to avoid having to pay interest and penalties. The problem with amending returns before all these issues are resolved is, the amended returns will probably be incomplete or inaccurate since the issues being resolved affect the amended returns, too.

Stay in touch, and let me know if you hear from the IRS or the DOJ or any of the courts, and let me know if you find a lawyer who will take on this class action.

Nadn has prepared my taxes for the years 2001-2002. I send them my information to prepare my taxes for this year but they were not done. I am trying to get my information together to have my taxes done for this year. I think I will wait to redo my taxes for 2001-2002 but I do need to do this years taxes. I am just not sure if we put the 1099's on it.

bev

In reply to questions and comments I have received, I thought I would share my reply.

We will just have to see what the court squeezes out of NADN, most likely a few cents on the dollar at best, and evenly divided among all of us. Everyone affected should file a Proof of Claim form. The finding of the court will complicate our 2004 returns because some if not all of the proceeds may be a return of money spent this year, such as the Keyword Gold hit generators. Anything you don't get back that you spent this year should be deducted as a business expense for the 2004 return.

Our primary defendant in the class action lawsuit is Oryan -- and all of their partners still standing --, and they have not filed for bankruptcy protection. They do have million$$$ in assets, so there are lawyers willing to take this on. We are also building a legal fund -- a few bucks each from thousands of people can be substantial. You might want to mention this point to any lawyer you contact. At the time of purchase, we were offered our own mall, not a share in ONE site, so the fact that only one actual site exists appears to be a breach of contract by Oryan. We only discovered after the fact that none of the "malls" ever worked -- except for Oryan and NADN --, yet Oryan keeps sending out "updates" claiming they are "correcting" all of that. The DOJ injunction(s) may stop them from modifying the mall(s) at all, thus rendering them completely worthless. This is all part of our position for the class action lawsuit and our claim that Oryan has breached the contract by never performing to contract and now being rendered unable ever to do so, but we need to follow the process to its conclusion since part of our claim against having to pay back all the tax refunds is that these were purchased on advice from TAX EXPERTS at the highly reputed NADN as legitimate business sites that were CONTRACTED FOR and PAID FOR with real money to be modified to comply with the ADA provisions AND generate revenue, and we fulfilled our part by obligating ourselves for future modifications by signing promissory notes. All of that carries with it implied warranties that vary from state to state, but in all cases, it is proof admissible in court that we exercised all prudence prior to purchasing the malls and prior to filing our tax returns. Some at the DOJ may call us "greedy" or "tax-cheaters" and may not work diligently to protect our rights, but I believe the facts stated above disprove that slander.

We claimed tax credits under the ADA based on professional tax advice that we PURCHASED from a highly reputed NADN, which was backed up by an audit protection policy from NADN and which will now NOT be honored by NADN. That alone demonstrates we exercised prudent judgment, and until the IRS makes a final ruling and notifies each of us in writing that the malls fail to meet the guidelines, we still do not know for fact that they don't. Both NADN and Oryan filings and statements can be used to counter that finding, and even if denied, they bolster our position of acting in good faith and in taking every reasonable precaution before filing our tax returns. If we file for an extension, what do we use as justification, and how do we determine the actual tax owed? If the bankruptcy denies us any means to recoup our losses, then the IRS should allow us to deduct them as business expenses in calculating taxes owed before filing amended returns. That is why I believe I should do nothing yet, and that will be my argument if the IRS tries to impose penalties and/or interest. I honestly don't know what to put on an amended return or what to argue in requesting an extension for anyone who has not yet filed a 2003 tax return. Keep checking the bankruptcy court site and looking for notices from the Trustee concerning return of tax documents so you can file your taxes if you haven't done so or need to file an amended return. I can't emphasize enough that you MUST file a Proof of Claim form to make sure you are on the list of creditors AND so you will receive notices from the court and the Trustee (unless Oryan retransmits them as they receive them).

The courts and the IRS will have to resolve all of these matters, but surely they can't deny us legitimate business deductions for money we actually spent to purchase and advertise our malls and then force us to pay taxes on revenue from those malls which we never received and that was "allegedly" applied to promissory notes which the DOJ now claims are invalid. If we have to pay back the tax refunds that resulted from claiming the ADA tax credits, I will fight them in court to allow deduction from those refunds of all losses and expenses associated with the malls and the products and services purchased from the bankrupt NADN. They have a paradox to resolve, so keep the faith.

...I don't know anybody who plans to keep the mall after this is settled.

I just found this that was posted over at the IRS site http://www.irs.gov/businesses/small/article/0,,id=106472,00.html

it sounds like it might be good news for us.

bev

Please read this finding from the IRS regarding "Misuse of Disabled Access Credits". If nothing else, it certainly adds tremendous clout to our case against Oryan. I find several of their points insulting and open for rebuttal, but that is for the lawyers to argue. Expect an "update" from Chung Phan (Chris) Oryan Management Support anytime now.

http://www.irs.gov/businesses/small/article/0,,id=106472,00.html

Bev,

Thanks for bringing this to our attention.

Opaobie, what do you think about this statement from the IRS link above-
Persons who have participated in transactions similar to those described and who believe they have incorrectly taken a credit and/or a related business deduction should file an amended return. If the amended return results in additional tax owed, interest and penalties will generally also be due. However, voluntarily amending a return may result in a smaller amount of penalties and interest than if a person does not amend their return and is audited by the IRS. For additional guidance on amending returns, seek the advice of a trusted tax professional, call the IRS at 1-800-829-1040, or see Amended/Corrected Tax Return Frequently Asked Questions.

They make no mention of waiting to see the outcome
of this mess before we refile. I'm thinking it is
best to wait, but reading this could make one think twice.

http://www.irs.gov/businesses/small/article/0,,id=106484,00.html

explains so much.

http://www.reviewjournal.com/lvrj_home/2004/Jun-11-Fri-2004/business/24080790.html

sounds like they are going to find us anyway, we may as well file an ammended return :(

I have the claim form, but can't find where to send it. Anyone have an address?

If you mean the Proof of Claim form for the NADN bankruptcy, the address is on the form and also posted on the first page of this comments forum and on the bankruptcy court site (posted above) and is in the Overview letter I send to anyone who emails me (as posted above).

Voluntarily filing an amended return is always a good faith act and is usually viewed favorably by the IRS. Unfortunately, we don't have enough information to amend them and won't have until the NADN bankruptcy findings are in. We may have to account for money returned, and there are legitimate expenses associated with the products and services purchased from NADN that should be claimed, but the IRS seems to think NOTHING we spent on the malls or advetising them or anything we bought from NADN is deductible. That needs to be contested, and only a tax lawyer can give good advice on that issue. The same goes for money spent to purchase products and services from Oryan, so all I can say is, consult a tax lawyer or call the IRS (probably won't get a good answer since they are wrong 80% of the time according to polls that have been conducted). We are trying to get both a class action lawyer and a tax lawyer to represent us, but each of us must decide whether we want to amend now and reduce the risk of an audit or wait and contest any interest and penalties assesed in the future.

I would just like to say that since I am one of the people who received a questionaire from the IRS that it is very likely they will audit me, if not already doing so. I haven't heard back from them yet. I do not understand the IRS postion on not allowing any business expense deductions on any of our returns, or even allowing a deduction for the "theft" deduction. I can only appeal to all involved in this to please send a donation, even a small one, to help file the class action and find a very good tax attorney who can help us with the IRS. If everyone (100,000) people were to send in at least $10, that would be a cool million to pay the attorneys. I wonder how we can get the list of 100,000 that is being purported?

Anyway, my comments for today.

NG

When you fill out the claim form for the bankruptcy, should you include all monies paid since day one? I am assuming yes. I hope this isn't a stupid question but I've never felt more stupid in my life!

Also...when I filed my 2003 tax return June 15, I filed nothing pertaining to this business and ended up writing the IRS a check for $4,000. I was going to wait until we have some answers before I amend anything. Any comments?

Once we have attorneys representing us, they can file a motion with the court to obtain a complete list of NADN and Oryan Management et al clients.

The IRS "ruling" appears very narrow, aimed only at NADN-Oryan malls (and any other similar ones offering similar tax credits). We will let the lawyers present the case that we made good faith investments in what, until recently, were considered legitimate, revenue producing online shopping malls. Most of the stores you find in brick-and-mortar shopping centers also have an online site, so to make a blanket ruling that online or "virtual" shopping malls do not qualify as legitimate businesses is simply unfounded. Billions of dollars of products and services are sold on the internet by companies who have no brick-and-mortar stores, so I fail to see how the IRS can single out our malls for disallowing any business deductions.

Either the deductions are allowed, or Oryan will have to refund all monies collected from us for purchasing them, but that is for the lawyers to argue on our behalf.
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For those of you who wish to contribute to the "CLASS ACT LEGAL FUND", visit my website, click on the "Make a Donation" button, and follow the instructions. You can reach my site by clicking on my username, "Opaobie", below. You will receive a receipt for your donation. I don't know whether it is tax-deductible, but we will pose that question to the lawyers if and when we have them onboard. If we do not spend it all, whatever is left will be returned to the contributors pro rated based on the amount contributed.

Here is one finding that can be rebutted easily:

Q. Why would the promissory note not be treated as a valid means of payment?

A. The facts concerning the promissory note aspect of such promotions demonstrate that actual payment of the note is never intended. Purchasers are told

(1) another company will pay the note in exchange for advertising on the purchaser's website; (2) the note can be paid at a rate of $2.00 per click on the purchaser's website, encouraging the purchaser to repeatedly click on his own account (using his PIN number) to eventually full pay the note; (3) the note holder will later forgive the note; and (4) the note can be paid by making referrals to the promotion's marketer. As a result, there is no possibility that a purchaser will ever be required to pay the note and such note is considered to be invalid.

Rebuttal:
(1) The "facts" demonstrate no such thing. This finding is not valid because there is NO GUARANTEE that advertisers will pay a penney, and we learned that the only two "advertisers" used were frauds. The contract even states that if no advertisers are found, the mall owner is still responsible for paying off the note balance in the out years. Virtually ALL online websites are underwritten to some extent by advertisers; otherwise, they would have to charge a fee from visitors just to be able to pay their costs. Check the news websites if you don't believe me. Check ANY website. They are FILLED with banners and other ads. Many of them even use spyware to track visitors so they can send more ads to them. Ever looked at the cookies on your own computer after a day of "surfing"?

(2) This finding is not valid because only legitimate "hits" on the BANNER ADVERTISERS count toward credit, cookies and server-side tracking software software are used to track visitors to deny crediting the same visitor multiple hits as alleged, and the contract prohibits SPAMMing the site to collect "hits", buying bulk "visitors", and the very practices this finding alleges. The technology is not new or complicated; most sales processing companies, like LinkShare and HopLink and dozens of others use it to keep theives from stealing commissions on sales from the legitimate site owners. The $2.00 rate is not guaranteed, and an update from Oryan even said the rate will be much less for "new advertisers" -- if and when any are found. Even the "Keyword Gold" hit generator only "optimizes" search engines, and even if the search engine sends visitors to the main URL of the mall, unless a visitor clicks on a banner ad and visits that store, NO credits are generated.

(3) Oryan has stated in updates and in email correspondence to me (and probably to many of you) that they will expect full payment of the remaining promissory note balances at the time specified in the contract. They have even stated that due to DOJ injunctions, interest on the notes is not accruing and that "commissions" will now be paid to the mall owners. They also want to charge a "monthly fee" to host the mall sites. Where did the IRS get the idea that the note holder would simply "forgive the note"? If anything, Oryan is attempting to charge mall owners more money.

(4) The nearest to this finding is that both NADN and Oryan said they would assist mall owners in finding a buyer if the mall owner wishes to sell his mall, and they have a "Mall Partner" program to attract investors to help share the profits and the expenses. Since when are "referrals" and "finders fees" not considered legitimate? I know of a major corporation offering as much as $4,000 to its own employees for referring applicants in "critical job descriptions" if the company hires them.

...the more I read the IRS Q&A, the less respect I have for their intentions of "protecting the taxpayers". They are offering NO assistance to SCAM victims, they will most likely shift as much of the cost to mall owners as they can since NADN is bankrupt, and to add insult to injury and to frighten us, they are threatening to treat us like criminals.

It may be time to contact our Representatives and Senators and request an investigation and some help.

Ok, I think I have it figured out and am sending my claim to the Vickie Mullings address. For some reason, my claim form does not have an address on it. I printed it directly off the court's page, and it has the case number filled in already in PDF. Don't know why mine doesn't have the address. Also, has an amount been set for the class action fund?

Are you getting email alerts from Oryan at your mall for all or shopn2000 email account or somewhere else? I haven't received anything from them via email since last November.

Some help for you. There are two issues and two forms to consider. If you wish to file a Consumer Fraud complaint against NADN, fill out the Consumer Complaint form and send it to the Nevada Attorney General at the address below. If you wish to file a Proof of Claim form with the bankruptcy court as a creditor against NADN, use the Proof of Claim (POC) form and send it to the US Bankruptcy Court at the address below.
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Download both the Consumer Complaint form and the Bankruptcy Proof of Claim form in a zip file from this URL:
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There are several files in the zip file. A few are info files from the bankruptcy court. There are two versions of the Proof of Claim form. The "POC" form is the original that allowed you to select which chapter of the bankruptcy law applied. The Customer Claim form is the one with Chapt 7 and the NADN case number already listed, so that is the one you will want to submit.
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http://www.opaobie.com/download/legalforms.zip
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To file a Consumer Fraud Complaint against NADN, use the Consumer Complaint form in the zip file.
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Address to send Consumer Fraud complaint form:
State of Nevada
Office of the Attorney General
Bureau of Consumer Protection
555 E. Washington Avenue, Suite 3900
Las Vegas, Nevada 89101
(702) 486-3777
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Nevada AG website: http://ag.state.nv.us/
Their site is "under construction", so forms are not available from the links, and that is why I placed the Consumer Fraud complaint form in the zip file.
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If you have a claim against National Audit Defense Network (NADN), you can get a Proof of Claim (POC) claim form for the bankruptcy hearing from the court web site - under court info, forms, the form is General Form B10. You need to fill this out and submit it to the court. (I included it in the zip file mentioned above to save you time.)
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General Form - B10 - Nevada Proof of Claim
http://www.nvb.uscourts.gov/nvb/CourtInfo.nsf/7f77af8ebdbeff2288256448005e75b0/6c829378368c7aab88256d74006f9195?OpenDocument
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This is the link to the actual form (.pdf) to download and is included in the zip file referenced above:
http://www.nvb.uscourts.gov/nvb/CourtInfo.nsf/7f77af8ebdbeff2288256448005e75b0/6c829378368c7aab88256d74006f9195/$FILE/POCForm.pdf
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Send the Proof of Claim form for the NADN bankruptcy to the following address:
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U.S. Bankruptcy Court
333 Las Vegas Blvd., South
Las Vegas, NV 89101
702-388-6155
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You will need this info for the form to identify the case:
United States Bankruptcy Court
District of Nevada
NATIONAL AUDIT DEFENSE NETWORK
Case number: 03-17306
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The Court does not accept claims except by old fashion mail. You have 90 days from the first setting of the 341 meeting, which is July 8th, to get your claims into the court. You have more than enough time to submit your claims.
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More info about the case is posted on the Bankruptcy court website:
http://www.nvb.uscourts.gov/
...scroll down to NATIONAL AUDIT DEFENSE NETWORK and click on the "click here" for the latest.
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The Trustee for NADN is:
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William A. Leonard
5030 Pasadina Road
Suite B216
Las Vegas, NV 89118
phone (702) 262-9322
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MEETING OF CREDITORS
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Date: July 8, 2004
Time: 3:00 PM
Location: 333 Las Vegas Blvd South, Jury selection room
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A meeting of creditors is scheduled for the date, time and location listed in this Notice. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice.
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NADN provided tax return preparation and audit defense services.
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A number of tax returns have been completed and many are in the process of completion. The estate will not be releasing those tax returns in the immediate future. Negotiations are ongoing to provide a follow-up entity to complete those tax returns. Please check back regularly for a status on the return of those tax returns.
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No support is currently available for audit defense. You are advised to contact a tax attorney to assist you in an ongoing audit.
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Please do not contact the Bankruptcy Court, the Office of the United States Trustee, the Clerk's office or the Trustee regarding tax returns or audits.
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If you are not receiving periodic updates from Oryan "support", you may not be on their list or they may not have your correct email address. If you can't reach them via your backoffice, you might try emailing them at their support email address (look in old emails from the email address) or go to their website and look for contact info. http://www.oryanmanagement.com/

Afterthought --
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You might want to include a copy of the Consumer Fraud Complaint form with the bankruptcy Proof of Claim form as support documentation when you mail it to the bankruptcy court.
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No amount has been set for the legal fund. That won't be determined until we have a commitment from lawyers. Any amount is acceptable as a donation. We have not pressed for donations yet because they are not yet needed. We are just slowly collecting money in case we need it to pay any legal fees or filing fees. We are hoping to negotiate for a low up front payment with a small percent of the recovery going to the lawyers, but that is not yet decided either.

For those of you who have been advised by the IRS to consult a "tax expert", you might politely remind them, "THAT is how we got here".
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NADN's credentials at the time we first began this journey into oblivion were among the best, and they were among the "Who's Who" in Nevada and throughout the industry. Their ads appeared on some of the top radio and TV programs and in major publications. They were listed in phone books and in business journals. Look at the buildings they occupied and how many people they employed. Look at the national recognition and honors some of their leaders received. They were former IRS "experts". What better credentials could they have presented? Just as there was no way in advance to determine NADN was dishonest and untrustworthy, the next "tax experts" we consult may be just as unscrupulous in spite of impeccable credentials, and they could make a bad situation worse. Being a member of the "Chamber of Commerce" or listed with the "Better Business Bureau" apparently is no guarantee of honesty. We took all reasonable precautions to make sure we complied with all the tax laws. Most, if not all of us, were looking for a promising business venture with reasonable expectation of good return for our investment -- NOT A TAX SCAM! I'm still looking.
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Online "stores" are making $$Billions$$ -- ever hear of "Amazon.com"? Their warehouses are larger than most businesses' entire complexes, yet they are exclusively an "online shopping center". Almost every store you see in a shopping mall has an online extension. Online shopping is here to stay, and for the IRS to say these are not "legitimate businesses" flies in the face of fact. They may have a good case against the ShopN2000 and MallForAll sites based on what has recently come to light, but the concept meets all the guidelines of a legitimate business, and money invested in that form of business is just as legitimate as buying a franchise that goes broke. The "modifications" may not meet the ADA guidelines for tax credits, so if that is the case, we have a legitimate claim against both NADN and Oryan to pay the penalties and interest that may be due the IRS for having taken those credits. We also have a valid claim that the tax refunds resulting from taking those credits should come from NADN and Oryan. They "guaranteed" they met the ADA guidelines, NADN guaranteed our tax returns were in full compliance with all tax laws, so they should be forced to make good on those guarantees BEFORE they pay any other creditors. Fat chance.
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To punish us now for having done exactly what the IRS is now telling us to do, "consult tax experts" just because the "tax experts", formerly "experts" at the IRS, misled us, would be a travesty. NADN and Oryan took our money, "sold us the business", and guaranteed our tax returns would pass any audit. Any taxes owed on our parts should be paid from their assets, or those assets returned to us so we can pay them. Either way, the money should come from them, along with a full refund of our "downpayments" and voiding of the "promissory notes".
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We are all just waiting to file amended tax returns, but how do we amend them until we know the results of the bankruptcy hearing and the final decisions on the DOJ injunctions and the IRS rulings? At the very least, the interest and penalties should be suspended until we have the information to file correct amended tax returns, or we will be refiling them again and again and again as each decision comes down.
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...maybe the IRS should tell us who THEY consult to do their taxes.
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...how appropriate, "Foolish Heart" by Journey is playing on the radio.
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...maybe "Working on the Chain Gang" will come on in dedication to NADN and Oryan.

Opaobie,

I have a mall purchased in late 2003. I have not taken any deductions for the mall, nor have I received any comissions from the purchases I made myself. In my opinion the whole thing is a sham. You may be able to argue some legitimate aspects of the MAll, but the way the note is inflated and just the right amount for a good tax break can't be overlooked. I agree we entered in to this thing in good faith wanting to bring in extra income and the tax breaks were just "icing on the cake". I am having trouble understanding your position and the direction of a lawsuit. It seems as though from your post on 7-02 that you are trying to legitmize the promissary note. Why would you want to do this?I see two groups of people in this. Those of us who got in late and haven't taken any deductions, and those who have for one or more years. Those taking no deductions (myself) don't want the promissary notes to be legitimate debts. I agree with the IRS and DOJ position. Not only would we be out the money initially invested, but then to have to pay back a large note with interest, salt in the wound! Those who have taken deductions seem to be caught between wanting to legitimize the note (so they can legitimize there deductions with the IRS) and not wanting to pay the sham note back. I admit I want this to turn out in some way good for my situation. Help me understand what you are thinking. Your last post does clear up some of my concerns when you stated "a full refund of the downpayment and promissary notes". I do want to participate in a class action suit if it would go in a way taht would benefit all.

It is up to the courts and possibly the IRS to determine whether the promissory notes are legitimate and how (or whether) to report them on amended tax returns. None of the mall owners want the promissory notes hanging over us; we all want them voided. Sorry if I didn't make that clear. So far, the DOJ claims they are bogus, and we mall owners believe they are bogus and would not hold up if challenged in court, and that is part of our position in the lawsuit. Oryan would do well to voluntarily void them as an act of good faith. We didn't know it at the time we purchased the malls, but we now know the promissory note amounts were calculated to allow maximum tax credit for the modifications and were most likely part of the overall fraud conceived by NADN and Oryan. The IRS has already indicated they will not allow the ADA credits and doesn't seem to want to allow any expenses at all associated with the malls, but if that is their position, I belive I have posted a good argument with examples above in rebuttal. Either we are allowed to deduct the downpayments as legitimate business expenses, or they must be refunded. I further believe we should be able to get a full refund of the downpayments based on breach of contract because Oryan never fulfilled their obligations under the contract. No modifications were made that conform with the ADA guidelines, the malls did not track visits and sales properly to credit clickthroughs or commissions properly, so that alone is enough to prove breach of contract if not outright fraud. The potential to generate revenue is there in spite of what the IRS says; it is just the fraudulent implementation that was hidden from mall owners that makes them worthless to the owners. That is why we should be allowed to deduct the advertising and other expenses and should be able to sue Oryan for fraud and breach of contract. I hope I am making clear the difference between the IRS saying the online mall "concept" never was a legitimate business and my saying that the concept is proven by thousands of online businesses every day and that only the "implementation" by Oryan is flawed. It really muddies the water trying to determine whether the refunds should come from NADN, who collected the downpayments, or Oryan, who delivered the mall products and services. Each will try to claim the other should make the refund if the court says the downpayments must be refunded.
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So, to answer your question, the downpayments should be refunded if we cannot deduct them as expenses, and the promissory note balances should be dismissed. I believe every mall owner wants a full refund of all downpayments, no matter whether it is one, two, or more malls. I certainly do. The ADA tax credits will be disallowed when the appeals process by Oryan and NADN fails, and it will fail. If the downpayments are not refunded, we should be allowed to deduct them as legitimate business expenses. Any advertising money spent should be allowed just the same as advertising money for a venture that goes broke is allowed for brick and mortar investments. No matter how it is decided, this entire scenario puts many of us in a severe financial hardship. We can certainly defend ourselves against the claim that we were only looking for a "tax dodge" as insinuated by the IRS. They now tell us to "consult tax experts", but we are in this situation because we consulted tax experts in the beginning, paid for their advice, paid them for mall sites that were guranteed to "conform with the ADA guidelines for tax credits"; so we should be given some recourse for recovery to the state that existed before we acted on their advice. How the IRS will finally rule is hard to say, but most likely, they will try to disallow as much as possible. That is why we must file a proof of claim for every penney we paid NADN and file a lawsuit against Oryan for the downpayments and to dismiss the promissory note balances and possibly damages because of the financial harm caused to mall owners by Oryan's fraudulent actions. Whatever is decided in the bankruptcy hearing and concerning refunding downpayments and voiding the promissory notes will form the basis for amending tax returns. The results of each year affect the subsequent year, so for about 3 or 4 years for some people, we don't yet have a clear instruction for amending them. For that reason alone, any interest and penalties should be suspended.

Opaobie,

Thank you for making things more clear. I appreciate the effort you are making in all of this.

Tell you what I want. I want someone else to pay the IRS back the tax money the NADN got for me for fradulently doing my taxes after I get audited. Also make any obligations to those a--holes and Oryan go away. Im still ahead with the money I got back on taxes but not much at all. It would truly be a sad day to have get a home equity loan or sell my harley to pay back the IRS and still have these promisorry notes and even the cost of the hit generator I foolishly purchased in feb of 2003 all hanging over me. I might just go file for some bankruptsy protection myself and sell (temporarily) my toys to friends to hide for fractional pennies on the dollar.

I thought one guideline used by the IRS to determine whether an activity should be considered a business is that the activity must show income for three consecutive years within the first five years of the activity. Has anyone done this without including the clicks for the NADN sponsors? Has anyone gotten a 1099 directly from Oryan and not from G&L Eagle Enterprises? If it can be demostrated that some mall owners met the IRS guidelines for a small business then it would help to support our "legimate" business deductions minus the ADA credits and deduction. This would also support the position of deducting a "theft" loss or "business" loss due to the NADN bankruptcy. It doesn't seem practical that the IRS will excuse all of the fradulent deductions simply because we had good intentions of establishing a business. We should focus on minimizing the damage by showing that the malls are legimate businesses if that is possible. A main question asked by the DOJ was could NADN stay in business without the fradulent activity? Apparently, not. It seems Oryan is trying to do this. I know most of us wish we never got involved with this mess but it may be better to show that it is a legimate business with some bad deductions then not a business at all. If Oryan can get it's act together it may help us in this regard. The Linkshare company seems legit. It provides its services to other companies. There are over 200 merchants participating in the Mall program. These seem like positive points towards legitimizing it as a business.

When I did a search on yahoo for "virtual mall" I got 196,000 hits. Who will break the news to these folks that their virtual malls are not a business? Is the IRS kidding?

Q. I was told that purchase of the website entitled me to deduct certain amounts as business expenses on my tax return. Are these business expense deductions available, even if the credit is not?

A. Because virtual mall websites are not a valid business (i.e., have no economic substance), associated costs are not deductible under the Internal Revenue Code. In any event, the amounts paid could not be defended as "ordinary, necessary, or reasonable" business expenditures, as is required by statute for the deduction of business expenses.

Q. Can I deduct my website expenses as costs of producing income under Internal Revenue Code Section 212?

A. Because the facts detailed above demonstrate that such websites are not purchased with the realistic intent to produce income (i.e., purchased solely for tax purposes), the associate costs are not deductible under the Internal Revenue Code. In any event, the amounts paid could not be defended as "ordinary, necessary, or reasonable" expenditures, as is required by statute for the deduction of an individual’s income production expenses.

In order to be considered a business and not a hobby, it cannot continually show a loss for more than (I think it is 5 years). According to Oryan's records, every mall was producing income, but the income was being applied to the "promissory notes". In any case, officially, the malls do produce income -- as demonstrated by the issuing of 1099s and profit and loss entries on Oryan's balance sheet. The problem is, Oryan was keeping all the income and trying to write off expenses through a mixture of legitimate 1099s for sales and bogus 1099s for clickthroughs by pretending the income went to pay off the bogus promissory notes. Demonstrating that income was and can be produced from the malls is not the problem. Lawyers or the court or the IRS can force the various stores within the mall as well as LinkShare to produce records of sales created through either the Oryan affiliate ID or traced to the mall zipcodes, whichever way they track them.

The IRS cannot deny mall owners the same deductions they allow to other online businesses such as Amazon.com, eBay, Sears, et al, just because they say the malls "appear" to be ONLY fraudulent sites allegedly improperly modified for disabled access to get tax credits under the ADA. They are poorly designed and operated, but they are online malls, and sales can be and have been transacted through them even if credit for sales does not properly go to the mall owners. Many of us have a record of at least one sale logged in our backoffices. The IRS does not know what was in the mind of the mall owners when they chose to purchase the malls, in my case it was to generate revenue to supplement my income, so to say the only reason for purchasing a mall was to get the tax credit is patently false and should be rebutted.

Opaobie,
Have you gotten a 1099 from any entity other than G&L Eagle Enterprises?
Are you saying that you never received a commission check from your Mall business?

I'll have to check to see who issued it, probably G&L Eagle Enterprises, but I received a 1099 a few years ago for about $600 and called NADN about it. I believe they said it was for sponsor credits or a referral, they weren't certain, and I didn't follow up because at the time, I still trusted them. I did not receive a check, it was applied toward the "note balance". I remember being a bit miffed at having to show as income money I never received credited against a debt I owed to them, but that is history now. I will certainly delete it from my amended return for that year when I refile.

I show one sale ever in my backoffice, something from Perfumania for about $35. I have never received a check from NADN or Oryan for any commissions.

Regarding the business expenses---- Anyone who bought the mall paid about $2495 cash and a $7980 promissory note for each "disabled modification". With that we were supposed to get a business write off of about $5475 and a $5000 tax credit. And the chance to earn income from sales on website, which had a point of difference of allowing disabled access.
From feedback from the IRS and the Dept. of Justice (which indicated that disabled modifications weren't adequately made) it is now clear that the $5000 credit nor the $5475 -write off is not allowed. I believe the promissory note expense/future tax liability was factored into the $5475 [DOES ANYONE KNOW HOW THEY CAME UP WITH THE $5475; WAS THE NOTE WAS PART OF THE CALCULATION?; I BET IT WAS] With the write off and credit not allowed, the $7980 note should be voided by Orion IMMEDIATELY. We will all have to eventually ammend our returns to remove both this deduction and credit or if bought just in 2003 not include the credit or write off. That will be a financial hit for all of us. If you had taken credit in past look at that as a loan we got from the government that now has to be paid back. Orion would best serve their chance to remain in business by building trust among mall owners, empathizing with with the deceit and financial hardship we have and will face and cancel out all notes AS SOON AS POSSIBLE. Not for sympathy but because the mall doesn't have the disabled features and tax benefits it was sold to us as.
But the mall does have stores and can generate revenue. Orion has to work on making the mall more shoppable and have a meaningful consumer benefit/point of difference.
Regarding the $2495 cash investment and other related expenses (if you marketed the mall and had business expenses) I believe the IRS should allow that as a legitimate business expense if your intent was to treat as a business. We were told it was a business by an alleged reputable source (Opabobie you make good points about this earlier). I thought IRS gives you 3 years to turn a profit. If your intention was only to treat as a tax loophole, I don't believe you could then write off the $2495 nor other expenses.
ALSO, WHEN IS THE DEADLINE TO FILE FORM WITH BANKRUPTCY COURT FOR NADN- IS IT JULY 8 OR 90 DAYS FROM THEN? For reference, I bet there will be no money there for us; but worth a shot.

Let's say the $2,495 is viewed as a setup expense. Then you bought a hit generator for $2,000 that didn't generator any sales but now Oryan has straightened out the problem with Malls being properly credited and you purchased another online marketing tool that brought hits to your Mall that were converted into legitimate sales generating legitimate income to you. Could the $2,495, $2,000, other marketing expenses and reasonable home-based business expenses be considered legitimate deductions? If you can show legitmate income from this point forward I think any actual expenses paid (i.e. $2,495, hit generator, etc.) in the past would be allowed minus the ADA tax credit and deduction. I understood the initial ADA compliancy modification but I did not understand the "modifications" made in subsequent years. It would be like making the entrance into your business ADA compliant but year 1 you did the ramp, year 2 you did the automatic door opener, year 3 you did the railing, etc. Wouldn't it have made sense to make all of the mods in year 1 with the original setup? My main point is that paying back the tax credit and related deductions is bad enough but if all mall related expenses were denied it would be allot worse.

I got a package today in the mail from the Bankruptcy court. Long story short, not much different from what you already know except they changed rooms for the hearing on July 8, deadline to file a POC is still October 6, 2004, and to save having to notify 4500 people anytime something happens, they want you to look for updates on the bankruptcy court website (posted several times above).

Anyone who purchased a mall, no matter what the reason, should be able to claim the same deductions for running an online business as those who spent thousands advertising it. Thousands of people invest in businesses and never even visit them; they leave the running of the business up to the experts whom they hired or contracted with to do the day to day operations and advertising. The IRS should not deny the deductions to those who did not spend a penney advertising. As I said above, they have no way to know why a person invested in the malls; all that matters is that they DID invest.

From what I read from the DOJ report, there was only one mall, clients were never sold their own mall, clients never had a mall, just a PIN pointing to the one mall. What is the story behind that?

As long as each "site" has its own unique URL and both visit credits and sales commissions can be tracked and paid to the "site" owner, it is no different from any other "affiliate" business. Many MLM companies do the same thing. They create a core site, build a "gateway" page that does the unique affiliate tracking, and all sales come from the core site. The technology is not new, it is very stable, it has high security for protecting credit card numbers during sales, but the problem with the way Oryan implemented it was, theirs was flawed -- possibly intentionally so clickthrough credits would not be credited and sales commissions would not be paid to the proper "mall" owners. In my case, NADN supplied a bogus URL to Keyword Gold so when visitors clicked on that URL, an error message appeared saying that was an invalid "mall" and then redirected them to the NADN/Oryan default mall, thus stealing my visitors and any sales commissions I was due.

If Oryan had implemented ADA modifications properly, even the gateway method would have qualified. They were either too incompetent or too crooked to do it right.

If you have not yet joined our Class Act Legal Cooperative, I urge you to join immediately. There is no obligation, and you will be kept informed of the latest developments in our class action lawsuit preparation. We may be asking for contributions to the legal fund in the very near future as legal papers are filed in court, so if you would like to help us help you get your money back, click on my username, go to my site, click on the "Contact Us" button, and join our group. If you wish to donate to the legal fund, click on the "Make a Donation" button.

Legal fees associated with a business may be tax deductible, but I cannot promise that these donations qualify. We will ask the lawyers in our next conversation. In any event, consider donating any amount you wish. A few dollars from thousands of people can build a substantial legal fund. Money not spent will be returned. You will receive a receipt for your contribution.

Ben Dover,

The "zipcodes" were mostly a verbal marketing tool used and presented by the reseller as those "limited but available" and "cleared by the government for the ADA tax credit" (boy what hind sight does for that!). Many, if not all, received a demographic write up about their zipcode from Oryan. One of Oryan's FAQ's had it this way:

"Zip Codes are subject to availability. Only one client can have the MallForAll.com store for a specific zip code. Zipcodes are used as a PIN for Marketing purposes, directing Shoppers to your Web Mall, and for tracking commissions due to you. Zipcodes are automatically assigned to new mall owners if your 1st and 2nd choice is not available."

This passage was cleverly worded, probably to address & cover for things that were arising with Frequently Asked Questions from owners. Where else? I know that when I started having questions, I couldn't find a list of government authorized zipcodes for the ADA credit online and didn't bite on the second "modification".

Notice how they use "store" and not "website" as in the contract. They say that "Zipcodes are used as a PIN", nothing about PIN's in the contract. (Aside: To be correct, strictly from a PIN standpoint, it sould read "PIN's are used as zipcodes for marketing purposes". The intentions are obvious, to do so would have taken away that sales hook of claiming zipcodes were "cleared" by the government or otherwise limited.)

Out of curriosity were you, or anyone reading this, ever sent a form requesting your 1st and 2nd zipcode choice? The ones I would have chosen are very available.

My credit card company, after nemerous attempts, finally put my $6000 charge against NADN in dispute at the beginning of MAY after 120 days of the inital charge. Yesterday I got a letter stating it has been removed from dispute status and is now a credit! I am still in disbelief. The only downside is that the merchant bank of NADN will have the opportunity to review the case and will be in contact with NADN, and if they can prove its a legitimate charge it could be reversed. Is this possible since NADN is out of business? If I hear nothing within 90 days of July1, the credit will be permanent. I'm praying that this credit will hold up. Any thoughts on this are appreciated.

Opaobie,
If the current site is using the "gateway" method and Oryan met all of the IRS/ADA guidelines, I could see an issue with each mall owner getting the ADA tax credit and deduction. It's like a physical shopping mall making its main entrance to the mall ADA compliant and all of the individual inside stores each getting the full ADA tax benefits. Does Oryan provide customized web pages for each mall owner? If the same webpages are used by each mall owner but traffic is separated by PIN number then it seems that the ADA tax benefit would only count once for the "core" site. If there are a set of unique webpages for each mall owner then maybe that could be considered as separate websites qualifying for separate ADA tax benefits.

AUDIT??? I joined NADN in 2001 for "audit defense" insurance. I never had them do my taxes and I didn't participate in the Shopn2000 or Mall for All programs. It now appears the IRS has a list of all past NADN members. I haven't renewed my membership since 2001, but I just received the bankruptcy notice yesterday, so I guess I'm still in NADN's database. Does anyone know if the IRS is going to audit all 640,000 NADN members in their database, or is the focus on the ADA scam? Anyone in a similar situation as me???

I was poking around looking for those FAQ's that I'll Drive posted and found this statement for the Question "Is it Legal?"...

"Yes. We have presented this tax plan to tax attorneys who have rendered their opinion that this tax plan is legal. Recent court rulings as well as newsletters from the IRS further support this tax plan’s basis."

It is time for Oryan to come up with the Tax Attorneys names and provide those written renderings. They've got some explaining to do. They haven't sited those Court rulings or IRS newsletters to during this shake down either. Those are public documents, and revealing them should have nothing to do with Oryans legal position on this matter.

Hey Getting Even Guy,
Before this whole mess started I sent emails to support and Trey at Oryan asking for those "court rulings". I got no response from the emails. I called and spoke to Trey about this. He said that wasn't his area of expertise. He said I would have to call the operator and have her direct me to the appropriate person. When I did that I was told to leave my name and number and someone would get back to me. No one ever did.
P.S. I got the notice from Bankruptcy Court. Besides the stuff we already know it said that the "Trustee lacks funds in the Chapter 7 estate to pay priority wage claims incurred but unpaid during the Chapter 11 case prior to conversion to Chapter 7". NADN was in Chapter 11 for almost a year. Allot of debt pertaining to employee wages probably accumulated during this time. It doesn't look hopeful that any of us will see any type of refund from the Bankruptcy. Everyone should file a claim anyway so that you have documentation to support a business loss or theft loss claim on your taxes.
P.P.S. Does anyone know if the salespeople can be personally liable for this mess. They had to know what was going down. Could the Class Action attorney subpoena the employee records for people like Chris Cotner, Mark Bausch and Dan Goodman among others and name them separately in the lawsuit. This would make them think twice before engaging in similar activity.

To "I'll Drive"- I was never given a zip code choice. Last Fall, however, Orion contacted me to tell me that malls purchased in 2003 were going to be given "pin" numbers and not zipcodes.
To Vinnie- You may be very lucky. Wish I had paid with a credit card; I was never told that was an option.
To " "(posted 8:22)- When sold the mall I was told it could be customized but then never received documentation on how to do. e.g., I could have stores that may appeal to demographic composition of zipcode highlighted somehow.

How is that Oryan is said to be worth $millions$ if no mall owners are making sales and collecting commissions. Is their worth just from the fraudulent sales?

Linda, I'm certain Oryan's/NADN's worth was based on fraudulent sales. They took advantage of our trust. The rep I dealt with basically told me "hey, you're the one who hired us, right? We're in business to save you money. We're your tax advisors and this is what we advise..." At one time I truly felt they were working FOR me and providing legitimate tax advice. Didn't we all? Now, I'm not certain what to do. I guess I'm still bitter and somewhat in shock. I've been under-employed since February and the last thing I need is an audit. Don't see how I can afford to pay a tax attorney to try to fix this mess, but don't see how I CAN'T afford to pay one either.

Quoth:
Our primary defendant in the class action lawsuit is Oryan -- and all of their partners still standing --, and they have not filed for bankruptcy protection. They do have million$$$ in assets

As a former employee I can say this much, HAH...tho I'm a pessimist, if you sue them and win, good luck recovering anything. While I belive that you are in the right, I think that ultimately there isn't much hope at Oryan for a full recovery.

Pessimists, stand back and watch. Just a reminder: trying to divest assets or hide them to avoid creditors and then filing for bankruptcy is a crime, and it is also futile. The court will simply reverse those divestitures and prosecute the offenders.
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After tomorrow's conference with the lawyers, I hope to have good news. In any case, I will post the results.
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Remember there are three kinds of people:

1. Those who watch what happens.
2. Those who wonder what happened.
3. Those who make things happen.
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....pick a number.

4. Those who have things happen to them.

If there are any assests left, it's doubtful any us will receive anything. The IRS is first in line (to the tune of 1.3 million if memory serves correctly). Remember when K-mart went belly-up? Enron? WorldCom? The investors got nada. Hope I'm wrong, but the little guy rarely recovers money.

Thanks Opaobie for this web site and all you've done so far. I just sent in a contribution and hope that everbody will do the same. We need to stick together. There is strength in numbers.

It's not that I don't think you won't recover anything from filing suit in Oryan. It's just that there isn't anything to recover. As the same former employee, I'd say they're worth 6 digits at best...possibly a low 7 back in their prime. They have little solid assets, making liquidation not worth much more than what's in their accounts. That gives everyone pennies to recover at best...though good luck :-).

A photo of some of the former executives at NADN doing the perp walk would be nice.

The knowledge that we put criminals out of business -- maybe in jail -- never to do this to anyone else and being allowed to deduct every penney we lost to them makes this effort worthwhile by itself. If we don't sue them, they walk with whatever they have and are free to prey on others.
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...call it our civic duty.
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I am happy to do my part, but the "Thanks" should go to Chris Tulino for opening up this forum to allow us to join forces. Without it, we would all be uninformed and tilting at windmills by ourselves.
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The more I thought about the IRS folks saying "online malls" were not legitimate businesses, the more determined I became to prove them wrong...and I have. I have been working with one of the most successful online marketing teams in the world to set up a simple example site that works. Actually, we have set up two different versions. They even publish a newsletter read by some of the top leaders in the industry.

I received an email today from them with a simple method to allow the IRS or anyone else to see what a real online mall looks like. It even uses clickthroughs -- PROPERLY -- to help pay for itself AND to pay the site owner. It does not offer ADA tax credits, but income produced from it is taxed just like any other income, so the IRS should love that. It is free to operate, but I can spend money advertising it if I want, and that expense is tax deductible.

I have it placed prominently on my website. All sales are tracked -- PROPERLY -- by ClickBank, one of the industry's most trusted and secure companies. If you want to participate and demonstrate to the IRS that anyone CAN operate an online mall that is legitimate, just click on the "ClickBank Mall" banner on my website
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..(click on my username below to reach my website)
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and look it over. There is a link to create your own site if you want to. You can even operate this business without owning a website to place the ads and links the way I have. Just send them in emails.

I am NOT trying to sign anyone up for anything -- the whole thing is FREE anyway. I am just making a public demonstration that online malls are legitimate and available to anyone for producing revenue.

Sure these virtual malls might turn into a real business. That was supposed to be the starting point, not the goal.

I think that everyone took the "ForAll" part of MallForAll as the major marketing point due to the unique niche that it was supposed to serve with that which should have been ADA compliant. Without that part of the package you have LEFTOVERS, and not the main meal.

This was supposed to be targeted for use by the impaired, they were supposed to be our main customers. Even the main mall that Oryan established was confusing to the unfamiliar at best, but the impaired section was obviously a nightmare for even the unimpaired to try to shop at.
So look at the marketability of the main mall without the ADA section. The site is incomplete and confusing. Search features are limited and convoluted. Searches often lead to out dated or bad information. Redirects continue to take you away. There is no security. Who would waste their time shopping at the site.

When most people pull out thier credit card for online shopping they want security. This is and has been a major obstacle with the Mall. Security should have been there from day 1. With the problems that Oryan created by not making this ADA compliant and their other monkeyshines that has invited complaint about the Mall, anyone who does a search for security purposes finds the DOJ action and similar information. Need I say more, you can't effectively operate this under these circumstances. It's like surfacing a submarine without air to blow the ballasts.

Opaobie,
I do thank you, Chris Tulino and the others for helping to resolve this matter in the best way possible for all of us who have been affected. However, the fact that you were able to "duplicate" a large part of what we "purchased" from Oryan for "free" raises the issue of how of the money we ""paid" to NADN/Oryan would be considered reasonable. One of the things that I have tried to do, without much success so far, is to get estimates from other web developers for the type of service Oryan is suppose to provide to us. For instance, most of us paid about $2,495 as a "down payment" on the note. Assuming the notes are voided and this money can be viewed as a setup cost, how of this money would be allowed by the IRS as a deduction since you just showed you could do it for "free"?

Good questions with a simple answer: It is FREE to the mall owner ONLY if set up correctly such as with clickthroughs that actually pay, commissions that are actually paid, AND, if there is no monthly bill or upkeep fee to pay such as for hosting, etc. ADA compliant modifications would cost extra, and could be very expensive if they were set up for each merchant in the mall. Adding additional modifications or capabilities each year would cost money, and that is what we thought Oryan was doing, so we didn't challenge them as strongly as we should have.
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A much more efficient but not cheap method would be to build an entry page that worked like a translator. Then, each time you visited a store in the mall, that store's site would be loaded into the translator, and all of the ADA features would work for that store. It should have the capability to handle multiple stores at a time, so that would merely add to the bandwidth and require larger servers. It could be done for each separate mall or for the core site with gateway pages between the translator and the core site.
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Oryan simply didn't do any of this correctly. Now as they scramble to meet the legal requirements to fight the label put on them by the DOJ, they are asking mall owners to pay for hosting. It proves only they were unprepared for the contingency of not having any ad sponsors and are not trying to cover their monthly costs.
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Oryan's claim was that all of that was covered by the downpayment and the banner ad sponsors plus commissions from sales. The CONCEPT is sound, but it still has to generate revenue to pay for itself or charge the mall owner just like renting a building and setting up a storefront and paying the electric bill, the water bill, etc.

...I meant to say Oryan is NOW trying to cover their monthly costs, but they could also just be trying to get as much additional money as they can from mall owners by charging a monthly fee before they are shut down or file for bankruptcy protection.
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As far as how much of the downpayment we should be able to claim -- assuming the notes are voided --, every penney. If you hire a contractor to build you a store and it goes broke, how much of the cost should you be allowed to deduct even if you later find out he overcharged you? Did you pay him that much? You may have overpaid him, but you still paid him the full amount.
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There are limits set by the IRS for amounts and percentages for deductions, but look at the outrageous claims for donating your underwear to the Salvation Army some people got away with, and look at some of the other allowables for meals, "art" donated to the local art museum, etc., so the question of how to claim it and how much is allowed by the IRS since fraud is alleged may depend on some court rulings. Hopefully, we will know more later today.

I just want to say thanks to Chris, Opaobie, Bev and all of you who have done so much to bring all these issues to a head. The Court in Nevada is meeting this afternoon. My assumption is not much will be accomplished today. There may however be some rulings regarding the tax documents NADN is still holding in storage (that would be nice) so look for a new posting soon.

Meanwhile all of us need to stick together. There is a long road ahead "with many a winding turn" and we will need patience as we move forward. We will be fighting the IRS mentality that we somehow participated willing in tyhe NADN and Oryan scam and we will be fighting NADN, Oryan and the others to try to recover some of our financial losses. I find it fascinating that Oryan thinks they were somehow exempt from inclusion in this scam. The fact that they keep telling us the websites are viable shows how callous and smug they are.

Maybe the picture isn't so bleak however. The chairman for Enron Corporation was arested and indicted today (so keep the faith everyone). I personally think all these "darlings" should spend time there. I chose the word darling because it was less offensive than the one that originally came to mind.

As for me, I've decided that this issue goes far beyond the money I may have lost. It goes to my integrity as a person. I bought into this scam with every intention of running a profitable and legitimate on-line business. I'm sure you did too. How dare anyone say or believe otherwise! For the IRS to even suggest this shows me that their mentality hasn't changed at all. They still believe the American Tax Payer is "crooked" and somehow always looking for ways to defraud the Government. Meanwhile we pay taxes on just about everything (food clothing, gasoline, luxries etc. etc. etc.) and we get to claim very little back at the end.

Perhaps we American Tax Payers should all get together and force our politicians to enact a flat rate tax based on income levels and get rid of the IRS and all of the voluminous Tax Codes that were created and which no one, not even the IRS, understands anyway. Just think, a well-enacted flat tax would also end the loopholes through which large corporations and wealthy individuals hide their money in offshore ventures and in other countries as well? You'd pay taxes based on all the revenues you earned (Period).

"Imagine"? Just imagine: no more paper, no more filing, no more potential or actual "fraud", no more IRS accountants? "Imagine" (John Lennon)?

I'm rambling but this is a forum, so I thought I'd share my thoughts with you.

Again, my thanks to all of you who are keeping this battle going wherever this takes us.

I just found a letter sent to me in Sept 2002 from Oryan congratulating me on the success of my business and my election to extend my website to be accessible to the speach and hearing impaired. Two points I want to make:
1) The letter stated that "Advantage Marketing" would be modifying my website with the new disabled features. It would be ready in 30 days. Does anyone know who "Advantage Marketing" is? Are they still in business?
2) The letter was signed by "Wes Coolidge, President of Oryan". Is he the same as Weston Coolidge the President of NADN??????

Opaobie, I've tried to access your site but no luck! I'm up for the fight too, I've only been with the NADN since last July and to read that they were in chapter 11 then and no mention was made of this ticks me off even more. I'm lucky enough not to gotten to far involved and they didn't get a chance to do my taxes.(but still out $3600) I talked with the IRS yesterday and explained what has happened and they worked with me, giving me till 1 Aug. to send my taxes in. I guess it's better than them come looking for me.

RMarie,
The letter you reference from Oryan signed "Wes Coolidge, President of Oryan" sounds like it is a significant piece of documentation that you should keep in a safe place and send a copy to the DOJ people. Hear is their contact information:
Address/info:

Evan J. Davis & Phyllis Jo Gervasio
U.S. Department of Justice
Evan.J.Davis@USDOJ.gov
Phyllis.Jo.Gervasio@USDOJ.gov
Tel: (202) 514-0079
Tel: (202) 514-6539

Our mailing address is:

U.S. Department of Justice, Tax Division
P.O. Box 7238
Washington, D.C. 20044

RMarie,
You should get a copy of that letter to Opaobie so that he could show it to the Class Action attorney. I think the attorney would find that letter very interesting.

My website was down earlier for maintenance -- seems like it is getting a lot of hits. Thank you all for visiting. It was back online when I checked just a few minutes ago.
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In addition to compiling all of the documentation you received from NADN and Oryan and any of their other partners or third parties such as "Keyword Gold" and "Tax Ready", I urge each of you to fill out the questionaire created by the DOJ folks. I include the questions in my "Overview" letter, so if you don't have them, either retrace the posts on this and the previous page to see where they are posted, or contact me through my site and ask for another copy. You can send them to the DOJ if you wish, but our lawyers will need a copy, so at the time you are contacted and asked for documentation, please be ready to send them copies of your documentation -- NOT YOUR ORIGINALS -- and the questions and answers from the DOJ questionaire. Any unique letters such as the one RMarie mentioned would be very helpful.

Opaobie, you're correct. I needed to thank Chris for this forum. THANKS CHRIS. Anyway, what responsibility does the IRS have for allowing NADN and Oryan to scam so many people for so long. It appears that they were receiving thousands of returns for several years and let it continue. Why didn't they step in and put a stop to this sooner? I'm not a tax accountant and relied on NADN to prepare my taxes according to the law.

As you begin to gather your documentation, you should make two types of packages: one dealing only with NADN, Oryan, et al for the purposes of prosecuting the lawsuit, and one to be used in amending your taxes. EVERYTHING dealing with the malls or NADN or Oryan et al (even email) except your actual tax returns and documents like W-2s that have nothing to do with NADN or Oryan et al go in the first package. 1099s and income from commission checks for "revenue" from your mall would go in this package. Your as-filed complete tax returns and all supporting documents go in the second one. Separate the tax package by tax years. Remember, make copies and do not send your originals.
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The reason for this separation is that the two issues need to be separated. Prosecuting the lawsuit may take some time, but refiling the amended tax returns or at least filing for an extension and a repayment schedule needs to be done soon. Hopefully, we will have legal directions soon on exactly how to proceed with refiling so as to reduce any penalties or interest (if not have them waived altogether due to extraordinary and extenuating circumstances).
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If you prefer to deal with the refiling of your amended taxes on your own, you need not prepare the second package for our lawyers, but you will need it for your own tax consultant. Most CPAs and tax consultants and the DOJ are saying not to include the 1099s as income, so that is between you and your tax consultant.

Reminder:

You can get a copy of the "Overview" letter by clicking on the "Class Act Legal Fund" link on the right side of my website. I will only add you to the contact list if you contact me either by email or by using the "Contact Us" button on my site. Click on "Opaobie" below to reach my site.

Has anyone received a notice from the IRS/DOJ yet? I haven't yet.

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Opaobie,
We can't be alone with the following idea. We were originally under the impression that the ADA modification included a program that ran in the background and was readable with software like that from IBM. The pointed to IBM software was originally advertised predominantly at the website. Not having such software, to see the Emperor's new clothes, is why we didn't initially question the operation or high cost of the modification. The assuption was that some sort of translator, like in your earlier post, was involved. Of course when we started asking questions and found things like the "Bobby" ADA Compiant analizer, that idea changed.

Opaobie -

How did the call go yesterday?

Gary makes an excellent point. Hopefully the IRS will understand it.
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The call went very well, and wheels are turning. In order not to tip our hand to Oryan, "Hi, Chris or whoever you really are", I won't post details, but I can report that we may soon have even more help from some high places as well as legal representation. The most difficult issue to resolve will be the tax mess, and we are working that issue very carefully. As soon as I have something significant, I will post it and contact the Class Act Legal Cooperative members. If you haven't joined us yet, please consider doing so.

Gary-I too questioned the disabled access component very hard before investing. I was told that the disabled symbols indicated access and that I couldn't really test it on my computer because the disabled people had special equipment that I didn't have.
Question- do the malls no longer have the disabled components we paid to have modified???
Also, has anyone heard from Oryan lately- I haven't seen any messages posted here lately with copies of emails people received from them.

In case you haven't been checking their site,...
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From the bankruptcy court site:
District of Nevada U.S.B.C.
National Audit Defense Network
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Subject:
3E. Virtual Mail Web Sites & Shopn2000
Last updated: 07/01/2004
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...they need to proofread -- it's "MALL", not "Mail"
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http://www.nvb.uscourts.gov/nvb/Documents.nsf/09e3860947325d9288256ea9005a5da4?OpenView
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The tax credit and deduction will be disallowed by the IRS and that the purported
"income" related to the promissory note will also be disregarded. See:
http://www.irs.gov/businesses/small/article/0,,id=106472,00.html
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this second link takes you to the IRS page regarding "Misuse of Disabled Access Credits"...
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...does "deduction" include downpayments and modification payments or any advertising or other expenses?...not clear, so just continue to monitor their site and these posts for updates. They have a good argument for denying the ADA tax credit, but NOT for denying the downpayments and modification payments and other expenses we paid to Oryan....I guess that's why there are lawyers and appeals processes.
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A ray of hope, or a lightning bolt from Heaven?
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Another "entity" has been working independent of our group to build a case of "IRS Complicity " or at the least, "Complacency and Failure to perform Oversight" in order to challenge denial of all deductions relating to the ADA credits, the mall down payments, the modification payments, and any other mall related deductions. I have no details to share, but they believe they have a strong case. I have been asked not to say anything about them beyond what I have posted here and that no one contact them; they will contact us if they need to. They read this Comment site, so that may be enough if we post what they need. They have asked one favor of us: please collect any information regarding the people who contacted you from NADN or Oryan or any of the third party companies. Any news articles or public stories about the founders or prominent figures with these companies are also sought. Glowing biographical stories, stories of what "pillars of the community" they were, and anything relating to their IRS background, etc., would be very useful. Bennington was considered almost a saint, according to many of the reports published about him. Several of them received public awards. These are the types of stories needed. Links to them would be acceptable as long as the links don't go dead before the information can be captured. Not tipping their hand, but they could use that information to place a lot of blame on the IRS itself using a legal term called "estoppel", a rule of evidence whereby a person is barred from denying the truth of a fact that has already been settled. In our case, that fact involves documented credentials that NADN "presented itself to the public" as former IRS employees, and the IRS never denied it, thus it is accepted as "truth".
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A case was won by an individual who checked into a hotel during a robbery. The robber assumed the identity of the desk clerk, whom he had tied up moments earlier, and actually checked the guest in. The guest gave him valuables to store in the safe and went to his room. The thief took the valuables along with the other loot and escaped. The guest successfully sued for the loss of the valuables using this rule because the court found the guest had every reason to believe the person checking him in was the legitimate employee of the hotel in whom he could entrust his valuables.
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Applying that rule to our case, evidence is being collected to argue that those who contacted us to sell us products and services for NADN presented verified credentials as former IRS tax experts, thus "representing" that their products and services were sanctioned by the IRS and that we could place our trust in them. That argument would be weak if the IRS had acted in a reasonable manner and within a reasonable time to stop or expose or refute their PUBLIC claims. Since they continued to make that claim PUBLICLY FOR YEARS with no denial by the IRS, clients had EVERY REASON TO BELIEVE that they were following the tax laws to the letter with the blessings of the IRS.
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The IRS had trained them in tax law and policy and never refuted their credentials; therefore, the IRS should be partially complicit since clients had EVERY REASON TO BELIEVE that the tax advice, tax preparation services, and the business venture that NADN offered represented the policies of the IRS. In the case I cited as precedence, it didn't matter that the hotel had no opportunity before the crime was committed to warn the guest or to deny that the person "representing" himself as a legitimate employee was even employed by the hotel. What mattered was that the guest had EVERY REASON TO BELIEVE that he was. This bodes even worse for the IRS because they had ample opportunity to deny NADN's PUBLIC claims. By taking NO action during the period NADN was preparing and filing fraudulent tax returns for clients and being accepted by the IRS, the IRS was not refuting the NADN claims of IRS credentials or of being in compliance with IRS rules and tax law; therefore, the IRS is partially complicit or grossly negligent or both. Four years is a long time for the IRS to sit idly by doing nothing to stop NADN from filing fraudulent tax returns or refute their public claims of IRS employment and compliance with all tax laws. At the very least, gross negligence on the part of the IRS oversight is apparent.

I was told that 4 outstanding, former IRS workers headed up NADN. The also used this information on the ad that I heard on the radio station about NADN. I really wish I could remember the 4 names.

I remember at least a one or two of the NADN "tax experts" who advised me to buy the mall business told me that they had bought it themselves. Whether or not that is true remains to be seen and these people haven't earned a lot of credibility.
Does anyone else reading this recall if the NADN sales person ever claimed that they had a mall too?
If this is true, this means that the people that lied to us are victims themselves??

Documents that arrived with my NADN welcome kit (about December 2000) provided very credible facts about NADN. It stated that NADN had nearly 1000 former IRS agents, CPAs, Tax Attorneys and enrolled agents from coast to coast. It specifically stated that their tax specialists included: a former IRS Deputy Commissioner, three former National Chiefs of the IRS Audit Division, a former Director of Practice for the US Treasury Dept, a former IRS Chief of Compliance, three former IRS District Directors and "far too many former IRS Senior Agents to list here".
* It also included a brochure stating NADN's Media experience in practically every major news program (CNN, CBS Washington, NBC National, Fox News, CNBC, Jim Lehrer, Capitol Watch, Alan Keyes and more), Radio (National Public Radio, Michael Reagan [there's a photo of Bob Bennington with Michael Reagan], G. Gordon Liddy, Chuck Harder, Janet Parhall and more) and Print (US News & World Report, Washington Times, Tampa Tribune)
* The welcome kit quoted George O'Leary, CEO Communications Resources "I was formerly a CPA with Peat Marwick Mitchell and Co;, and even with that, my relationship with NADN has saved me $150,000 this year." I THOUGHT IF A CPA BELONGED TO NADN IT MUST BE PRETTY COMPETANT.
* On one page of the welcome kit it said in bold green lettering: 'Never forget..When you're with NADN, you're safe from the IRS'. [WISH THEY HAD DELIVERED ON THAT PROMISE.]

Opaobie & RMarie,
Is it possible for RMarie to get her documents scanned into an electronic format (maybe an Office Max or Staples can do it for a nominal fee), email the electronic files to Chris or Opapbie to place on their website(s) as an attachement that others can download? Her documents are exactly what Opaobie says is needed by his "source". If others could see these documents it might provide them some hope that something could be done about bringing some justice to this matter for all us. It might motivate more people to join the class action lawsuit. On the ripoff report website a recent post was made by an attorney. Are there any attorneys among us who could provide legal assistance to the class action attorney?

I'm only guessing, but it seems that an argument such as the other folks appear to be preparing would be valid regardless of whether the malls ever met the ADA compliance or whether they ever were a viable business. Their argument seems to be based on gross failure of the IRS to perform their duties and protect taxpayers who faithfully followed the very instructions they now give to everyone who has contacted them trying to resolve our current problem: "seek the advice of tax experts before filing our returns". Remember, that's exactly how we got into this mess.
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By accepting the income tax returns without question for some three or four years, the IRS, in essence, assured taxpayers that their returns were correct and thus allowed NADN to continue and even expand its fraudulent practices, and that seems to constitute gross negligence on the part of the IRS. The IRS doesn't allow taxpayers to file inaccurate returns just because they are busy and don't have time to gather all the information needed, so an argument by the IRS that they had too high a workload to discover the errors in the returns shouldn't be accepted by an appeals panel either. If it hadn't been for people complaining and bringing the fraud to light, who knows how many more years it would have continued, and how many years worth of back taxes and penalties and interest we would be facing? It wouldn't surprise me to see a request for an investigation that could result in the firing of some IRS employees. Maybe we should contact our Representatives and Senators and ask them to look into our plight and initiate an investigation into the IRS. It couldn't hurt, but they are probably too busy eating $1000/plate rubber chickens trying to get reelected to bother investigating complaints from their constituents this year.
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Considering the fact that very crucial decisions affecting what is and is not deductible have not yet been made by the courts, as a minimum, the IRS should suspend any interest and penalties.
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I got a cynical email suggesting the whole situation was an IRS sting. They set up NADN with "former IRS experts" who then sold unsuspecting taxpayers on tax counseling and tax preparation and the malls. They ran the scam for three years to sink the hook deep, and then their buddies in the IRS are now "hauling in the catch". Pretty cynical, but it's as believable as anything else considering the situation we find ourselves in.

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Hey remember these:

http://64.233.167.104/search?q=cache:FdOY0JuhNhoJ:www.oryan-biz.com/Ashcroft.cfm%3Fp%3DDMI+Oryan-Biz&hl=en

http://64.233.167.104/search?q=cache:O0-mI4EPoAEJ:www.oryan-biz.com/President.cfm%3Fp%3DDMI+Oryan-Biz+++President+bush&hl=en

I don't think that a sting would go into those deep waters politically. Surely the hard sell tactics would be ruled entrapment.

Cool paranoid angle though, why did I not think of that. I love conspiracy theories. Like, maybe NADN & Oryan are subversive terrorist cells scamming hard earned American Bucks to secretly alter all Homeland Security Alerts to appear in only yellow, that's yellow, only yellow.

Seriously, in my mind, the DOJ & IRS are following these things in the way they are legally charged to do. The DOJ should protect the disabled against the crap that we were blindly brought into and at the same time protect us from the havoc that we've seen (we should not be twice a victim).The IRS needs to collect lawful taxes and we need to see that things are made whole in light of this entire mess, because "Right" should always be the trump card.

Look, tax credits are established all the time. Their purpose is to induce people to follow a certain path and ease the way toward a predetermined goal. Some of these credits are environmental, for example, they get the private sector to meet certain standards thereby maintaining ecologically sound operation and avoiding the more costly SUPERFUND and hind sight approach.
Education Credits are very well known, they pave the way for a more educated population to compete globally. The thought that people would send thier children to college just to get the tax credit is similar to the reasoning that you would buy an ADA-virtual mall strictly for the tax credit.
If you follow that to the ultimate conclusion then the IRS would investigate everyone who takes a tax credit, at all, starting with the largest corporate credits and working their way down.
Obviously the IRS is smarter than that. The DOJ has labeled this as a fraudulent tax scheme that NADN and others have sold. It was bought under false pretenses, making it a scam. I think that it is obvious to them that mall owners are innocents. What happened is not like someone who buys stolen articles or knock-offs from a person walking around on the street with no credentials. It is more like going into a reputable store front and buying displayed, priced, marketed items that turn out to be stolen or knock-offs.

Following the "I'll Drive" example, say I bought the stolen or knock-off item from a reputable store. I take it home. My house has a fire and the item is lost in the fire. When I claim it on my homeowners insurance, do I claim the price I paid, the "real" price, or some "reasonable" price in between? Besides the fraudulent claims by the IRS, it sounds like even if the IRS recognized the ADA tax credits and deductions for each mall owner (which doesn't sound like it will happen), the IRS is arguing that the amount of the $2,495 downpayment is overvalued. I think we should try to get price quotes from other "reputable" web developers for the type of services that Oryan was suppose to provide. I have been pursuing this idea but if anyone else has relatively easy access to this type of information it would be helpful to share it with us or at least get it to opaobie. This information would be helpful rebutting a challenge from the IRS with regards to our amended tax returns. We would be able to show that the expenses are "ordinary and reasonable". Maybe someone has access to surveys of web development and hosting costs.

I have spent several hours reviewing all the posts on this site yesterday and today. I, too, was taken in by NADN to the tune of 3 "malls", a $1500 "Business Plan" supposed to pay off my notes and start making $600 a month within 6 months, a $500 re-up of my gold membership, etc., etc.

Anyone who purchased an upgrade to ShopN2000 in 2002 should have a copy of that letter from Wes Coolidge - I do.

I have been in contact with the DOJ people putting the case together. Based on several phone conversations with me, they put together an 11-page "Declaration" from me about my experiences with NADN, Oryan, Success Matrix, IFG, and AGW. I think they are probably doing the same with anyone who contacted them or filled out their questionnaire.

One point on the IRS being complicit in the scam - when I submitted my 2002 tax return (prepared by me, not NADN), I claimed the ADA tax deduction/credit per NADN's instructions; but I wrote down the wrong form number on my 1040 for the tax credit. The IRS found a minor error in another schedule on my return and sent me an amended refund amount. I sent a letter back to them reclaiming the credit and explaining that I had inadvertantly written down the incorrect form number. They immediately refunded the additional amount resulting from that request.

Given this "extra attention" to my return/refund, why would I ever expect that they would now be denying the validity of the tax credit claims and wanting us to return any money we received as a result?

Opaobie, you are doing a wonderful job of keeping everyone posted and trying to get the lawsuit started.

Has anyone sent Chris's two website addresses containing these posts to the DOJ or the IRS? They could both learn a lot from them.

Babs,

Since you have had direct contact with the DOJ, could you please send them the links to these two pages? I would imagine anyone who has posted here would be happy to cooperate with them if they wish to contact us. Were they receptive to your story, and do they seem to be working as advocates for us or trying to prosecute us along with the REAL crooks the way the IRS now seems to want to do?

Hey Angry Guy,

The IRS routinely accepts overvalued things as business expense write offs. Like pro sports tickets or a $10 beer while you are there (Beer = rotten grainwater = overvalued). How about those $100+ a head business lunches. Hell that's about enough money to buy prepared food for one person for a week at Mickey D's. By the way why can't I get a McCaviar meal?
Of course the downpayment for what was delivered was high, but that is not what we contracted for. Does this mean that the IRS holds that if a party defaults on a contract that money paid to that party is not a legitimate business expense or loss for the payee? Do they not treat it as income to the defaulting party? God, I want a flat tax!!!!!!!
Instead of spending a lot of research time, why not just ask the IRS how much they paid for their Website and their Section 508 ADA modifications?

I have posted a synopsis of our situation on my website as a text link:
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Are you a victim of National Audit Defense Network?
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Click on the link on my website to read it. If you see errors in it, please let me know. Any suggestions for correction or improvement or just plain old criticism are welcome. We need to keep stiring the pot until we all get out of this stew.
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...no poster child for tax reform left behind.
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I'll Drive and Angry Guy have some interesting points. The IRS had to base the overvalued concept on something. The cost of Website developement must vary greatly. They must have considered the cost of their own Website. You would think that an individual would pay more for developmental services than a large organization like the IRS. It would be interesting to see their Website cost anyway. We've all seen business software for better than triple the cost of the ADA modification figure that we thought we were buying. That appeared to be proprietary programming and not off the shelf on top of that. Plus - we thought that a tax credit was covering almost 50% of it. Tax credits do tend to cause the price of things to become inflated as well. There were no red flags popping up to indicate the this appeared out of the ordinary at that time.
The main question in the beginning was "can I afford to make a run at this as business?" The leverage angle was weighed, the tax credit figured in, the Advertiser support noted with respect to the Promissary note, commission viability entertained. Looked like the only thing you needed to do was to add supplement to the traffic that was going to arrive through perported consumer web searches by the impaired.
What wasn't figured was that a scam is the work of magicians. You are looking at the hand they want you to look at. We did not knowingly buy tickets to a magic show we thought we were going to see Wayne Newton.
As far as this being a sting. I don't think so. There is to much documentation about people trying to make contact about tax and other operational questions that went unanswered by NADN or Oryan. It would be incumbent on the IRS to answer correctly for anyone trying to straighten out their taxes in relation to a business. Likewise if they purposely fudged tax filings on your behalf expecting you to know the tax code that you were paying a professional to handle, it would have to be entrapment. I don't think that this is allowable for the IRS to do.

M14224

I think that it's a tough call on the this overvalued thing. It is not like someone came up with the idea for the mall and the ADA modification and took it to a web designer. It was a package that Oryan came up with and they and others sold. In a way people were essentially buying something that has similarities to a franchise and the payment for the concept et al was built into the cost.
The argument will always be what people were lead to believe they were buying verses what they ended up with. You need to look no further than the definition of "scam" to understand why there seem to be two sides to this argument.
If you could have conceivably come up with idea for the website on your own, you would have incurred Tax Attorney's fees, the cost of writting a business plan, CPA input costs, LinkShare agreements w/ attorney review costs, and other R&D/overhead/attorney costs. This would be before you ever took it to a Website designer. When handed to the designer the required content would be to present "stores" in a marketable fashion, readable by all browsers, set up for realistic detection by search engines, interact and track sales/click throughs with LinkShare, provide statistical data, commisions & record keeping, show terms of use/security info and other disclaimers, provide a "Contact Us" email address, Link to ADA modification, modification w/ active program to make the site meet ADA guidelines, independently do what the main mall did w/ LinkShare/commissions/stats/Contact/Terms and so on.
Now all that does not include the "Support" that was supposed to come with the "package".
In my mind the IRS label of overvalued could only apply "if" people were completely aware of what they were buying. Who the heck would buy with that knowledge? It does not sound like everyone just woke up one morning and said to themselves, "I think I'll buy a scam today". These things were aggresively marketed (gee I missed the fact that commissions were built into the cost too). There was ample credability put forth by reputable Trade/News/Talk organizations(for NADN at least) in print, on line & on air.

There are two schools of thought concerning filing amended returns, and both present powerful arguments. I cannot tell you what the IRS will do if you wait, but if you file now and don't have the correct information, you will be refiling again. I plan to wait until I know what is deductible and what is not as well as what the bankruptcy court decides. I would like to hear back from the lawyers concerning the class action suit and the tax lawyers, too. At least one tax lawyer has suggested performing the preliminary calculations but NOT filing yet.
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I don't want to mislead anyone or give advice that leads to paying additional penalties or interest by delaying filing amended returns, but, honestly, I have not been notified by the IRS or any other agency to tell me I must amend them. They can only go back three years for audit purposes unless they charge the taxpayer with fraud, and then they can go back 6 years. To my knowledge, none of us has committed fraud -- WE were defrauded. Even if they notify me to amend my returns tomorrow, I would remind them that I do not have sufficient information to file a correct amended return and will not have enough information until a final determination is made regarding the ADA credits and deduction of any business expenses related to the malls and the products and services I purchased from NADN. Remember, Oryan is filing an appeal. That is one reason we are trying to get proper legal advice from tax lawyers.
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There is nothing stopping us from working on amended returns and simply eliminating the ADA credits and the promissory notes, deducting what we paid NADN for products and services and assuming we will get nothing back from NADN following the bankruptcy hearing, but still deducting any other business expenses and losses we incurred and then holding on to the returns for now. If you want some help, one of our group has offered to help. If you have a tax consultant, you might want to use him/her. If you would like to use some free software, I have a link on my website to the Tax Act 2003 software. I have used Tax Act for years, and it is very user-friendly. I have contacted 2nd Story Software, the parent company that created the software, to see if we can also get the software for years 2001 and 2002 and to verify that the software will compute amended returns. I know it will calculate returns if we simply start from scratch and fill in the information using the Q&A feature. I believe it imports from some other software as well (maybe Quicken). It will also automatically transfer in the previous year's data and results if you start with 2001 and progress to 2002 and then 2003, so once you start, you can proceed fairly easily. The version I have linked on my site is for tax year 2003. It will also create your 2003 return online and let you save it or print it, so feel free to try if you want. I normally purchase the inexpensive Deluxe version (about $20) which includes the state module and a free e-File, but I won't be filing; just doing the calculations. If the free version is unavailable or if you prefer to purchase the Deluxe edition, I will try to provide a link so that a portion of the purchase price goes into the Class Act Legal Fund. That helps us get cheaper software and also helps add to the fund. Just a suggestion, not an attempt to sell anything to you. I will let you know as soon as I hear from Tax Act.
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If you want some help from one of our group, contact me and I will put you in touch.

Dear America,

I would like to say sorry to
Robert Bennington
I.R.S.
The Public taxpayer
And everyone who signed up with NADN .
It is over now NADN is dead and so is the former owner! So just take it as a loss and always remeber NEVER NEVER MESS with The IRS!!!!

Trustee questions funds funneled to firms tied to NADN executives
By Kevin Rademacher

LAS VEGAS SUN

National Audit Defense Network paid more than $12 million to companies controlled by top executives and managers in the months before it sought bankruptcy protection and, ultimately, liquidation.

William Leonard, trustee for the failed Las Vegas company's estate, grilled two top executives on the financial dealings in a hearing last week. He said the volume and nature of the transactions were "absolutely unusual."

Weston Coolidge, NADN's president and owner, said the arrangements were in place when he bought the company in 2002 from Cort Christie and Robert Bennington.

Under the deal, employees would be paid a fixed salary and their associated companies would then receive additional compensation for work above normal expectations or additional consulting work.

"This is a style, a management tool, I inherited with the company," Coolidge said. "(The employees) were the source of the future of our company. They set up this structure to motivate them."

Coolidge and companies he controlled received $1.36 million during NADN's final 36 months of operation, Leonard said.

Coolidge also conceded that as the company began to falter that the deals could be difficult to explain. "There could be more than one way to interpret these payments."

Such transactions, Leonard said, allow money to be paid to employees, under the guise of the corporations, without proper tax filings.

"Businesses don't do this," he said.

Al Rodrigues, NADN's general manager, said the arrangements were handled by Coolidge. Leonard claimed that Rodrigues and companies controlled by him received $2.55 million in NADN's final 23 months.

The liquidation is the most recent chapter in a series of problems involving the company. In 2002 both the Federal Trade Commission and the Nevada attorney general's office sued NADN, alleging it failed to honor money-back guarantees.

Last summer, NADN's troubles mounted when it filed for bankruptcy protection. The largest creditor in the filing was the Internal Revenue Service, which had a $1.3 million claim against the company.

At that time, Coolidge blamed the bankruptcy filing not on the IRS claim but on a $1 million claim against the company by the Securities and Exchange Commission. He said the SEC's action was based on an investment NADN executives made in a company that later turned out to be running a Ponzi scheme.

The IRS took on the tax firm with an April court filing that sought a temporary restraining order against the company. Attorneys for the Department of Justice said NADN was engaged in running a tax scam and filing false federal income tax returns for customers, costing the government an estimated $324 million.

Last month, the Justice Department also filed court documents claiming that former executives and employees of the company were illegally using NADN's customer list and database "and are continuing to scam customers through other entities."

The filing claims that the new entities are contacting customers who purchased products from NADN and offering to support those products.

Thank you, Mark Bausch, for your sympathetic and encouraging words. I will be looking for your generous contribution to the "Class Act Legal Fund" (just click on the "Make a Donation" button on my website).

...click on my username below to access my site.
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Tax Act does have previous years software back to 1998 available at the link below.
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http://www.taxact.com/offers/taxact_both.asp?sc=0370040
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At the bottom of the page is a text link to "Personal Tax Products". If you click on that link, it takes you to another page of products. Scroll down just a little and look for "Previous Years TaxACT Products:" on the right side of the screen.
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Click on the link that says "Order Previous Year's TaxACT Products"
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Each year costs $12.95 and the state module is also $12.95. If you want to buy a copy and do your own returns, this software is very easy to use. The only good news about this is that tax preparation is still tax deductible.
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...if anyone buys software through these links and Tax Act credits us with a commission, it will go into the legal fund. As I said, I am not trying to sell anything, I am only trying to provide any help I can. I plan to amend my returns using the assumptions that I posted above but not send them in until I am sure I have all the data correct.
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Opaobie,
Don't be so quick to thank Mark Bausch, if it is really the Mark Bausch from NADN. He is just as bad as the rest of them including Weston Coolidge. As stated in the article supplied by Bev Dover, Mark Bausch like Dan Goodman and others setup their payment structure to get a salary as well as hide additional monies through a corporation. I understand now why Dan Goodman kept insisting that I don't use a credit card to make my payment because then I couldn't request a refund through my credit card company who has more clout than me with pursuing NADN for a refund. It's nice that "Mark Bausch" said he is sorry after getting "caught". He is probably emailing us from the Cayman Islands. If the article is true there must be a way to sue the salesmen like Mark Bausch for damages. He participated and benefited directly from the fraudulent activity. If the CEO of Enron can be indicted along with others then they should go after Mark Bausch, Dan Goodman and others. The reality is that there will be no money left from NADN or Oryan to compensate us. We can only hope that we can minimize our financial losses with the IRS but all available avenues should be used to pursue criminal and civil charges against the employees like Mark Bausch and Dan Goodman who conspired with other NADN employees to rip us off. Ironically, Mark Bausch should be able to pay the entire class action lawsuit fund with "our" money that he ripped off from us.

I agree with Angry Guy about Mark Bausch. This guy became a millionaire off of us. I find his posting to this list an insult. My only consolation is that the FTC/DOJ/IRS may go after him first before us. Keep up the fight! I hope his next post to this list is from the "BIG" house. He'll make allot of new friends there.

...you might want to read my "kind words" to Mark Bausch again. The large bulge on the left side of my face is my tongue in my cheek. :)>
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...the dripping sound you hear is sarcasm.
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Mr. Bausch,

Who the hell was messing with the IRS, we thought what you were doing for us was fully researched as legal and that you would back us up if you took us to a gray area with your Audit Defense. This has turned out to be more than you bouncing us up against the near gray. You pegged the needle on the black meter on us. The "SAFE HOUSE" you sold is falling. We prepaid for a rescue team but you are gone.
You obviously took us bungee jumping, you showed us a film about how it works, showed us the brand new cord and safety gear, showed us your staff of world-class pros with their assurance of its safety, took our money, drove us to the bridge, gave us the cord that was 6 feet to long and drove off as we were falling.
No we are not going to take it as a loss. We were screwed royally. It is sad that Robert Bennington is gone over this mess but the deal came from his side of the table. You were on that side of the table. We did not get the cards we were supposed to get and your side of the table knew it. You and your buddies walked away with our money. We've found out that you used a stacked deck to take our money and we want it back.
Is this a shallow apologee or are you defending taking our money?
If you realized the depth that your apologee must take in, then you would not be asking us to take it as a loss. Many of these people are now facing a financial ruin, but not because they gambled and lost. They put their money on a "SURE THING" based on your (guarenteed to be backed up) plans. Therefore they put up money that should not have been at risk.
There are marriages on the rocks, houses on the line, children being deprived and most likely contemplated suicides involved over what NADN/Oryan has done to us.
I'll give you some respect for showing up and speaking your mind, but your remorse needs to be much deeper, well beyond the attitude that we should just take this as a loss.

Wow! The pent up anger for NADN is evedent with comments on Mark Bausch's post. His post was probably done at his attorney's suggestion to point to in some future court setting. Remorseful, nice guy image is important in front of a judge.

Here is a link for the Bankruptcy Court that serves the town that Oryan resides at, Ontario, CA:
http://www.cacb.uscourts.gov/
I haven't found anything on that site with regards to Oryan but we should probably start doing an "Oryan Bankruptcy Filing Watch". Can anyone confirm that Oryan is actually appealing the IRS decision through legal channels or are they just stringing us along until the timing is right for them to file bankruptcy? One of must have access to the legal system through westlaw or lexis inorder to confirm that Oryan has an active appeal. It would be interesting to see their actual argument.

TAKE IT AS A LOSS...HA! Who does this guy think he is? I spoke with this Mark Bausch a-hole when dealing with NADN. He was going to stick with me and get me through the ropes of starting up with NADN and the mall for the first 6 months. After having a few problems with the mall, I called Mark asking what was up. He ASSURED me, everything was going as designed. Supposedly he too had 3 malls of his own, along with EVERY other NADN scumbag I spoke with. Are you just "taking the loss" with your so called malls now too Mark? How can this guy get on here and post? OR maybe it is just somebody being stupid and playing games.

Don't waste bandwidth on this troll claiming to be Mark Bausch. It's like wrestling with a pig in a mudhole: he loves it, and you just get filthy.
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The idea of following up on Oryan's progress is an excellent one. Please post any news you find.
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We all need to realize that this is a public forum where people can post anonysmously. There are pros and cons to that. We can't let it bother us whether it's the "real" Mark Bausch or an imposter. Recently I read a post from Rick St. John EA who worked at NADN in the Tax Hotline division. I found him sincere in the answers he gave me. Some of the Tax Prep people I spoke to said that they had a difficult time with actually preparing the taxes the way the salespeople sold it us. The main point is that everyone that reads this list will know that we are not just rolling over and "JUST TAKING IT AS A LOSS". Many of us are helped by just knowing they are not alone and are able to express their feelings. Hopefully the Bankruptcy Trustee will do the right by initiating a criminal and civil investigation that will include employees like Mark Bausch, Dan Goodman and others. It's amazing how they supported each others' lies. When you started to question what one salesperson told you then another one would tell you the same thing. You think that it is not possible that all of them are liars so you keep going along it.
P.S. Are creditor's meetings recorded? Is that information public? Can we get a copy of transcript between the Bankruptcy Trustee and the two top NADN executives?

United States Code
TITLE 18 - CRIMES AND CRIMINAL PROCEDURE
PART I - CRIMES
CHAPTER 96 - RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
...better know as the "RICO" Law.
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http://caselaw.lp.findlaw.com/casecode/uscodes/18/parts/i/chapters/96/toc.html
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...maybe NADN and Oryan folks should have studied this instead of how to cheat the tax laws.
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...there is probably a copy in the prison library.
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How important is it for each of us to file the POC Form and the Consumer Complaint Form with the DOJ? Does it add fuel for obtaining justice or incriminate us? It seems we are looked at as criminals by the IRS and not as innocent victims of fraud....just thinking aloud.

SRM,
I recommend that you at least file a POC form because I beleive that it will help you if you need to deduct some of your expenses as a business or theft loss. You may want to consult with a tax professional first (just not any ex-NADN employees - couldn't resist this one)

FYI, I don't want this to get out of hand but I received some third or fourth hand information of questionable reliability that Oryan has moved out. I am going to the local Post Office on the way home to see how to go about getting a forwarding address to see if that is true. Speculation is that the mail may have already been going to a mailbox anyway and not delivered to the actual street address. That is a common business thing.

If I remember one of Oryans emails, they requested that we contact them through support@oryanmanagement only. I've seen postings where people that use to be contactable by phone aren't. That would be consistant with phone calls being forwarded to only a handfull of people to keep up appearances for a palnned escape. Emails could be handled from anywhere. Don't take this as true but it needs to be explored or verified.
It has been over two weeks since Mall status #6 which said the new release would be the following week. Nothing said since about delays. More cover? I want what I paid for. If not I want my money back.

That's it! I'm on the next plane to Ontario, CA.
Whose with me?

Filing legal papers such as the Proof of Claim and the Consumer Fraud complaint against NADN and a class action lawsuit against Oryan help to protect your right to recovery. The IRS and the DOJ can easily obtain a list of everyone who ever dealt with NADN and Oryan. By coming forward, we have built a strong case that we are making every effort to resolve all the issues openly and cooperate with all levels of authority. Our concern now is for fair treatment as victims; not false guilt as law breakers.

I have been following the things that has been typed by all of you that have been scamed by NADN And Oryen.
But I just got a call tonight from CPR Bussiness Solutions. I have had them do some advertising for my web sights. I have three of them.
They are selling an Idea about Prepaid Legal that thay are selling also about a class action Law suit,And a way to make money with a websight that is different from the ones we have. Has any one else been contacted by these plople? The Guy that contacted me is Mark Haser. Is this another scam or what? He is going to fax me some infromation tomorrow. When I get more info I will post it.

For your information i terminated my employment with NADN when i heard of possible problems 7 months ago.
So thank you all for your time
Mark Bausch

Mr. Mark Bausch,
You are just as guilty as someone who terminated their employment with NADN seven weeks ago. The date you terminated your employment with NADN is irrelevant. You participated in and benefited from the fradulent activity. We may have lost some money but you deserve to go to jail. You personally have ruined many lives by your greed. We are finding out now that the trouble started within NADN long before seven months ago. You were part of that inner circle of crooked salespeople. Now you expect us to believe you knew nothing about what was going on. Put your money where mouth is and donate the money you ripped off from us to the class action lawsuit fund. Otherwise stay off the list. The last thing we need is your condescending bull@$%!.

These two links are articles from the year 2000 around the time Shop2000 was starting to take off. The articles discuss cost estimates to make the goverment websites compliant. Thought you might find it helpful.

http://www.fcw.com/fcw/articles/2000/1218/web-access2-12-22-00.asp

"Buying new software to meet the accessibility standards has been estimated at as much as $510 million a year. Buying hardware that meets the standards is expected to cost $337 million."

http://www.wtonline.com/news/15_3/workplace/1292-1.html

"Fueling this concern is the uncertainty regarding the scope of the new law and the eventual cost to build and maintain compliant Web sites. Federal agencies could spend anywhere between $85 million and $691 million to comply, according to an economic assessment report from the U.S. Architectural and Transportation Barriers Compliance Board.
These directives apply to Web sites and online applications created after the Aug. 7 deadline, but not to existing sites. However, it is unclear whether the law eventually will require government agencies to retrofit existing Web sites, a move that could cost agencies almost $700 million, according to one estimate.

Per my earlier post...The US Postal cannot provide the required information. The best they might do is give forwarding information if you request it on the face of an envelope to be delivered. If it hits a local mail box at the proper zipcode, it is esentially not forwarded. That is that.

Mark Bausch,
You've come this far. The bouncers are not the welcoming commitee but this is a hostile place for those flying the NADN flag. If you bailed because you though things were wrong, you are right. I'm not ready to vote you off the Island because you are an unlikely ally. What do you have?

CPR are former employees of NADN these guys took Nadn's client list of mall for all owners and try to sell a prgram that is crap i payed them 4000 for 1,000,000 hits to my website and i got nothing no sales it is all crap . By the way Mark Bausch sold me a mallforall site also.

Hey Opa,

I got on the tax prep site you have on your website and did my 2003 taxes without taking any deductions dealing with NADN. I was pleased to see that I still have a refund coming! Small but at least I won't have to pay anything in for 2003 because of the bogus advice I got from the NADN JERKS. I am going to submit what I have for 2003 and take the wait and see position. I can always ammend my return later if it is decided by the DOJ, IRS that the deductions and business expenses can be taken after all. Thanks for your help!! I am having difficulty finding a tax prep firm that will ammend my 2001, 2002 returns. I think this whole NADN bankruptcy thing has everyone around here spooked. Can someone advise me on this?

Joel (and everybody),
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I have added a direct link to the Tax Act previous years software page on my website. Unfortunately, previous years' software modules are not free, but it is only $12.95 for the Federal and $12.95 for the state module for each year. You would only have to buy the 2001 and 2002 software because the 2003 year is on my website, and you can still use the online or downloadable version free (it is the one with the banner). You can try using that method if you want. The software will even calculate the form 1040X for amended returns. If Tax Act allows any commissions for buying through that link, it will go directly into the legal fund. Also, tax preparation costs are tax deductible.
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One thing to keep in mind: Each previous year will affect the following years, especially the state taxes, since most states have you include your federal refund as income for the following year. If you start back at 2001 (or whatever year your first amended return is for), you can work forward to 2003. That is the biggest bummer about this whole mess because you have to do this three times with three consecutive years. The software does import the previous year info for you, so once you set up 2001, all you have to do from that point on is run 2001 (including the state if your state has an income tax), save the return (print a copy, too), then uninstall that version of Tax Act and install the next year and repeat until you finish 2003.
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That is the way I will be doing it when I have some free time, but my day job as a Rocket Scientist keeps me pretty busy right now.
...

...I think I said that wrong...the FEDERAL has you include the STATE refund as income...it has been a long day, and anyway, the software knows how to do it right even if I don't...

Whats wrong with THIS picture?
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The IRS wants to deny us any deductions for the malls, etc., because they are "over valued", but the court and the Trustee think $100 is a "reasonable fee" to get our own documents back.
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Let's see, we sent private financial data to NADN, the court and the Trustee have now taken possession of it, and they want us to pay them $100 to get our own property back. Taking someone else's property and demanding money to have it returned used to be called "extortion", but I guess that was back in the days when the rule of law was respected.
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...activist judges strike again.

Where did you get the information on the $100 fee? If that is the case, that is ridiculous! Here is their statement about our personal documents:
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"an administrative fee for storage, searching for, retrieving, packaging and mailing the items
back to you. That reasonable administrative fee has not been determined yet."
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Wouldn't you think they would cut us some slack with this fee? I personally threw away $6700 into this scam, not counting what happens w/ the promissory note. Absolutely ridiculous.
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I suppose I'll try and get another copy of my documents instead.

Well I'll step up and defend Mark Bausch to some extent as a former Oryan employee who only discovered himself that this was illegitimate back in Late 2003 and started looking for a new job soon thereafter, the people on this board were not the only ones lied to. Granted I didn't know Mark Bausch so I'm not privy to judge his culpability (nor is anyone but a judge in a court of law). I'd just like to point out that deception is easy when done by the right people.

Logic dictates that someone who worked as a salesman in a company selling "blue sky" and claims he didn't know that he was selling "blue sky" until he read about it in the newspaper is now selling "gray sky".
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...There are two types of people who worked for NADN and Oryan Management et al: (1)those who admit they knowingly defrauded their clients and (2)liars.
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...if the former employees of NADN and Oryan Management et al feel true remorse, why don't they join with us in our class action lawsuit to return the money they helped defraud from us? Maybe they would like to contribut their own money to the legal fund and even return the rest to the "pot" to be redistributed to the victims. As a show of good faith, they could certainly contact the DOJ and the IRS and submit statements to help us get our money back and relieve us of the unfair and exorbitant tax bill they caused for us.

Hey Anonymous,
Mark Bausch advised me to have my employer split my income into W-2 and 1099 so that the 1099 portion could be directed into a corporation that had the Mallforall website. He said he was doing it himself at NADN. I spoke to the HR department at my job and they thought I was nuts. They said they never heard of doing something like that and it sounded like someone would be trying to conceal income by doing that. Now we hear that apparently that is the way that the NADN top executives and salespeople were doing it as determined by the Bankrutpcy Trustee. The Bankruptcy Trustee, who we have to assume is experienced in these matters or he wouldn't be a Bankruptcy Trustee, stated that he has not experienced companies reporting income this way by splitting it up into W-2 and 1099. I thought that the rules were pretty clear about what is W-2 income and what is 1099 income. It doesn't seem possible that the same employee of the same company during the same period of time can get W-2 and 1099 income but this is what Mark Bausch was selling. So you tell me that he was just an innocent "babe in the woods". Also, since you are an Ex-Oryan employee, why don't you do us a favor and find out what's going on with Oryan. Are they packing up and movinf out? Are they filing for Bankruptcy? You must still be able to contact someone who knows that information.

...There are two types of people who worked for NADN and Oryan Management et al: (1)those who admit they knowingly defrauded their clients and (2)liars.

I vehemently disagree, granted I wasn't a salesman. While I was aware that the program was oversold to the wrong people somewhat I had stories of happy customers telling me of how grateful they were for this business. When the FTC seized our computers awhile back then gave them back I felt the program was even more vindicated. We triumphed over the government! Of course I didn't realize it, but they were only beginning...

So you tell me that he was just an innocent "babe in the woods".

I won't go that far, granted I didn't know him or his function...just relaying my perspective...

As a show of good faith, they could certainly contact the DOJ and the IRS and submit statements to help us get our money back and relieve us of the unfair and exorbitant tax bill they caused for us.

Been there, done that. I've spoken with Evan Davis on multiple occasions and volunteered plenty of info, though I'm limiting what I say here deliberately.

Are they packing up and movin(g) out? Are they filing for Bankruptcy? You must still be able to contact someone who knows that information.

I don't know, I don't care....I don't keep in contact so I have slim knowledge of the internal affairs of the place, if you are REALLY interested I could make some phone calls but I'd almost rather not...

To All:
Here are some links that illustrate "typical" web development and web marketing costs. The "typical" hourly rate for web developement is about $100 per hour (this is even on the low side) so the initial $2,495 cost is definitely in the "reasonable" range. The web marketing estimator gave me an estimate for a basic plan of about $3,000 so the $2,000 to $4,000 range that NADN was charging is definitely in the "reasonable" range. I usually try to anticipate questions and prepare answers in advance for situations like an IRS audit. I hope others find this information helpful. Perhaps if you get a IRS letter requesting information about your return you can include some of this information to show you are doing due diligence with regard to having a "real" business.

http://www.btobonline.com/webPriceIndex/
http://www.mediazeal.net/marketing_estimate.htm
http://www.iols.com/design/fees/estimator.htm

Hey Anonymous,
Any information that you can provide us with will be helpful. It would be nice to know if Oryan is misleading us about the "next major release" of its software. What did you do at Oryan? Were you a web developer, a salesperson, a manager, or in customer support? Do you interact at all with the owner Robert D. Goestch? How many employees are (were) employed by Oryan? As an employee did you ever get financial data regarding the financial status of the company? Some companies provide their employees with a yearly financial statement. Did you ever get one? What is your opinion about the DOJ's allegation that its one website with 17,000 PINs? What is your opinion about the ADA compliancy of the websites? The old Oryan website stated that Oryan had court rulings that supported its position with regards to the ADA tax credits. Do you know anything about these "court rulings"? You could be very helpful with helping us prepare a defense for an IRS audit. Are you up for the challenge?

Angry Guy, have an email address, any ways I could contact you (or even Opaobie) off list? I can answer SOME of your stuff, but would rather not in public at this time.

Anonymous,

If you haven't figured out yet how to contact me, I'll give you one more opportunity. Click on my username below. It will take you to my website. There is a photo of me just to show I am a real person. On the RIGHT side of the screen are some buttons. One of them says "Contact Us". It opens a contact page that is emailed immediately to me. If you put contact info in it, I can contact you. I can also send whatever you send me directly to the lawyers.
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...your move.
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What is the effect of the virtual mall ruling on the great Link-Share?
I don't get why going for commisions and advertising bucks isn't a business. Is that not what Like-Share does? Aren't most businesses started with the risk of failure? Granted NADN, Oryan and the boys made failure certain, but that is the way they ran it. Do the minimum to make it look businesslike. Lots of us tried to get traffic to the site and succeded at doing that, and we saw the f' ups & we tried to get the contracted & paid people to rectify problems so we could get commissions and not scare away customers. It is cut and dry as far as my thinking. We contracted for a business that was not delivered. So I'm kind of agreeing with the IRS that this was not a business due to the way it was structured. It was not structured and functional the way we were lead to believe it would be.
Lets say I contract with a manufaturer for hardened crankshafts. He gives me data that these things are in huge demand. I take a truckload and get purchasing agents one after another to come look at them. But nobody buys. Finally someone steps forward and says they are under spec. Was I not in business? Did I not realize a business loss? Hey IRS I don't get it!!!!!

Hey Anonymous,
Thanks for "stepping up to the plate".
Here is my email address angryguyatnadn@hotmail.com
I created an email address appropriate to how I feel. One reason I post to this list is because I genuinely want to try to help the others like myself who have been hurt by NADN and Oryan. I do some research and pass it along. Keep in mind that some of what you tell me may need to be shared with others on this list. I will use good judgement to protect your privacy. Thanks for your help. I beleive you are doing the right thing in helping us. We want to get out of this mess with minimal damage done to us.

I think that NADN & Orion caused the malls to be un succesful. I advertized and handed out cards and flyers word of mouth and all that. People didn't trust buying there, but didn't want to embarass you by saying so. This failure to be secure and the poor way the site funtioned paved the way for NADN & Orion to use the fear of business failure to get us to buy other products to compensate. We were convinced by them that we were being defficient, but we didn't fail to bring people to the mall. It failed to be user friendly, secure and functional. So what were we supposed to do. We bought it tried to run it as the business that it was supposed to be.

There have been good points made regarding our intent to start a business that failed due to various reasons beyond our control but how do you write off a business loss if you have no income? Suppose you are in year 1 of this mess. You invested $2,495 for the setup cost and $4,000 for advertising (hit generator). It's time to do your taxes but you have no income and you just found out about the scam. Do you still do your schedule C with the $2,495 and $4,000 as expenses? What about year 2 assuming there is no more mallforall? If you "just take a loss" as Mark Bausch suggests wouldn't the IRS question the "business loss" if you were only in business for less than a year?

I've been asked a number of times whether we should just file amended tax returns and at least stop the clock on penalties and interest accumulating daily. Here is my primary reason for NOT filing until I have ALL the information I need to file an amended return I can sign without reservation:
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Knowingly filing a false income tax return is a crime with severe penalties. Until I have all the information to be able to file amended returns and sign them BELIEVING they are correct, I refuse to place myself in jeopardy. Even if I refiled now and BELIEVED they were correct and then I received new information or the courts or the IRS changed a current ruling, I would then have to refile AGAIN, thus adding to the confusion and again placing myself in jeopardy of having filed a false return. Considering all that is in play, I believe the IRS should wave all interest and penalties, especially since they accepted the returns as filed for at least three years and did not discover the fraud until WE brought it to their attention through our complaints.
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I believe I am following the letter of the law. You should do as you think best and ask a tax expert. Hopefully, we will have advice from the lawyers soon so we can resolve at least this confusing point.
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Opaobie,
My question was intended to be more general in nature. Suppose after 1 year you just "tossed in the towel". You realized the business wasn't right for you for whatever reason. You had no income but expenses. Could you still file a schedule C that would have a net loss that would reduce your income on your 1040. Or suppose the business you started had a single source provider who went out of business forcing you to go out of business.

Angry, as long as a business was started with the intent to be a legitimate business and the owner made a bone fide attempt to operate it or have someone else operate it (the Schedule C instructions even address how much participation must be involved), it should qualify.
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If someone invested in a business delivering pizzas, built a customer list, hired drivers, etc., but it went bust during the first year, should it qualify as a business or just a "hobby"? My guess is that it would clearly qualify, but there may be some weasel words in the fine print of the tax code we need to read.
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As far as the malls go, participating for one year or for all three years, it shouldn't matter because we were doing all that we contracted to do. Failure on the part of Oryan to uphold their part of the bargain does not disqualify us from claiming the investment as a business.

If you have not downloaded all the forms you need to file a Proof of Claim against NADN in the bankruptcy hearing, the Consumer Fraud Complaint against NADN with the Nevada Attorney General, and a request for return of your documents now in the possession of the Trustee, please read this and download the zip file. All of this and more is explained in the "Synopsis" on my website under the text link "Are you a victim of National Audit Defense Network (NADN)?" Just click on that link and read it.
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The estate has files in over 7,000 square feet of file storage. For those customers of NADN who had their tax returns prepared, or had provided personal documents for any reason to NADN, the estate will return those documents, if requested, until approximately October 31, 2004. At that time, all remaining documents will be destroyed. The Bankruptcy Court entered an order allowing the estate to return documents and work product to customers of NADN and to charge a handling and shipping fee of $100. The form to request return of documents is included in the zip file.
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http://www.opaobie.com/download/legalforms.zip
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EXTORTION:
1. An exorbitant charge
2. Unjust exaction (as by the misuse of authority)
3. The felonious act of extorting money (as by threats of violence)
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I guess everyone wants a piece of us. I wonder if THIS expense is tax deductible?
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I know that a lot of people were trying to make this a working business from the beginning. We know the failure is not due to us. I do not accept the pending new release or any of what Oryan has done as valid. It all is out of compiance with the contract. Anything other than an individual working mall is not to contract. The custom modification needs to be "readable" by the intended impaired group or sub-group. The modification programming needs to be of a quality and valued at the level paid for. Restitution needs to be made for anything arising from their failure to honor our contracts.

After reading the misinformation on the IRS' "Misuse of Disabled Access Credits" page, someone might wish to go to this page and contact one of the advocacy groups.
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http://www.irs.gov/advocate/index.html
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I guess whoever wrote the Q&A about virtual shopping malls never heard of Amazon.com or eBay or the hundreds of other similar "virtual malls" or is aware of the $Billions$ paid by sponsor ads. I'm sure the IRS cheerfully accepts their income tax payments annually.
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Bill Gates, call your office.
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What I mean by "misinformation" --
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" Because virtual mall websites are not a valid business (i.e., have no economic substance)...."
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" Because the facts detailed above demonstrate that such websites are not purchased with the realistic intent to produce income (i.e., purchased solely for tax purposes),...."
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"Because the Internal Revenue Service treats the virtual mall website "business" as a sham (i.e., as an activity conducted for tax benefit purposes only),...."
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Hundreds, if not all of us, have sales documented in our backoffices. I have even taken the initiative to confirm one sale with the seller and I have the tracking number for it. A commission was generated and paid for that sale. That fact alone disproves every contention stated above by the IRS. The fact that I was never paid my commission only supports our fraud claim, but it REFUTES every contention stated by the IRS that the "virtual malls" were incapable of generating revenue as a business and that we purchased them ONLY for tax purposes.
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Maybe the IRS expert who wrote that Q&A would like to prove the point by making a purchase through one of the malls and see if it shows up on his/her credit card.
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For THREE YEARS, they accepted initial tax returns that clearly claimed the ADA credit and even tax returns that had been filed without the credit and then were amended to INCLUDE the credit, and they would STILL be accepting them if WE hadn't brought the fraud to their attention. Now they show up late to the party and want to teach US how to dance.
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Like it or not, lousy investment that is has now been exposed to be, it STILL qualifies as a BUSINESS.
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...do you wonder why surveys of the accuracy of the answers provided by the IRS to taxpayers show an 80% INCORRECT score?
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Do as you wish, but when I file my amended returns, I will certainly claim ALL LEGITIMATE expenses and losses connected with NADN and Oryan.
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Final thought for tonight --
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Maybe the IRS -- and we -- should look at the "virtual malls" as franchises since they were all constructed on one architecture. Each one is exactly the same but denoted by a different zipcode PIN. You pay one price for a franchise, and then the contractor says for an additional amount, he can modify it to be compliant with the Americans with Disabilities Act. It works for brick and mortar businesses. If you don't care about being ADA compliant, you can still build a store. If they think the "virtual mall" franchises are overpriced -- fine; but have you priced a McDonald's franchise lately -- just the franchise itself, not the additional cost of construction and compliance with all the laws and codes?
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...the fact that Oryan contracted to make the ADA modifications and failed to do so doesn't make the "virtual malls" themselves "not a business" -- it just makes Oryan in default on the contracts, and it eliminates our ability to claim the ADA tax credit...and that is one more reason to sue them.
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No economic substance... appears due to the way Oryan made it look like a business on the surface to sell it. Again when we tried to run it as a business we were doomed by the way the mall and the impaired access worked and because it did not live up to contract. There could have been a success story if individual malls were created and they started with a compliant modification. We may never know. We've seen that people coming to are "sites" are being redirected to other malls. That would not happen if we had individual websites as per the contract. If this is skimming customers and taking sales then it took away our ability to argue this as a business using those sales statistics. I think that under the heading of fraud these things should be investigated.

Dear Clients,
As former refund manager of NADN you must understand that we tried to help the tax payer and we deeply thought and we were comfortable that mallforall, shopn2000 , Nevada corps , Tax prep , Marketing programs , Living trust plans really worked . We did our job as sales people .
Also look at the USDOJ report they were angry that we took 324,000,000 out of there pocket . They approved that ADA tax credit for internet users , They make the tax brackets for nevada and for the Feds , Not us . So really look at what we were up against it just got out of hand .
aLSO DONT WORRY ABOUT YOUR PROMISARY NOTES UNLESS ORYAN TRIES TO GET THEM ALL FUNDED THREW WELLS FARGO WHICH I HEARD IT IS IN THE PROCESS ABOUT 800,000,000 IN INTEREST RATED PAPER CAN SELL SO we will see
A. Mangabang

Mr. Adam Mangabang,
If you were the refund manager what do you have to say to all of the people that were denied a refund by NADN even though they followed the refund policy to the letter. NADN was in big trouble with the FTC regarding not honoring their refund gaurantee long before the ADA tax credit fiasco. The refund problem sounded like plain and simple misrepresentation on the part of NADN. Also, what about the recent findings of the Bankruptcy Trustee regarding the unethical payroll practices of the NADN top executives and salespeople. They were getting W-2 and 1099s to their corporation in order to hide income. What about the large payment of $425,000 to the ex-wife of Robert Bennington right before NADN converted their Chapter 11 to Chapter 7 bankruptcy. If NADN was so clean why couldn't they survive without the fraudulent business practices. It's hard to believe that you did not know what was going in your key position. By the way, we expect a bigger donation from you to the class action legal fund.

Adam,

So... you were selling too. Must have made a lot of bucks selling those things. Blinded by the money uh? Those things weren't real and there were major problems for a long long time. Tell me that you didn't have phonecalls about problems, from many people, all the time, Tell me that you didn't just send them off to a dead end. Tell me that you weren't a dead end yourself by not calling people back and responding to the calls about refunding money and forcing people over the refund time limit through deliberate procrastination. I think you are stepping in your own poop. Please, please, please tell me who you helped. Why are there more and more people surfacing everyday that have shaken off their embarassment about being scammed and telling their stories? Everything NADN did from day one for me was screwed up, in error, late, incomplete, not followed up on or responded to, lied about etc. The only efficient & consistant thing that you did was rape my bank account under the guise of helping me get ahead legally. Where are the documented success stories now? You took a lot of people who came to you for help because they didn't understand the tax code and you had your way with them even though you're pro's did know code. NADN would not have crumbled so easy if you were even close to being right. You didn't expect us to support you after what you did to us, did you?

Its almost over, relax, just think of it as a loss when we come to sue you and your co-workers personally. Jail time isn't so bad, you can learn and plan some pretty darn good scams while you are in there, and BONUS, they have a law library. What makes you think that the guy that was proud of his daily scam talley won't be the the guy ratting you out? You better do some soul searching and fast.

What I meant to say was.... welcome to the forum that NADN built, now you've got something to show for your effort.

Adam,
Could you please explain in more detail what you mean about the promisary notes. Also what are you upto these days since you know longer work for NADN.

I know some people at WELLS FARGO. I have an account there. I am going to contact them about this ORYAN business.

Mr. Adam Mangabang,
You seem to like numbers: 324,000,000, 800,000,000, etc. Why don't you provide some refund numbers? You say you were the refund manager. A manager needs to have accurate numbers readily available. In fact you should be able to give us some estimates of number of NADN customers that requested refunds, number of customers who received refunds, etc. You know what I mean. Stuff that a refund manager of a legitmate company does. You probably could even tell us how much money NADN made each year for the past few years. As a financial manager I would want to compare my income to my refunds to know my financial position. Come on. You can do it. I have faith in you. Give us the data. You can email me directly if you like.

I spent most days vascilating between fear and anger---fear of what the IRS can and might do and anger at what NADN DID do! I have made a small donation to the class-action legal fund and hope we can get some good help for this disaster in the near future. My family is nearly financially ruined by what we have "given" NADN and now what we will probably have to repay the IRS. I can't believe they (government) are being so arbitrary with so many who honestly thought they were taking legitimate tax breaks (like the "big companies" always get.) I was not trying to be greedy. We have always paid much more in taxes than we should because we feared audits. NADN promised to be "aggressive" in seeking what we were DUE, but nothing dishonest. We felt vindicated in taking these tax deductions because we KNEW we were not being dishonest, and because the "big boys" (i.e., NADN) would be on our side should the govenment take issue with whatever we legitimately claimed. So much for a dream...heading into a nightmare.

About the same time I bought into NADN's Mall for All (I was looking at a long-time off work while my daughter recovered from a liver transplant--about 6 months--and I desperately needed replacement income), I also purchased a "legitimate" mall for $5,000. The initial $5,000 cost for this other mall included setup and training for me to learn to modify my own mall, but I had to pay for my own merchant account and any membership fees for wholesalers I used on the site (plus $40 per month hosting fees and $20 per month sales fees--a king's randsome to me!) In short, the first $5,000 was just the beginning--initial set up and training only. My mall (backdoormall.com--now defunct for the same reason that Mall4All doesn't work--too hard to drive customers there, and expenses drove me out of business) was run by ME and all advertising was by ME. Paying $10,000+ for something set up and run by someone else (i.e., Mall 4 All run by Oryan) or paying $1500 for a marketing plan (cheap at today's prices I have checked out), Oryan/NADN costs all seemed reasonable to me, in light of what experience I already had with another mall. I thought I could run/market both malls from my home while my daughter recovered, and that I would make money to compensate for salary lost (and still be able to care for my child during her long recovery). Maybe I paid too much for the first mall. I do not know, but that company is still in business and still selling mall sites. And, as far as I know, they are considered a "legitimate" business. People set up business on the web every day. Many fail. But they all can claim their business expenses for heaven's sake! In light of my experience with tearing my guts out to market these sites, I believe it is unworkable (in my experience), but that does not make it a bogus investment. It just makes it a business mistake. I did not succeed, but I did not invest $15,000 to get a $5,000 tax credit, either!!! The intent was legitimate. The failure was unexpected. All expenses (out of pocket) MUST be legal!!! Or else everyone who fails at business must be required to repay their deductions!

I thought that the government looked favorable on small business because it helped the economy. It sounds like allot of our money went to the greedy few but we did support the employees of NADN and Oryan. These employees received our money as income and paid their expenses. So our money helped to stimulate and sustain our economy. Even the greedy few helped by spending our money on goods and services that stimulate and sustain our economy. I'm guessing at the math here but let's say that we gave $10,000 to NADN/Oryan for setup, marketing, etc. We had little or no income from the mall. We didn't take the ADA tax credits but the expenses yield a $4,000 reduction in our W-2 payroll taxes. Any competent person would see that our intent was not to spend $10,000 to get $4,000 back but that is how it ended up. I would think that non ADA tax expenses would be allowed as business expenses. I think the ADA stuff will be a different story. I think Oryan would love the IRS to allow the ADA tax credits because then Oryan would have a stronger case about the promissory notes being legitimate. If the promissory notes are deemed valid then allot of people will owe Oryan allot of money. The mall owners who clicked off their entire note wouldn't mind because they would be done with the mess but the mall owners with allot left on their note wouldn't be so happy because we all learned allot about how the mall really doesn't work without the NADN clicks. There is one group of people that would owe the IRS allot of money for the invalid ADA tax credits and deductions. There is another group that would owe Oryan allot of money on the balance of the promissory note. Is it possible if the IRS allowed the ADA tax credit and there was no way to click down the note then could a mal owner just use the tax savings from the ADA tax credit and deductions to pay off the note, close up shop and consider this experience a valuable lesson about scams.

Interesting rationale Angry guy, when I was working for Oryan and thought the money coming in was legit, I thought nothing of it. Granted it wasn't the best money possible in the industry either (but I'm not giving specifics), but it got me through rough economic times. However when my discovery that some of the money was illegitimate happened, I had to reconcile between being poor while more sites were sold anyways, to taking illegitimate money so I could eat (at least making that decision until I could find a new job). It did nag at me though and I do promise to pay it back as best as I'm capable.

Anonymous, how long have you worked for Oryan? If you work there longer than my 2 years mod with you folks, you must have smell something is wrong? Why late in 2003?

Hey Anonymous,
There is a book called "when bad things happen to good people". I think all of us can have our own chapter in that book. Anyway, many of us have been hurt greatly by this situation. It sounds like some of us were hurt before, reconciled with that event, then really believed in NADN / Oryan because of all of the "legitimate" publicity. We honestly thought this was going to be "our" time to get ahead of our bills. Now some of us face financial ruin. You sound sincere. Maybe you can make a contribution to the class action legal fund. The fact that you became aware of the issues leads us to believe that the people above you knew of it long before you and probably covered it up to see how far they could go before they bailed out. As an ex-employee, any information that you can get to opaobie for the attorney would be greatly appreciated. I'm sure they would be able to maintain your privacy.

As far as the class action fund goes, Paypal requires ID verification, and that's a big no...but if there were a snail mail address (even a PO Box) you might find a blank money order for a few bucks in it...

ANONYMOUS,
how do I find out how many sponsors hits I have?

Regarding sponsor hits, goto
http://www.mallforall.com/backoffice/
In your original paperwork from Oryan you should have received instructions about your username and password. Initially your username is your PIN or zipcode (i.e. 12345) and your password is your lastname (i.e. smith). Once in the backoffice you follow the menus. Select "My Account" then "Outbound Hits". You need to enter a date range then you should see your sponsor hits. You can see them by date or store. If you choose "Note Information" you will see the balance of your note. I hope you are surprised and find out that your note was paid down by non NADN sponsors. Never mind, I forgot we are dealing with Oryan.

Mr. Mangabang,

I reacall a conversation between myself and the DOJ, in which we discussed, at great length, my reason for contacting them. My search for truth was prompted by a phone call from a company Callied Allied Grantwriters of America. The salesman was coming to my rescue, my salvation in the telephone. With NADN gone, nobody would keep the malls afloat. All the monies I had fed the hungry beast, were lost, and the only solution was to get an outside agency to make it all work for me... for a modest fee... $4,000. Your Nevada Chamber of Commerce ranking (which was a purchased honor) and your elementary website brought me to rip-off report, and untilmately to this site. You were one, of two named by the DOJ, heading up this new scam, designed to scare people into throwing checks your way. Certainly the financial freedom you have gained, at our expense, should afford you the opportunity to do better things with your time than look over the shoulders of those who must realize the burdon offered by that which you helped create.

Checking in from a long and emotionally draining weekend. My mother is doing better than I expected. I am downloading over 600 emails, so it will probably be sometime tomorrow befor I sort them out and send replies where needed.
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For those who have joined the Class Act Legal Cooperative, Welcome! If my autoresponder didn't send you a confirmation, I will try to sort through and make sure you receive one and are added to the list by hand. The information you need is posted on my website through the text link that asks if you are a victim of National Audit Defense Network (NADN).
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For those of you who have contributed to the legal fund, thank you, and PayPal should have sent you a receipt.
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Anyone like Anonymous wanting to contribute but remain anonymous, just contact me, and I will tell you where to send a blank money order.
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Anyone like Mr. Adam Mangabang who would like to turn "state's evidence", make restitution, and avoid lengthy prison time, please contact me ASAP. The sword is about to fall.
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I'm impressed with the activity that is taking place. A lot is happening that you do not yet know about, and much of it looks good for us. I will pass on information as I receive it.
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Every now and then I would like to take the time to give Opaobie and the many others who post a " big high five " and a thank you for all your help and your efforts to keep us all informed. Your commitment and time is not taken lightly.

To all:

Just thought I would give you all an update on my situation as of today. I received the questionaire from the IRS and sent my response. On Saturday we received a very polite letter from the IRS agent who handled our questionaire giving us the amount we owe for 2002 taxes. It was slightly more than our original refund and disallowed the ADA credit and the business write-off. The letter stated that if we sent in the amount due it would be held as a cash bond and stop any further accumulation of interest. Could not give a final amount, since there is still ongoing investigations and rulings to be made. The letter also stated that sending them the money did not prevent us from filing and appeal.

I am meeting with a CPA later this week and will be discussing this with him, but for now, we will probably send them the money requested. I am not sure, but I don't believe this counts as an amended return, just a response to the IRS. Will let you know if I find out anything of importance from the CPA.

NG

Next time you speak with the polite folks at the IRS you might ask them if they have considered waiving the interest and penalties based on their having accepted original returns claiming all the credits and business deductions and amended returns which added the credits to previously filed returns during the entire three or more year period in question. It is not uncommon for them to waive those charges when they share a large part of the culpability for the errors, and it is not out of order for us to ask for them to do so.
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Public disclosure of the entire situation and their part in participating in the financial destruction of thousands of honest taxpayers aided by former IRS experts serves no one's best interests. Dealing fairly with the victims does.
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Dear NG,
If possible could you provide numbers?
Amount of your original 2002 return:
Amount IRS says you owe now:
Amount of penalty in owed amount:
Amount of interest in owed amount:
Is the IRS denying all business expenses, in other words, are they denying all expenses related to the mall?
Good luck with the CPA!
Please keep us posted as to your progress.
If your CPA thinks some data gathering would be helpful then post the request here or emal me directly and I'll see if I can do anything for you.

Opaobie,
Have navigated the Taxes.com website and feel it is a legitimate organization. Using the site I was able to locate an "Enrolled Agent" in my hometown. I plan to call and investigate and hopefully get answers to a lot of our questions. Will update everyone soon.
SRM

...by the time this nightmare ends, we may ALL qualify as EAs...but we may be too broke to practice the trade....
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Poll Question: Does the following site qualify as a legitimate online shopping mall?
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http://www.walmart.com/
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Unbiased Respondents -- Yes
IRS Q&A writer -- No
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Check it out for yourself and then YOU decide.
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...funny, they even have a LINKSHARE affiliate program, and I have a link to it on my website to prove it.
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I too am a victim of NADN I purchase two malls on I am new to is discussion, 2001 and 2002 they promise me a legitimate business to make me some money. And now I have to pay back the I.R.S my credit and deduction I am definitely interested in joining a class action lawsuit againsted NADN. About the I.R.S I heard we have to Amend our taxes and pay back the owed, but there is a dead line to pay in order to avoid penalties and interest. I have contact from a former employee in the tax division who stop me from purchasing more products from NADN begining of jan 2004. She was working with D.O.J helping shutdown NADN, and told me I must AMEND my taxes because the I.R.S is giving a break to the people who fund the owed of taxes not paying the penalties and interest but did not give a ending period

Just a bit of a happy note (for my family) on this ongoing NADN saga....I just redid my 2002 taxes (using Turbo Tax software) and eliminating all the ADA and advanced "note" credits NADN took on my behalf. Because of all the other errors made by NADN (they claimed I paid $3,000 LESS in taxes than I actually did according to my W-2s, and also did not include my business expenses from my other business when figuring deductions), I actually came out with an additional REFUND of $2,000 even without the credits! (I don't plan to send it in yet, but I have done the math. I'm waiting to see if I can still also claim the ADA or note credits). I did claim the actual out-of-pocket expenses for which I have receipts paid to NADN/oryan (down payment, marketing, etc.), which may be disallowed (but should NOT be). Even so, I should about break even and not owe much in back taxes or penalties. I advise all of you to go CAREFULLY over all the taxes that NADN did for you and ensure they are correct! I got a very pleasant surprise (and even more distain for the "experts" I paid to do this work!) I should have checked more carefully when NADN did the taxes, but I figured they were the experts and I did just a cursory overview when I got them back (they were already late) and sent them on. I figured if they did something wrong and I was audited, they would protect me. Ha!

Luckily (I guess) my 2003 taxes are still somewhere in the NADN bankruptcy offices. I refuse to pay $100 to get them back, so I will send in photocopies of my w2s (I keep copies of EVERYTHING I mail) and do my own taxes. Nothing from the ADA credits will be taken, but I still plan to take the actual expenses I paid out of pocket. If they are disallowed, I WILL appeal. But guess I have to be audited first.

Hope everyone's story is better than it looks on the surface right now. This was a nice drink of fresh water (in an ugly swamp) for me and mine.

Wouldn't it be great if one of the IRS auditors monitoring this site would post a comment with a link to a page on the IRS site declaring that, after further review, they had decided that all penalties and interest would be waived and that some REASONABLE allowance would be made for expenses and back taxes?
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Just a quick question?

Where did the information come from about the IRS waiving penalties and interest if an amended return if filed by a certain deadline? I have perused the IRS website and did not find any information stating that.

NG

Spoke to a Mr. Jim Brown, tax attorney, with Taxes.com. Was very amiable and answered my questions very professionally. Claims they have a number of ex-NADN clients and is very familiar with the scam. He said we should go ahead and calculate our ammended returns. If the back taxes are too much to pay all at once, then get a tax attorney, CPA, or an EA to negotiate a payment plan or "Offer in Compromise", which ever is the best for your situation. He also informed me that interests will not be disallowed. Penalties may be negotiated, but no guarantees.

Just want to thank Opaobie and all other people seeking justice regarding this mess. NADN was a reseller of a deceptive business venture (the malls) created by Oryan Management. ORYAN IS WHO NEEDS TO BE BROUGHT TO JUSTICE. NADN had many faults too and they have suffered by being put out of business.

TO PERSON WHO SPOKE WITH MR. JIM BROWN:
1) What did he say about deducting the $2495 downpayment as a business expense?
2) What did he say about claiming the W-2 "income" for click-downs of the note as revenue for the business?
3) What did he say about claiming other mall business expenses?
Please advise ASAP. Thankyou

RMarie,
Basically he stated that anything to do with the Mall websites would be negated by the IRS. He can be reached at 1-800-685-6168. I will be speaking to an EA in my area get more specific answers. If we are ever audited, these points could be argued in our favor. Will post more info as it is made available to me.
SRM

To SRM
Thanks for the feedback. How could these points be argued in our favor NOW before an audit to give us some closure.
I understand not including the $5000 ADA credit or $5475 write off, but the $2495 seems like a legit business expense to me. (We all physically paid $2495 cash for a shopping mall business.) The notes should be void by ORION since they were tied into the ADA credit which they set up wrong and/or illegally. Please advise what the EA says. I would like to amend my returns but I don't know what is correct.

Although efforts are continuing to find a tax attorney or firm willing to represent all of us regarding refiling amended tax returns or to argue our case before the IRS, the most promising approach based on the posts above and the urgency with which we need to proceed to stop the clock on interest and penalties might be to visit with the people at www.taxes.com, for example Mr. Jim Brown at the 800 number, and work independently with them. They will help you find an EA or tax expert in your area as well.
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I am also working with lawyers and members of Congress on a procedure to file either a complaint or seek some other legal or procedural action against the IRS if they decline all expenses associated with the malls based solely on their current stated reasoning under their "Abuse of Disabled Credits" link. It may require having IRS representatives testify before a Congressional committee or sub-committe as to why they have taken their current position under these extraordinary circumstances. We are building a clear case that, although we have sufficient grounds to sue Oryan Management because the malls were defective and never modified to meet the requirements for ADA credits, sales were transacted through the malls, and an intent to conduct legitimate business was demonstrated by mall owners. The Schedule C that I will be submitting with my amended returns will show both the revenue and expenses -- WITHOUT the 1099-misc income and the Promissory Note balance -- and the recorded sales documented in my backoffice and by Link Share and by the stores that sold the products, and I will challenge them if they deny the authenticity or acceptability of that form with its supporting documentation.
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If you could ask Mr. Jim Brown and post his answer, we all would be interested in hearing his explanation of why the IRS would deny all mall expenses and what other recourse we have to appeal that denial. I think we all would be interested in reading the EXACT sections, Chapter and verse, of the tax code and tax law that the IRS is using to deny all expenses associated with the malls. The ones they have posted under the "Abuse of Disabled Credits" link is based on faulty logic and invalid assumptions and premises, and the fact that sales were transacted and recorded refutes their arguments.
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...all the other online shopping sites might also be interested.
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RMarie,
About your 4:14PM post, The notes should be voided first because they did not produces the individual "website" as per contract and therefore no "modification" could have taken place. I don't think that the one modification of the one mall, that you don't own, and was not ADA compliant really impacts us other than the scam factor perpetrated by Oryan.

To RMarie,
I am personally meeting with an EA in my hometown tomorrow, 7/23/04. I will bring up all these concerns, which we all share, and post my findings ASAP. After speaking to him on the phone, I was very impressed. Please be patient with me and I WILL post his advice and plan of action.
SRM

To All;

I met with the CPA this morning. The good news is that we will be getting a refund without filing a Schedule C and taking any of the deductions. Of course, that is only because we were able to claim our new grandchild as a dependent.

The CPA felt that the stand the IRS was taking about disallowing any of the business expenses was incredibly agressive and should be challenged. He stated that almost any business, whether good or bad, is normally allowed business expenses pertaining to setting up and running a business. He believes we should all be writing letters to our congressmen and that it will probably take a congressional hearing to get this matter finally resolved, and it will not happen any time soon. His guess is that there must be many people in each state that participated in the websites. There is strength in numbers. I wonder when we can get a list of people from the DOJ of the bankruptcy court so that we can pool our resources.
Is anyone out there really good at writing letters to congressmen? Who has already done so? Maybe if we can all make our case together it will have a tremendous impact.

He is also going to call the IRS agent that sent us the letter to find out about why the business expenses are being completely denied, and said he may advise us to send payment for the ADA credit only, and make note that this payment is being filed under protest and in no way prevents us from filing an appeal when the matter is settled. He also thought that the "give" later may be to allow these expenses. He thinks penalties can be waived, but that interest really never is. I asked him what interest rate is being charged and he said that in the last couple of years it has only been 4-5%. I will let you know what he finds out.

NG

Wow! An unexpected (or is it?) development:

From Oryan:
Dear Mall Owners:

Oryan Management is forced to close. The NADN Bankruptcy Estate owes Oryan $670,000. Oryan has had no revenue since the NADN Bankruptcy. It has burned through all its cash looking for new ways to generate new sales and has failed. Besides the fact that Oryan is a service company, not a sales company, the Internet bad press regarding the DOJ lawsuit, and Oryan’s vendor relationship to NADN have been severe barriers to gaining new sales.

Without compensation, Oryan has kept Mallforall.com and Shopn2000.com Internet shopping malls active. We have paid the hosting fees and continued to develop new enhancements to the mall. The intent was that it would provide you, current mall owners, with additional ways to generate revenue from your business, and provide Oryan with new sales channels. However, we ran out of money before achieving our goal.

All employees have been laid off, with the exception of a few to help close the business. As of July 22, 2004, the servers will be shut down and Mallforall.com and Shopn2000.com will no longer be accessible.

Oryan staff enjoyed the thousands of hours spent on the phone talking with you mall owners interested in running your businesses. We sincerely wish each of you the very best in your future endeavors

TO Jean-
Did not get this Email--As part of their closing will they send all mall owners voided Promissary Notes or will we have to go after their "estate". We may need to call Governor Arnold and find out.

I second the motion to contact your representatives in the House and in the Senate as well as your state Representatives and Senators. I have already written to each member of the Senate and House Appropriations Committees as well. My letter was composed mostly of the information posted on my website under the "Are you a victim of National Audit Defense Network (NADN)?" link. I ended the letter by asking for an investigation into the IRS over their handling of our situation. Feel free to use any or all of it along with your own story. With all that is happening in politics these days, it may take some time for our issue to attract any attention. At least I am receiving acknowledgements from most of them. Letters from constituents in their own states get the highest priority, so look at the membership and at least write to the ones from your state.
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If the Oryan update is true, Oryan had best have very accurate records, including exactly how they spent every penney. Intentionally depleting resources and paying bonuses and excessive payroles for the sole purpose of denying assets to creditors in anticipation of filing for bankruptcy is a crime, and the dispersion of those assets can be reversed.
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A "Dear John" letter does not end the matter, as they will soon find out.
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Would one of the CALC members please forward that letter to the attorneys. I am not at my home computer and have not received it myself.
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Just a thought for today.

Instead of "Away IRS", maybe the saying should have been "Hello IRS".

Might be a good idea to print everything you need from your back office before it goes away!

Might as well start watching this site for Oryan's bankruptcy filing. United States Bankruptcy Court, Central District of California
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http://www.cacb.uscourts.gov/
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As soon as they file, we need to file Proof of Claim forms just as we did with the Nevada district for NADN.
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Congratulations to all for ending this scam. Mall Status Update #7 should say that Now that NADN, Oryan, et al., cannot produce "income" by continued scamming, and cannot figure a way to legitimize things, it's time to close shop. I guess maybe there's a lesson, "Don't f**k with honest people, we like to stay honest".

Bankruptcy implies that someone didn't have enough cash to cover their debts, and for some reason I don't think Oryan is in this position. Oryan was lower key than you'd think and didn't take on much debt, so a bankruptcy filing may not be necessary (however at this point I doubt they have much cash either). They may just quietly peter out and die slowly.

What happens to us if they do slowly peter out and die? Now both of the sales (NADN) and service (Oryan) companies are gone...is there any hope to get money out of Oryan?

Anonymous, how well do you know Oryan financial? Are you in accounting or sales or IT? I would like to get more info from Oryan to file with my own attorney.

Opaoibe:

What does Oryan's closing do to the class action? Have you heard anything from your contacts?

NG

I recieved a postcard from Julia Thompson as tax specialist from NADN. I never worked with her. She apparently has a database of those who purchased Malls. She is working to amend tax returns for Mall purchasers. She can be reached at 888-474-0233

Unless Oryan Management files for bankruptcy protection, their closing does not stop the procedings to sue them. If they continue to burn down cash, they will have to explain in court why they did so, how they spent it, and why they did not return it to their clients. As a closed business, they have no justification for expenditures.
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Keith, or anyone else, you might want to give Ms Julia Thompson, formerly a "tax specialist" with NADN, a call and ask her if she would like to perform her work pro bono and fulfill the "audit-proof guarantee" on behalf of NADN. She will also have to explain to the Bankruptcy court and to the DOJ and perhaps other agencies why she is in possession of a database of privileged information without authority. She may truly be a tax expert and she may be trying to offer some sort of restitution in her own way, but her credibility is suspect as well as her motives, especially if she is charging former NADN clients for something they have already paid NADN to do. Does she also have copies of the tax documents clients sent to NADN that the Trustee now wants $100 for before he will return them to the rightful owners?
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Keith,

Don't know who Julia Thompson is, but the fact she worked at NADN and STOLE or is in possession of a stolen database of highly confidential information and is now trying to exploit it for her benefit concerns me.

Rick

Did anyone else happen to notice that the malls are still out there?

NG

...they are probably paid up on hosting through the end of July....

My malls are there, but the links to the stores don't work.

If the Malls are there but the links don't work, then it still works the way it always worked. Other than hosting fees and skeleton crew Scammer salary, what big outlay has Oryan been shouldering? What's changed? Oryan's closing up will not affect the quality or content. In fact this may improve the reliability of the one site, kind of like the stopped clock is right twice a day thing. For quite a while we all promoted error screens. If we were paid one penny for each error screen, revenue would have out-paced the theoretical sponser money.

Ahhh but did they close up, just move, or is this another scam angle to cover the scent and keep the dogs away? Betcha that post about them moving out caught up with them. Good for us!!! Somebody's watching you Oryan, and we know who you are and we will find you. All you little ex-Oryan people best think about setting things right, 'cause the big boys weren't in it for you and now that they are done stepping on us guess who's next. Sure they will tell you things are OK. We were told the malls were OK, the ADA modification was OK and so on down the checklist. That's what they do.

We are a network of former scam victims and working class nuveau activist located in the 48 contiguous & 2 non-contiguous States of America (not to exclude tropical possessions) you cannot hide. Part of the problem? Part of the solution? You decide.

It's nouveau, man you guys can't get nothing right!

Picky, picky, I believe you meant "anything" right, thus avoiding the double negative.

Met with a EA yesterday and he stated the IRS always takes the most aggressive stand. Will figure my taxes with and without the expenses and see the difference in money. The ADA Credit is definitely out. A third option is to calculate the returns with a "business theft" for the start up expenses and upgrades. Each person needs to decide how far to push the envelope and be willing to subject to an audit. I personally am not afraid to argue my case depending on the amount of money involved and cut my losses to a minimum. There is a point of deminishing effort and return. Be comfortable with your state of aggressiveness and go for it. Speaking to a professional did help my anxiety. He could see right away, we did not get into this business just to take the tax advantages. Who in their right mind would continue to sign $10,000 notes without expecting a return.

It ain't tha gram-ur so much as tha spell-eng that gets me. It's the triple negatives that are tricky as well as trying to get the alliteration right.

Has anyone actually received a letter from the IRS saying we have to amend our taxes if we were involved in this Oryan scam?

This link might be of interest to this group:

http://www.beamentor.org/Contact_set.htm

click on the staff email addresses.

I just dropped the good folks at "Be A Mentor, Touch A Life" a note and then....
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Veni, Vidi, Exii
......

Spelling? Grammar? Language? Apply that to the subject at hand.
How else could you interpret paying for a website that will be modified to comply with exact standards that make it qualify for a tax credit?
By the way, my spell check is a little bit redneck when it comes to French. I tried to say that it was a huge "faux pas" getting involved with NADN and Oryan and the computer tried to change it to "fox pass". You learn something nouveau everyday.

I just checked my dog's name, using the "French disgontificator module", and it came out (drumroll)....."Phydeaux".
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French phrases:
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"Go out and trim the lawn" -- "Mow de grass"
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"The light is burned out in the bathroom" -- "John dark"
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...back on topic....
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"How else could you interpret paying for a website that will be modified to comply with exact standards that make it qualify for a tax credit?"
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HONESTY is the same in ALL languages.
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While listening to Michael Savage the other day i heard a Nevada Corporation commercial, needless to say i sent him an informative email about Cort Christie and who he was and is involved with. I also sent a link to this site in the email.

Does anyone know if California Law requires signatures on contracts & promissory notes to be witnessed? Many states do.

If you happen to be in Las Vegas today,.....

District of Nevada, U.S. Bankruptcy Court
National Audit Defense Network
03-17306 LK
Subject: Continued Meeting of Creditors
CONTINUED MEETING OF CREDITORS
Date: July 26, 2004
Time: 4:00 PM
Location: 600 Las Vegas Blvd South Room 550
A continued meeting of creditors is scheduled for the date, time and location listed in this Notice. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be
continued and concluded at a later date without further notice.

Can someone find out if the meeting of the creditors is recorded via stenographer or by some other means and is this information available to the creditors who are unable to attend or even the general public?

I was just in my mall and it is working as usual. The links to the stores is working also. The e-mail from Oryan said the servers would be shut down as of July 22.

When I went into backoffice to print my sales record, I noticed sales to some of stores were missing. Ones that I had not received credit for as of yet. Has anyone else noticed this?

I'd also like to know if anyone has received any specific notice from the IRS as so what we are suppose to do with our tax returns. I want to wait to see how this all turns out so I only have to refile once. Has anyone come forward to represent us in this case?

Judy,

Sales had a way of appearing and disappearing, and commissions not paid. The answer from Oryan was usually "computer glitch" or you get paid 90 days after they are paid. Do you think that these honest people stole your money? How dare you!!!!! Don't you think they limited their activities to scamming larger ammounts of money. Would they stoup so low as to take the very sales that might allow you to show that you were trying to run it as a business, on top of not honoring their contracted duties that already caused these to be questionable as a business?

I purchased a mall late in 2003 so I am relatively new to this situation. With only a few months into the "business" it didn't surprise me that I didn't see commissions because Oryan reported that "software modifications" were occurring that caused the sales/commissions not to be up to date. My understanding of the "contract" is that from the beginning of your mall only a portion of your sales commissions (I think 20%) were to go to the note. The rest (80%) was to go to the mallowner. My question to the mallowners who have owned malls for several years, haven't you received any commission checks? I understand that the G&J Eagle Enterprise 1099's are bogus 1099's for the NADN sponsored click throughs but hasn't anyone gotten a 1099 directly from Oryan for commissions over the past several years? If someone can produce a canceled check for true commissions and is willing to share that with the rest of us then couldn't we use that canceled check to show the IRS that the malls created income that was actually received by the mallowner in the form of a check?

If everyone would type "We are scammers" into the search engine on the site, would it show up on their most popular searches list? How about let's try it!

Found this searching the web:

Zephyr Development Inc.
875 S. Westlake Suite 200,
Westlake Village, CA 91361-
Phone: (805) 777-1022
Fax: (805) 777-1043
E-mail: zephyrco@gte.net
Officers:
Robert Goetsch, President
Total Industrial Portfolio: 132,000 sq. ft.

The project is the second and final phase of a five-building, 270,000-square-foot business center that included 180,000 square feet allotted among three buildings during Phase I. Robert Goetsch, president of Zephyr Development, has worked with Centex Commercial Development on previous projects within Northfield Business Park and the nearby Camarillo Ranch Business Park development.

"Ventura County is a very stable market, with a 92-percent occupancy rate in an inventory of more than 58 million square feet," Goetsch said. "Although this is one of the most restrictive markets in the county, Oxnard has a reputation of attracting quality mid-to-small-sized businesses who come here because of the quality of life."

Dear blank,

Sorry to bring you bad news but I believe that the popular searches aren't changed by the actual searches. I sat several nights, all night, trying to get a single item, that already showed as popular, to move up a notch, simply because I was questioning it as being active. It did not happen. Imagine that "Trey" cannot beat the number 2 popular search, "chocolate, chocolate". Imagine again that a lot of people entered the redundant "chocolate, chocolate" exactly as written and enough to become #2. Why that and not just the single "chocolate" which has been holding the #1 spot for the over 5 months since Valentine's Day. Why would someone come to Mall4All or Shoppin'2000 and search for Ebay in great numbers?

The CYA folks at Oryan could still pick up on your posting anyhow and "make it so" to prove me wrong.

Remember when "John Trevolta" (sp?) and some other interesting things were showing up in the top ten. That is also when they started selling their Optimization scheme (scam). They pointed to the popular search "Hits" that were "bringing" people to the site, then tried to press you in to buying the Optimization product to produce your own set of winning search words.

They did a great job of creating a problem for the mall business, convincing you that to remain a viable business you had to take of it and charging you to solve it.

I did receive commission checks from "Free Trade Enterprises" but never a 1099. That could be because the checks totaled to under $30 for the year.

I was looking at the SIB Background at Be A Mentor. It looks like that Robert Goetsch, likely the same guy from Oryan and Zephyr Development Inc., has political connections and a background with governmental funding or grants. Listed mentoring includes support for "physically or learning disabled". Certainly the ADA tax credit found it's way around the SIB office. In addition to State of California, Alameda County and other local support, the names of Hillary Rodham Clinton and Attorney General Janet Reno are mentioned in connection with a Federal JUMP grant. If the same Robert Goetsch, maybe these connections are why Oryan hasn't been in the limelight to the degree that we would expect from a nationwide scam.
It makes you wonder if those street smart, at risk, gang types were trained by SIB and then became Oryan and NADN employee's with skills from both worlds.

Robert Goetsch seems to be followed by the word "President" a lot. There is another listing for Robert Goetsch, President, at Bay Area Industry Education Council in Fremont, CA. If this is one guy, he's on a lot of payrolls. Coulsd he be an Assemblyman in Wisconcin too?

Hayward man named in tax suit

Author: Josh Richman, STAFF WRITER
Date: May 8, 2004
Publication: Daily Review, The (Hayward, CA)

A Hayward man is among those who have been barred by a federal judge from offering certain tax shelters to the public, and from even preparing tax returns.

Robert D. Goetsch and his co-defendants also must give lists of their customers' names, addresses and Social Security numbers to the Justice Department, according to orders filed in Las Vegas. The defendants agreed to the orders without admitting any wrongdoing.

Goetsch is president of the Fremont-based Bay Area Industry Education

...looks like the only thing he hasn't tried is being a TelEvangelist, but he and Jimmy Swaggert could probably team up...

Interesting... a guy with political ties in an election year. They'll toss him like ten year old cookies. Got Milk?

Anyone interested in helping pressure Oryan to refund our money might want to email or call the reporter whose byline appears in these stories every time you come across one and simply ask them to read the Synopsis posted on my website. It would give them a great opportunity to write a followup story, and it would continue to keep our situation in the news. With enough public exposure, some enterprising DA or politician just might come to our aid.
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...can't hurt as long as you are polite and simply offer them the link. All the research to do a great story is already there for them to use.
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Are you a victim of National Audit Defense Network (NADN)?
http://www.opaobie.com/Synopsis.html

People Beware of CPR business solutions. They just called me the day Oryan gave shutdown notice that for only $35/mo they will have their corporate lawyer help me.... Yeah right, just like the $500 hits program they wanted to sell me 2 days before that! They even tried to tell me that prepaid legal couldn't help me and the the bankruptcy court was going to make the notes due in 90 days! I'm filing a complaint with Nevada about this one. Out right lies! just like NADN... I just hope I can avoid bankruptcy through all of this..

I thought CPR Business Solutions and all the other aliases of Oryan Management were enjoined by the court to stop selling schemes, etc.
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Mark,
You might want to contact the DOJ folks as well as the Attorney General of California (and your own state AG if you live outside California).
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This is a link to the consumer complaint form for the Attorney General of the State of California. California residents would most likely receive preferential treatment if anyone would like to start the ball rolling against Oryan Management (AKA all their aliases). Posting the links to the DOJ injunctions (and anything else in the Synopsis I have posted on my site) could help them better understand the complaint. Might as well start a full court press before they spend up all the money.
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http://ag.ca.gov/consumers/mailform.htm
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District of Nevada, U.S. B.C.
National Audit Defense Network
03-17306 LK
Subject:
Continued Meeting of Creditors
CONTINUED MEETING OF CREDITORS
Date: August 26, 2004
Time: 4:00 PM
Location: 600 Las Vegas Blvd South Room 550
A continued meeting of creditors is scheduled for the date, time and location listed in this Notice. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be
continued and concluded at a later date without further notice.

You guys are on wild goose chase to hunt down the PRESIDENT... funny stuff. The original owner and original president of oryan was Daniel Porter, then oryan president was briefly Weston Coolidge, then back to Porter, only to be sold to Goetsch in September of 2002. Robert Goetsch took over shortly after the IRS had raided Oryan(Guns a Blazin). The IRS seized all documents prior to July 2002?(promissory notes; all client documents on file). The IRS should still have them, unless the sent them to the round file. Oryan was not shut down, other than the day in July. Why did they not shut them down then and there?

What Anonymous just said about Weston Coolidge being President of Oryan for a brief period of time would explain the previous post that said they received a letter from Weston Coolidge, President of Oryan. The more I learn about the inner workings of these companies, the more "sick" I become. The fact that the same people, Weston Coolidge and Daniel Porter, were president of NADN and Oryan at different times supports the DOJ position that its a scam. I just don't know how all of this information will help us now, however, with the IRS taking an aggressive position with these scams, they should have little trouble with a successful prosecution against the individuals named in the lawsuit. The IRS has posted on their website how they have had success in similar cases so they should be able to nail people like Weston Coolidge, Daniel Porter and Robert Goestch.

Anonymous,

Thanks for the input, but we've already got that chronology of Leadership at Oryan. You can dig back through the postings here and at the previous URL if you don't believe me. I fail to see this as a wild goose chase. Mr. Goetsch was in the picture before he took over the presidency, right? He was aware of the raid, right? Business deductions and Tax Credits are what the IRS is about, right? In the shadow of that raid he took the reins and continued the status quo with mall sales, ADA modification sales and was paid for his duties, right?
IRS involvement/raid should have triggered an immediate re-evaluation of the product and its legal status and sales halted while that was being done. There is no indication what-so-ever that there was even an an attempt to make the basic product comply with the contract, let alone comply with IRS standards, while the sales continued under Mr. Goetsch. You can see many stories online from people who were contacting Oryan to get those changes done along with other requests, so they could effectively run the contracted business. You can see that instead of making the proper changes and solving the core problems, the scam actually ballooned under Robert D. Goetsch, lead goose.
We are just reverse engineering the stucture at Oryan, we know that fingers will always point backwards when it comes to the origin of blame.
I fail to see why are you saying this is funny stuff? Did Mr. Groetsch accept the leadership of a Company without knowing it was being scutnized by the IRS. That does not fit the profile of an individual who's resume includes what we've found about so far. From the write ups I've seen Mr. Goetsch seems a well calculated person. So if there was funny business by his hands at Oryan then the record books of his other dealings might reveal a personal management pattern.
Don't get me wrong, your input is valued, please continue to add comments. I have no problem with you poking holes in my logic. The logic of entering into the NADN & Oryan adventure may be a tribute to failed logic. Gut instinct should have kept me out!!!!

Just when I thought it couldn't get any worse!
This is too much of a coincidence. This guy Porter was CEO at Wells Fargo the same bank that NADN used for its corp. clients. In 2003 he moved to WMC Mortgage Corp.

Wells Fargo Links:
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http://www.wellsfargo.com/invest_relations/annual99/businesses/head
(nice picture of porter here)

http://www.wellsfargo.com/press/norwest20000627.jhtml?year=2000&_requestid=65686

http://www.foxpitt.com/Home/FPK_Pinehurst_Sept_23_24_2002_Conference.pdf

http://www.acorn.org/campaigns/pc.php?p=2277
(accuses Wells Fargo of predatory lending practices (surprise,surprise))
http://www.acorn.org/campaigns/pc.php?p=2280

WMC Mortgage Corp. Link:
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http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20031022005926&newsLang=en

http://www.homesalewizard.com/news/index.php?active=details&ID=37854

We have enough information on Porter, President of NADN, Oryan, Wells Fargo, do to a sort of this is your life episode. What should be his next position? President of License Plate Productions, Inc. at the California State Prison maybe. I'm just Fed Up.

To Anonymous-
When did Dan Porter start Oryan and for what periods was he president of Oryan? When was Coolidge president. I assume Goetsch was president from 9/02 - 7/04. Please advise. Thank you!

Anonymous is correct. This is funny stuff. Although you may not think it funny when you are held liable for defamation of character. You may have a safe haven on this forum, but if you make accusations you can't back up to other companies that you believe Coolidge, Porter, and Goetsch to be involved in, and you use your email account, or even a temp Yahoo or Hotmail account, the cookie crumbs lead to your door. You could have the wrong the person(s)and could do real damage to their lives. Even if you have the right person and your allegations have not been proven in court-- you are still liable and could lose your house, car, and other assets.

TO 7/27 2:04 posting:
Everyone is innocent until proven guilty but don't try to intimidate people from investigating and questioning the people that the Department of Justice has named as defandant's in their lawsuit, namely Coolidge, Porter and Goetsch. I believe the postings here are reiterations of factual information found on internet searches. We also have the right to hire private investigators.
I think you might in fact be Coolidge, Porter or Goetsch and scared to death. What are you scared of if you have done nothing wrong?

To 7/27 2:04 posting:
Sometimes you need to use cookie crumbs to draw the rodents out of their hidding places!

I saw a sign in a store that comes to mind now:
"The louder he spoke of his honor, the faster we counted our spoons."
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Not everyone named "Elvis" owned a mansion named "Graceland", but the old saying goes, "If it looks like a duck,...."
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I have contacted some of the companies where the names of these "pillars of society" appear as officials, but so far, no replies. I believe the people working with and for them and their "customers" have a right to know about them -- we were not afforded that warning beforehand. These are not common names, so the odds of their not being the same individuals are pretty remote -- prove me wrong. If they are one and the same, answer the mail. If not, help us clear your names -- they are being slandered by your namesakes at NADN and Oryan Management.
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Take umbrage if you are offended -- see you in court (the DOJ, FTC, IRS, a few Attorneys General, the Bankruptcy Court, our lawyers, and a few hundred thousand "former clients" have a few questions to ask you).
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....bring your checkbooks.
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There is a saying: "If the shoe fits .....". These individuals ruined many lives. They already took all of their assets. There is nothing left to take.

It's not uncommon to question the integrity and knowledge of former leaders at failed companies. (eg., Enron) The three named individuals were leaders at one time or another of two failed companies- NADN and/or Oryan Management. Victims want to make sure they don't lead others down the wrong path in the future. This has been very painful. If they are in any way guilty, I don't know how they can sleep with themselves at nite. If they are in any way guilty, may they never lead again and be brought to justice.

well the site is down now people...later Mallforall...

TO 7/27 2:04 posting:

You are right. You got it right away as did Anononymous. Much of this is funny stuff, it's parody, and joking around & cheap entertainment. Some of it is a kind of comic relief type of musing that you do to break the seriousness of our situation. We mean no harm to those who carry the same names as those affiliated with NADN, Tax Ready, Oryan, Advantage et al. In fact if these are not the same persons we invite them to hold their names in honor against their name twins that have caused these very postings. Opaobie is not the first and only one here that has not been answered by organizations carrying these peoples names. I do believe that there are enough postings in the "if these are the same people" category and the "my opinion" category that it is understood that there is a theoretical and hypothetical feel to these conversations here as well. In fact take this posting as a disclaimer.
Just to be clear... many of our finances and houses are at risk due to this mess already, so the threat of losing that little smidgen more is fairly empty. But thank-you for your concern and its too bad you weren't concerned back when you were at Oryan (opinionated assumption), when it counted (humor), and the malls were just right (more humor) and the ADA credit was acceptable by the IRS and simultaneously at Disneyland as an "E" ticket (Serious... not).
So now I have to worry about the Magic Kingdom taking my house and everything. I wonder what their Animatronics Lab can do for the Mall4All? I have a nominee for the hall of Presidents!!!! (If it is the same guy.)

Hey Victims Rights,

You weren't supposed to let anyone know about the Private Investigators, boy are they going to be mad about their cover being blown. This is going to cost us extra. I can't believe you did that. And now we'll be fighting amongst ourselves again. Who's side are you on? These Dicks from CPR Investigations have guarenteed to get our Men. But now we'll have to pay for the upgrade to Bronze Level clients. We are our own worst enemy.

And hey Joker, you screwed up a French word. The correct spelling is Smidgeon, and it refers to small provincial cookie crumbs used to draw the rodents out of their hidding places!

The Dan Porter listed from Wells Fargo is not the Dan Porter of Oryan. How many Dan(iel) Porters do you think there are in the world that are moderately successful?

I'm not protecting him but seriously do some research before you post.

You beat me to correcting the Smidgeon error. Grrrr....

Here is a recent post to rip off report. If it's true, it's just incredible that these guys are morphing into another variation of the same scam. Beware the sharks are still in the water!

Check with Better Business Bureau of Southern Nevada regarding Adam Mangabang (listed as the Resident Agent, Secretary and Treasurer of Allied Grantwriters of America, Inc. which is the owner of Allied Grants, he is one of thirteen individuals listed in a suit filed April 2004, in Washington, DC, by the Department of Justice against National Audit Defense Network, Inc. NADN was allegedly involved in selling fraudulent tax schemes, etc.

Because of the company's history being short, the questionable nature of it's principles and the use of the Las Vegas Chamber of Commerce to gain credibility as well as very "tricky" wording in the guarantees I did not choose to do business with them.

I just want others to do their "due diligence" before getting involved.

John
Eden, Utah
U.S.A.

I actually know Robert Goetsch of Hayward, CA and he has (to my knowledge) always lived the fine line between legal and aggressive tax schemes.

Given that, I find it very hard to believe that this scam is something he is surprised by--I have checked out these mall sites and always laugh when I do a search on books and the first book listed is > $3000!!! Oh sure, this site is really trying to sell products!!!!

To July 27, 2004 09:03 PM Post,
What is the likelihood that NADN and Wells Fargo had a very close business relationship and there are two different people named Daniel Porter who was President of each company. I'm not a betting man but I'm going to play lotto tomorrow. Why don't you show your so called research to contradict this finding.

I'm in favor of not hurting the innocent. Remember we are also innocent but are in a gray area of a danger to be hurt big time. We know how that feels. The truth will out soon enough. There will be the usual discovery/disclosure phase in any court action taken.
Could it hurt to try to contact the Daniel Porter at Wells Fargo? How would you know if you were getting a straight answer?
I suggest that until we are certain, that we label these namesakes as person(s) of interest or POI. The opposition is not being unfriendly with these cautions even though I don't think that anyone has crossed the line. Angry Guy said , "This is too much of a coincidence. This guy Porter was CEO at Wells Fargo...". "This guy Porter" pertains to the one showing up in those URLs that follow. I really don't see the defamation or liable.
Fed Up Guy brings up a good point about the 09:03 PM Post. That person either knows both Daniels, knows the picture of the Wells Fargo Daniel doesn't match the Oryan Daniel, is lying, or is Daniel. (did I forget anything?)
As mentioned earlier, there are a few reporters that have shown interest in this story. Maybe they can be our eyes.

...Mr. Green in the parlor with a candle stick...
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Maybe some of the reporters are finding something that makes them back away from digging too deeply.
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Hello, I'd like to speak to a Mr. "Bennington". Oh? er, uh, no, no message. Thank you.
....

Deep Throat,
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Would you have your friend Mr. Robert Goetsch of Hayward, CA, contact me. You can do the introductions. I have a few questions for him. If you will contact me through my website and give me a way to contact you, we can hold a three-way -- make that a six-way, there are a few other folks I want in on the conversation
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After reading the recent posts I see two issues.

1. Assumptions based on names alone.
2. Confirmations of those assumptions.

I checked out the pictures and Dan Porter Oryan is not Dan Porter Wells Fargo. Give the Wells Fargo "Dan" a call, I'm sure he can use some stress in his life of being wrongly assumed.

Thanks for doing the research, Joseph. It's easy to do the search part; the confirmation part is the most critical. There's a Dan Porter in Missouri who kidnapped his kids, too. Maybe we should contact all the Dan Porters we can and enlist them to help us locate the real Dan Porter who has slandered their good name.
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Actually, the Wells Fargo Dan might appreciate knowing about the other Dan. Maybe some of the missing money is in his bank, too.
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...next we can start pursuing everyone named Cort Christie and Robert D. Goetsch and .......
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...we really don't care who signs our refund checks...
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...do any of you knotthole peekers recognize the name "Ursula Huber-Rea"? Don't get your Fruit-of-the-Looms in a wad; I am not making any accusations or slandering her in any way -- just asking "you know who" in case s/he happens to be monitoring the posts.
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...come, Watson, we have work to do.....
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If it's easy to do the search part why include someone other than the real person simply because they have the same name?

...Hello? Yeah, that's my name. No, you're looking for the short fat guy. Yeah, I get calls for him all the time. His number is ......
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...might work to make a few calls or send a few polite emails.
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...we do need to be careful, and, for the record, the admonition is noted.
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Joseph,
Please provide the link that shows the picture of Dan Porter from Oryan. Also, What is the coincidence that they all have the middle initial of "W". By now you must have searched on "Daniel W. Porter" and gotten the DOJ injunction along with the Wells Fargo links. NADN's corp. bank was Wells Fargo. It was worth a look. Besides how would we get someone like you to straighten this out for us unless we posted our suspicions here. Thanks for your help. You did not say that the Porter from NADN and the Porter from Wells Fargo are not the same individual unless you are confirming that the Porter from Oryan and the Porter from NADN are the same. Do you know if the Porter of NADN and Oryan are the same. Apparently, Anonymous who is an ex-employee of Oryan beleives that the Porter of Oryan is the Porter of NADN. If that's true then it was just a coincidence that there were two separate people named "Daniel W. Porter" working at NADN and Wells Fargo during the same period of time that malls and corp. services were sold. Now "Joseph" I know you are going to say that I am jumping to conclusions again, but by chance, are you "Joseph M. Prokop from Mt. Baldy" that is also named in the lawsuit with "Daniel W. Porter". In fact, if you are the same "Joseph" you must be pretty important to warrant your separate injunction from the rest.

To Anonymous-
When did Dan Porter start Oryan and for what periods was he president of Oryan? When was Coolidge president. I assume Goetsch was president from 9/02 - 7/04. Please advise. Thank you!

Hehehe...now there are 2 separate anonymous's posting on this board, the other one whom I'm not sure of identity I believe is credible though (I have some theories though). However Dan Porter of Oryan = Dan Porter of NADN. Dan Porter of both ~ Dan Porter of Wells fargo (or not sure if they are the same, can't confirm or deny, maybe our other faceless one can).

To all Victims-
When NADN or Oryan sold you the mall, did they ever tell you they were running out of zipcodes? I was told they ran out of zipcodes for Shop n 2000, so they had to offer a new name: "Mall for All".
I was also told by Brian Ross at end of 2003 that they were switching from zip codes to access codes, so they did'nt have to be limited to number of zipcodes. But my question centers around if they ever told you they ran out of zip codes; that they had a waiting list of people trying to buy the mall business and/or if they started offering "mall for all" name because they ran out of zip codes with Shopn2000. What do you know?

I am not Joseph M. Prokop...
Who said there was a image link to the Dan Porter of Oryan...
-------------------------
Seriously, think of your name, how many others are there that share a similar name? And of those others how many of them have links on the Internet.
By just looking at this board I'm willing to bet that searches of previous posters of people who may be using their real names, Mark Wright and R Marie, hits appear. Possibly for them but more than likely for others that share the same name.
What's with all the aliases? Why is Angry Guy, I'll Drive, the Joker, duh, Ben Dover and others just like them using handles? While I'm asking questions, how many years did you individually renew your malls? Not only that, but how many malls did you own? I know you're scared, afraid, wary, whatever, so thus the handles, so there's no need to list out the actual PIN numbers of the mall(s) just the raw numbers

M29905

When I made my last upgrade purchase in Feb 2004 I got another Mall for All number. When I called Brian Ross and asked him why I had another number instead of just a final upgrade he said something to the effect of "ran out of zipcodes" so we don't use them anymore, just a pin number or access code if you will. Dumb me, I just figured they swithched everything pertaining to my original mall for all to the new number. When I was finally able to get into my backoffice, I was pretty surprised to see two websites. Well, being the ever trusting person that I am, I certainly did not do my due diligence at any point in time. Had to learn the hard way! Also had purchased the gold hit generator, but never received any activity from this wonderful purchase or anything from the great "marketing plan" that I purchased. At least not having to take about 20 calls a day from those people has been a good side benefit of them going out of business. How does one company find so may liars to work for them?

NG

NG- thanks for the info. I agree with you, it's wonderful to no longer be bombarded with the multiple daily calls from the so called "tax experts". Hopefully anyone guilty of lying from NADN and Oryan will do some serious soul searching.

For the record, the lie I was told by Bryan Ross concerning having to purchase a new "MallForAll" instead of another "modification" to my ShopN2000 site was that "the tax law had changed and the new law required a new mall". Hey, I didn't even know NADN had filed for bankruptcy the previous year....they didn't bother to offer than info during any of the calls they made to sell me hit generators or marketing plans, either, so maybe next time I go to buy groceries I need to ask the lady at the checkout counter "has the store filed for bankruptcy yet?"
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...there is a limit to doing due diligence, but of course, that limit is reached much sooner when dealing with CRIMINALS.
.

I certainly had no idea they had filed for Chapter 11 either. It is amazing to me that they were not REQUIRED to notify their customers. It sure would have made all of us think before purchasing any more of their products, huh?

NG

Just some perspective on the cost of advertising on internet sites. Here is the cost schedule from just one fairly popular site (per sponsor):
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Text Link under "Sites to Check Out":
1 Month Home page text link $1,500
1 Month Internal pages text link $1,500
1 Month Home and Internal pages text link $2,500
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Banner Advertising on Our Home Page
125x125 pixel banner:
1 Week at $825
2 Weeks at $1,430
1 Month at $2,475
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If NADN and Oryan had been honest, we could have made money just from the advertising with no sales at all.
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IRS monitor, call your office.

Opaobie,
So are you saying that Oryan should have sold advertising on your mall at those, or similar, rates?
If that is what you meant then think about the following:
Oryan sells the 1 Month Home and Internal pages text link for $2,500, distributes the amount evenly to 15,000 customers, for round numbers, and each customer gets roughly $.16. or
Oryan sells the same link and forwards the full amount to one specific mall owner in order of purchase. 15,000 text links at that rate would have to be sold to pay each mall.
I don't think honesty is the issue honestly with your scenario. If it is then which scenario should they have used? The even distribution, or the first to last in line scenario? I think it's more tricky than we think.

Not at all. The rate I quoted was for only one sponsor advertising on one popular site. We don't know what rate Oryan was charging for sponsors, but they could have set it up in a number of ways, most specifically, for one core site with a portion to each mall owner, or for each site with different sponsors for each site. How many companies in the zipcode of the malls might have paid for an ad on the individual mall that had their zipcode if the price was right? It really isn't that complicated. How do you think your local barber shop gets to advertise on a program you see on your cable channel? It only is shown in your area, not nationally. Granted, the internet is not like a cable channel, but similar targeted advertising techniques could be used. How do search engines and "hit generators" optimize their advertising for their customers?
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My illustration was simply to show just ONE way Oryan could have tried to make money for the malls.

Does anyone know what happened at the meeting with the Bankruptcy Court on Monday?

NG

Joseph,
You said that you "checked out the pictures and Dan Porter Oryan is not Dan Porter Wells Fargo". Where is the picture of Dan Porter Oryan that you are referencing or do you know Dan Porter Oryan personally? For you I'll call myself "Joseph2". You are also missing my point. I'm not saying that I found a Dan Porter from Walmart who may be the same Dan Porter of Oryan. There is a distinct connection between NADN and Wells Fargo. Enough of a connection to checkout whether they are the same guy. This is "funny stuff", two different Daniel W. Porters working at NADN and Wells Fargo. I guess you beleive the Adam Mangabang (listed as the Resident Agent, Secretary and Treasurer of Allied Grantwriters of America, Inc. which is the owner of Allied Grants) is not same Adam Mangabang of NADN. Hey, must be thousands of Mangabangs with internet listings.

OK, when this is all over, whoever gets the book and movie rights has to share it with all the victims.
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DOJ and IRS spies, are you taking good notes?
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...there are just too many intersections of lives among the various involved companies for this to be just "coincidence".

It really doesn't matter that you call yourself Joseph2, even though I am flattered, no seriously, I am... Either way it's still a handle...
By pictures I meant the pictures on the Wells Fargo site from the previously posted links. That Dan W. Porter is not the one you're interested in. Your assumption about Adam Mangabang of Allied Grants (AG), like the Wells Fargo Dan, is incorrect. Incorrect that I assume they are the same person. While I think it is likely based on calls of the same nature from NADN and AG, I can neither confirm nor deny that they are one and the same in regards to Mangabang. With the Dan Porters however I can make that statement and be confident in it's accuracy.
There is such a thing as cyber-stalking and harassment. If you don't believe me look it up. Continued false accusations of someone being one and the same can results in very real lawsuits. I am not trying to take away from the issue of this board, I am merely simply trying to make you aware that typed words, just liked spoken words, can result in actions. With the right lawyer and possibly a few more inaccurate posts it'd be very easy for the mistaken Dan Porter to have a field day.
Find the real Dan, Adam or Santa and post what you will, but be sure you got the right guy...

...so if the WRONG Dan, Adam, or Santa gets miffed and files a lawsuit, can the plaintiffs also subpoena all the other Dans, Adams, and Santas to prove they are NOT the scoundrels and then let the court sort them all out? That way, we could get the RIGHT Dan, Adam, and Santa under oath in court and watch the feathers fly.
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any volunteer defendants?

Yeah they could in theory happen, maybe in Mexico, although chances are they would only subpoena the inaccurate/blatant poster. Ask your lawyer...

Joseph,
Your point about cyber-stalking and harassment is well taken. I am not an attorney and don't pretend to be one but the information we are referencing is in the public domain and we are only referencing what is already out there. I have been in contact with NADN and Wells Fargo. There is public information that both companies have had consumer complaints about them. This is part of the business. Dan, Adam and Santa put their names out there to get attention and possible additional business. From the point of view that I was a customer of both companies and both companies have had consumer complaints about them, I believe I can express my concern as a customer to the President of the company who happens to be named Daniel W. Porter. Come on, they even put their pictures out there on the internet. If you can't stand the heat, stay out of kitchen.

Joseph(s), wouldn't it stand to reason that the victims of this cruel system of scams would be the LAST ones on Earth to try to bring grief or stress into the lives of other innocent people?
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...probably don't even kick their dogs.
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Opaobie: I do agree with you for the most part that "the victims of this cruel system of scams would be the LAST ones on Earth to try to bring grief or stress into the lives of other innocent people." But sometimes people, even the good intentioned ones get the wrong person. Is it ok to reference names of those that you can prove wronged you? Yes. Is it wrong to continually reference someone who you are unable to prove at this time is the right person? For the most part it's a gray area, but not too gray. Look the main deal I have is simply verify beyond a shadow of a doubt that you are referencing the same person.
To kinda reference little Joseph - sometimes the fire in the kitchen is so great it consumes those around you until you are blinded by smoke. When the smoke clears you may find you burned the wrong person.

...as soon as they crawl out from under the rocks where they are hiding, let's give 'em a DNA test.
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So maybe in our quest we should not spread ourselves thin by hunting these people down until we handle our primary objectives of Getting Even. (great run on sentence, damn I feel good!)
I think that Oryan shutting down pretty much proves they existed on scam bucks. You know..... the money that the resellers like NADN "owed" them or "didn't" funnel to their proper corporate account at Wells Fargo (Is this where I'm supposed to use the disclaimer category "humor". Screw that I am an American, but it was funny wasn't it).
Do we also have to worry about suit by other legit. organizations named Oryan or NADN (Another NADN has something to do with the US Navy, there might be a Four Star General named Robert D. Goetsch there .. sorry buddy no "President" position in the Navy!!!) OK he's just a POI (Hawiian word).
Opaobie has a great idea (but he didn't copywrite it...) Let me expand...We should contact everyone and every organization with the same or similar name to get them to join us.

Also some of those organizations that do help the impaired may sympathize with what we were trying to do but were scamed out of. It would be hard for the Media to ignore them.
Wow, I always thought that my manifesto would be bigger than this!.. Back to Manifesto Class!!!
I am not a Spam-bot, but I do have a problem with cellulite.

Getting Even Guy is getting celebratory drunk... Bonvoyage Oryan. (Crap! that was French...... did I spell it right.... spank me Mortisha!)

Process Servers deliver Court papers to the proper individuals. That's how it goes. Name the Company, Business or individual in legal action, the rest is standard operating procedure.

...so, Posted by: at July 29, 2004 12:05 AM, can I put you down for $100 for the legal fund...need to PAY to have papers served...
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..."Donate" link is on my website, you can't miss it.
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Does anyone on this forum know about this "lawsuit" being initiated by an ex-employee of NADN? It was posted on the ripoff report site.

Rebuttal UPDATE Employee ..inside information
Submitted: 7/22/2004 7:17:00 PM Modified: 7/23/2004 12:19:58 AM

Class action suit for Fraud

next week July 28, 4PM another haring will be held and Lloyd George Federal Court House, LV Nevada on NADN. Executives, CEO Weston Coolige and Al Rodreguez will once again center stage for quesioning. During the last hearing it became apparent that both men raided the NADA financially through a series of bogus corporations providing services...not rendered. The employees attending were not surprised. I gentleman by the name of Jerome Howell conveyed Robert Bennington had talked to him two days before to set a meeting Monday. Bennington, Howell said was in very good sprit. Howell inferred Bennington may have been murdered which shocked the room. Howell also ask why as CEO Coolidge did not come to NADN office the day US Trustee shut them down considering he was very much aware and informed. " Why couldn't you face the people that work so dilligently for you?" Coolidge wimpered inaudible words. Later Howell ask: was your Bentley brought with our wages as well? After court proceedings in early March Coolidge apparently brought a $180,000 Bentley and refurbished NADN's phone boiler room.

Should you want to be put of the CONSUMER LAW SUIT against NADN please leave your full name, address, phone, the service you brought from NADN, the initial cost, and submit it to nadntax @ yahoo.com We are going after personal effects of all officers, executive directors, managers and contractors of NADN and affilliates. If we as employees and consumers can prove FRAUD then their personal assests can be seized. Corporate law does not protect you if fraud was commited.

There will be a small fee for administrative and filing work that I discuss after hearing July 28. It is my intent to prove fraud and as employees we are in the best position to do that.

A friend

Ex - Las Vegas, Nevada
U.S.A.

This was posted on www.legalnewswatch.com
This guy says that CPR is helping out with a civil suit against NADN.
Bradley says:
I just received a phone call from cpr buisness solutions who knew that i was once a member with the NADN and they are offerring a prepaid legal package and to hook me up with other NADN members in a civil action suit they are looking to carry out. They mentioned that Oryan management had closed it's doors and now the IRS was looking at the promissary notes as assets. They said they are making people pay these back in 90 days after contacting them. I received an e-mail previously stating they were being dissolved by Oryan management. Does anyone have any information about this CPR company to know if they are legit or just another Scam (they to are out of Nevada). Their website is www.cprbusinesssolutions.com. Any help would be appreciated. As of yet i have not joined there service.
Brad
Posted by: Bradley on July 27, 2004

Hey "Big" Joseph,
As I surf the internet I found a "bev from North Carolina" posting to at least five different NADN/ORYAN forums including this one. She has been pretty busy with researching and providing helpful information about our situation. Thank you, Bev(s). Could this be five different Bevs from North Carolina? The fact that I mention this, I am guilty of cyber-stalking? Just don't want to get into any more "trouble". By the way, what's your interest here? Are you a victim of NADN/ORYAN? In what way: customer, ex-employee, (alleged) subject of DOJ/IRS investigation?

July 29, 2004 07:09 AM Post,
Prepaid legal services! Is that anything like prepaid tax services and Audit protections services? Hell, put all your cash in unmarked bills an a brown paper bag and give it to me. I'll represent you in court in the future. Right after I get you in serious trouble then go out of business. That promissory note was written to be payable in 8 years not POD (payable on death) of Oryan. The agreed to note was based on the modification of the purchased website.

Point 1: If you did not own the website that you contracted for, then there was nothing to modify. You ended up sharing a Website.

Point 2: Even if you had owned the website at the time you signed the note, you were handed a pre-existing ADA/TEXT ONLY site. How can that be considered a modification? No action was taken hence nothing was modified.

Point 3: The ADA/TEXT ONLY did not meet the required standards even as a webpage and the implied compliance through the use of the Bobby Seal etc. was all show. At no time did this "modification" allow the impaired or any user to access the main mall by any means, nor was it a mirror image modification of the main mall adapted for accessibility.
I think that if the IRS had seized Oryan's "Assets" then you would have seen it Officially somewhere. Look's like the 90 day Promissory Note thing might be scare tactics not unlike "if you don't have more traffic to your website it won't hold up as a business... I've got these Hit Generators...". Why would you think that prepaid is better than the Class Action that Opaobie is organizing? Send your money to the Cooperative, that's prepaid and voluntary and nobody called you with scare tactics!

Joseph-
Can you please answer where you found a picture of the Dan Porter of Oryan to compare with the picture of Dan Porter at Wells Fargo? (referring to your 7/28 posting at 2:03 am). If you choose not to supply this information, I can conclude nothing other than you made this up. Please advise.

To Victims-
According to IRS documents,("Misuse of Disabled Access Credits - Virtual Mall Website - Q&A", www.irs.gov/business/small/article[do a search]) - "there is no possibility that a purchaser will ever be required to pay the note and such a note is considered to be invalid."

RMarie,
Thanks for picking this up. I thought I missed something but he didn't respond to my original question. "Big" Joseph said "By pictures I meant the pictures on the Wells Fargo site from the previously posted links. That Dan W. Porter is not the one you're interested in." but he didn't say which picture of the "alleged" Oryan Porter he was referring to.

Angry Guy & RMarie:
The reason I did not reference picture(s) of the Oryan Dan Porter is because there are no physical pictures of him that I am aware of on the Internet. If there are I am unaware of them.
Ok, so Bev from NC posted on five different sites, I'd bet she's the same person, but I wouldn't know. Never met, don't know what she looks like. It's very easy for someone to just start typing and attach a name to it.
Today I could be Joseph, then Opaobie, and then blank. It all depends on what I type into the little name field.
Look through my previous posts, detach yourself from your anger, and see that all I was doing was trying to help and let you know that you had the wrong guy.
So take that at what it is...

"Big" Joseph,
You are disappointing me! First you lecture us about making sure we need to find the "right" guy because you say we have the "wrong" guy but you won't say how you know definitely we have the "wrong" guy. Is it because you know what the "right" guy looks like? This is not a trick question. I'm deliberately not mentioning names because of all of that cyber-stalking stuff. You know what mean. "Funny stuff" Huh! When I communicate with you I am not "angry" anymore. I'm laughing!

Thoughts of disappointing you really don't rank high on my list of fears. In answer to your question I know what Dan Porter of Oryan looks like because I've seen him. While we're on it I know what Bob looks like, as well as Wes and Robert, and others from Oryan and NADN. If you were at the NADN/Oryan conference from a few months ago in Las Vegas as well as other events than you would too. Who knows maybe we sat next to each other, but chances are you didn't go - that was an assumption.
There is a difference between lecture and advice...

"Big" Joseph,
Thanks for clearing this up. How many posts did it take for you to just say that you know what he looks like from attending a conference. You know what they say when you assume: you make an ASS of U and ME. Anyway it's a pleasure to communicate with you. I'm assuming that you must be a "victim" like the rest of us since you were at a conference. Any other constructive information that you can provide is always greatly appreciated. By the way, since you went to a conference, do you live in Las Vegas? Are you attending the credior's meetings? Can you give us an update?

Personal Update on Filing Amended Return

Just talked with my CPA, who talked to the IRS agent that we have been working with.

His advice: The IRS will not allow any of the credits or expenses for the 2003, or 2002 returns at this time. Your individual agent may or may not charge the penalties. Interest, as stated before, is never forgiven. They will look at you much for favorably if you do not try to take the expense writeoff.

The IRS agent stated that once Oryan and NADN are both out of business (which they are) that they (the IRS) may then allow the business loss on future returns, possibly 2004 when filed. Your are only allowed a $3000 per year write off, so if you have invested more than that in the business (which I have) it will carry forward to future returns until satisfied.

I will now be sending in the check to the IRS and filing my amended 2002 returns when they are completed. Hey, he knows a lot more about this than most of us do. I will follow his advice and move on.

There is also little or no chance of recovery of any of our money from the bankruptcy as we know, but we still don't know about Oryan and companies.

If anyone has any better information, I would appreciate hearing about it now.

Hope this helps some of you, too.

NG

I do not believe that Dan Porter of Wells Fargo is the same as Dan Porter of Oryan.

However, Robert Goetsch (from Hayward, CA) of Students in Business and Beamentor.org is the same as the Robert Goetsch of Oryan. This is a FACT--therefore, no cyberstalking or libel issues...If you want to talk to him, try dialing information....or call SIB.

Big Joseph,
I thought that that conference didn't take place due to the chapter 7-11 shut down, not that I could have afforded the trip anyway. Was it crowded? Did they talk about the DOJ, IRS and Chapter 7 or 11 related problems?
For the record, Screen name and alias are two differant things, a "blank" might just be haste or indifference.

Gotta go....

This conference was easily 6 to 8 months ago. It was the introduction to the new mall before all the changes. I'd have to check my calendar as to when it specifically was.

Are the expenses associated with a meeting to discuss defrauding clients considered legitimate business deductions by the IRS?
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Enquiring minds want to know...
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In case you haven't looked lately at nvb.uscourt.gov

Subject:
Continued Meeting of Creditors
CONTINUED MEETING OF CREDITORS
Date: August 26, 2004
Time: 4:00 PM
Location: 600 Las Vegas Blvd South
Room 550
A continued meeting of creditors is scheduled for the date, time and location listed in this Notice. The
debtor’s representative must be present at the meeting to be questioned under oath by the trustee and
by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be
continued and concluded at a later date without further notice.

NG-
Thanks for sharing your tax learnings. Any idea where the potential $3000 max annual write off would be classified on the return--not a capital loss? on Schedule C? Or itemized and subject to amount over 2%? any idea?

NG-
Thanks for sharing your tax learnings. Any idea where the potential $3000 max annual write off would be classified on the return--not a capital loss? on Schedule C? Or itemized and subject to amount over 2%? any idea?

Joseph- Did you ever see a picture or meet Dan Porter of Wells Fargo to know for sure he is not the same Dan Porter you saw at a NADN conference?

RMarie,

I think it is a capital loss, but I am not sure. I guess I didn't care at this point, since nothing can be done (maybe) until next year when we file for 2004. We all still have to wait for the IRS final rulings, which will probably not happen until after the rest of the proceedings. It is anybody's guess what the final outcome might be. Sorry I can't be of more immediate help, but will try to ask that question next week when I talk to the CPA again.
NG

RMarie - Yes I saw the photos from the Wells Fargo site.

Opaobie,

I haven't posted much in a while, I barely have time to check my email, so I'm not putting my name for "posted as". I have taken on the unsavory task of working extra to pay for the anticipated tax & legal crap. I did post the Process Server thing. My MOM, AKA Pistol Packin' Mama, was a Process Server in New York State (Nobody expects a little old lady). I plan on doing better than that $100 soon, and no you didn't shame me into that, it is in the plans. Honest money is just hard to come by, but the dishonest money that these guys got us into is very expensive!!!!

RMarie,
Earlier I told "Big" Joseph that I'm not an attorney. I am also not a tax preparer either but I think you would need to use form 4684 - Casualties & Thefts. This form is used for both personal and business thefts. Section B is for business thefts. When I used my version of TaxACT 2003, (you can download the federal version free), I noticed that form 4797 - Sale of Business Property - got filled in too. Just for fun, this is "funny stuff", I put the full amount of my loss on form 4684 which is much greater than $3,000, I am still in shock from this whole mess so I can't even type the correct numbers here. TaxACT transferred the full amount of my loss to line 14 - Other gains or losses - on my 1040 form. I beleive the earlier post is correct that the loss will have to wait until tax year 2004. I plan to look more closely at how TaxACT 2003 did this but it allowed the full amount of my loss, not a $3,000 cap, to be deducted on my 1040 return. If there are any IRS people or people more knowledgeable than me in these tax matters monitoring this forum then please post anonymously to corroborate the accuracy of my post.

Posted by: at July 30, 2004 11:04 PM Just take care of your mother and your family and don't worry about donating to the legal fund. If some of the managers at NADN and Oryan want to pick up some of the tab, that would be fine. A better idea would be for them to start writing refund checks.

Angry Guy, TaxAct software was written by real experts, not crooks like at NADN or moron flunkies who write "Q&A"s at the IRS who don't give a correct answer 4 out of 5 times, so trust the answer it gives you. TaxAct staff also consult with experts like JK Lasser and the lawyers at the IRS to make sure it is correct and gives you every deduction allowed IN ACCORDANCE WITH THE LAW. It even allows you to update the software from inside the program as you run it to include last minute tax law changes before you file. If you have any questions, use the built-in Help and adviser, and also contact them through their site or at their 800 number.
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I am trying to gather opinions from several of the country's finest tax experts regarding how to file the amended returns and what IS and what IS NOT allowable and HOW to report it. As soon as I get their opinions, I will post them and also send them to the CALC list.
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Thanks to everyone who is working independently to help us determine what is the best LEGAL course to follow. We do not want to antagonize the IRS, but we do not have to roll over and let them take additional taxes from us to which they are not entitled. NEVER FORGET, former IRS "EXPERTS" created NADN and scammed us in the first place.

RMarie,
You seem to be trying to create a timeline of who was President of which company during which period of time. The attached information still comes up on the internet. It gives you a name, title, and date. Who knows, maybe the phone number is still active. If he answers, let him know we are still waiting to hear from him. Good Luck!

From: DANIEL in response to Message 1 Sent: 4/29/2000 7:14 PM
Consider giving me a call, 909-628-0824. I can help you reach the disabled marketplace. Our firm Oryan Management and Financial has a tax incentive program for American .coms that wish to become accessible to the blind and disabled community. Our ADAco-op site will present your site, and those of your vendors, on a mirrored site concept.

According to Newsweek April 4,2000, less than 2% of all websites are accessible to the disable. yet 44%of the goods purchased on the internet are purchased by the disabled. Our firm can help you get tax credit incentives and present your site in this alternative format, you still maintain your site in it's graphic format, for the disabled.

Daniel Porter. President

ShopN2000.net

ADAco-op

Oryan Management and Financial Services

Opaobie,
Now that you mention it, I thought I read that TaxACT guarantees its calculations. My interpretation would be that as long as the amount of the business theft is correct, once I enter it into TaxACT, then TaxACT would guarantee the tax liability it determines. If TaxACT doesn't cap the amount then it seems that TaxACT would guarantee its results. I plan to purchase TaxACT to get the support and state version. Thank you for all of your hard work. If I can be of any assistance to you let me know. I may to able to search for tax cases on the lexis online service. I have done some research but haven't found anything that looks helpful to us yet. If you or someone can recommend a topic to research that would help us then I would be glad to try it.

This post is about the cyber stalking post:

I am the Bev from NC that has posted at many different sites concerning NADN and Oryan Management. I didn't realize I posted at so many sites but I will continue to do so until someone starts listening and doing something to help out the victims in this situation (and that is us). I do share information at different sites when I find something of interested to others. It would be so much easier if there was one main site for everyone to go to ( I have been sharing this site with others). But since there is not I will post as much as I can.

Bev,
You are one of the many diligent people around the web trying to right this wrong. It is obvious to me that you also applied the same energy to your web business but were doomed by the same inherent problem(s)that we all faced. It is unfair to try so hard and get so screwed. Now that we are turning the tables, there seems to be some defensive elements happening from the NADN & Oryan camp as the Yin and Yang seek balance. I find it funny that the letter of the law has become important to some of these people. Too bad that didn't happen at the beginning of our story. I do not support cyber stalking and I obviously do not support the stalking like method used to sell the websites and related products. The difference that I see is that an innocent might unintentionally be harmed by us trying to connect the dots to a certain named person which contrasts the intentionally aggressive method used to push the NADN & Oryan collection of time wasting, money sucking, people hurting, and as we are seeing via these law suits, illegal Tax and Business products. Take any attack that you may encounter about your "getting around" as validation that you are on the right track. You are not a "thorn" in our side.

I am not in favor of cyber stalking either, but I am in favor of making sure the past does follow many of these guys around. If they continued to push their scam-products while being investigated and ordered not to, I think that they will continue with other new scams as we've seen with the NADN Call List Gang. As responsible citizens we need to make sure that others don't get hit, like we did, somehow. I believe that making people aware of these activities, even to people with the same name, is a must. I am not in favor of recklessness due to anger, but well thought out warnings need to get away from this page and into the mainstream.

just got home (gone several weeks) IRS has sent me a bill for $300. (LATE FILING PENALTY) I paid $5,000.00 to NADN for 10 years tax prep. I have a C corp for my trucking business and then a LLC under that. I sent my taxes to them by Feb. 28. kept calling when i hadn't heard from them by March 31. could not get thru came home and started calling hourly leaving messages every day then finally someone asnwers says they filled an extension. i called IRS to verify that my personal and corp taxes had recieved the extention. YES the IRS says. i then learn NADN is shut down i get my tax paper go to local cpa and file my personal,c corp,llc taxes. Now this bill!! just shoot me!!

sure this thought will not pan out either. i bought two keyword generator's in march. that was less than 6 months ago @ $2,ooo. each. that service was for 1 year. bet they want send back the 6 months not used. i have emailed them but it is sunday so sure i want hear any thing for days if at all.

karen/FL, You might want to take the confirmation from the IRS that you had been granted an extension and mail it to the IRS address where you are supposed to send the $300. If you don't have a confirmation in writing, did you receive a confirmation number and a name of the IRS person you talked to? As a last resort, you could write a letter explaining all that has happened including the steps you have taken and ask them to honor the verbal confirmation you received on your extension. There should be some way for them to understand the uniqueness of your situation (and thousands of the rest of us) and the extraordinary steps we are having to take just to file returns as a result of NADN's closing abruptly holding OUR documents. Make your CPA earn his money.

Here's the Goetsch Family trying to hunt each other down. Nobody has mentioned Oryan Management yet!!!!

http://www.goetsch.com/guestbook/index.php

...well, not exactly, although "someone we all know and love"...OK, someone not known for being shy BUT NOT a stalker,...may have sent a discreet inquiry via email....
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...best not to flood this poor guestbook. That could prove VERY counterproductive.

Here is another "coincidence". Found this internet listing of RDG at PCI Group. RDG was making a presentation on Project Management. It's an old listing but if it's the same RDG it is interesting how these individuals moved around in the same "circles". The NADN and PCI Group offices are a short distance from each other. Looks like only a few blocks apart on Mapquest. Don't know if RDG is still at PCI. I guess someone can give them a call (Opaobie?). Maybe the person that "knows" RDG can confirm this is the same RDG.

"The Three Cornerstones of an Organizational Project Management Implementation", Denis P. Couture, PMP, President, The PCI Group and Robert D. Goetsch, The PCI Group
http://www.pcigrp.com/contact/maps.htm

NADN office address is 4330 South Valley View Blvd. Las Vegas NV 89103 702-579-9812 (fax)
PCI Group office address is 3351 S. Highland Dr. #210 Las Vegas, NV 89109 702-693-6560

Mall 20032 and 63031 (not that it matters):

I have been out of town for a week, and much has been posted here in the interim. I, too, got a note from Julia Thompson, tax specialist (while I was gone) telling me that the IRS has MANDATED that we amend tax returns for 2002 and 2003 (and penalties and interest may be less if we do it voluntarily, but I was also disgruntled that she had my name and address!) So can anyone tell me, is this mandate OFFICIAL? Since no one here has said they got the same message, I thought I would check here before acting further at this time. I plan to amend my return, of course, but was waiting for the other shoe to drop so I know what I can and cannot claim as legal expense (are they disallowing ALL actual out-of-pocket cash that NADN stole? What about the money paid to do taxes that have not been done--nothing to do with Mall4All/ShopNMall?). I purchased TurboTax Premiere to do my 2002 taxes (the 2003 have not yet gone in, as I never got paperwork back from NADN and refuse to pay $100 to get them, so I'm trying to recreate everything), I claimed the actual out-of-pocket expense for NADN (which was just over $3,000 for 2002) in the Turbo TAx program, but I also had a loss on another business that equalled more than $3,000. Both were allowed by Turbo Tax. Is it $3,000 per business or total? Does anyone know? I am now having second thoughts and may want a CPA to help, but I've lost (as you all have) so much in this fiasco I just hate throwing in more money after the bad. I don't know if any of you are like me, but I am also embarrassed (I know most people in this town) to go to someone for help and admit what a fool I was. I also have no idea WHO else I can trust at this point. On the other hand, I don't want to roll over and play dead and just hand the IRS the rest of my life, either. This site is informative, so if anyone knows whether or not we MUST (for sure) file amended returns voluntarily now, can you direct me to a link that says as much and how to go about it? Thanks all!

This site has been a godsend for those of us floundering with fear and uncertainty. I don't see how we can ever get EVEN with the NADN/Oryan "folks" after all this, but I'm sure wanting to try! Can we also sue for the wrinkles and gray hair and sour marriages they have caused in addition to the financial ruin? I have always thought of myself as so prudent (I don't buy anything until I check it out thoroughly, which I thought I did this time, too). They need to be in prison, because if I can be duped after the research and questions I investigated, they are REALLY GOOD at what they do, and MUST be stopped forever! No more spin off or clone businesses set up to make them rich and the people devastated in their wake.

I was just invited to visit this site:
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http://www.bizhelpforum.com/
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and join the forum. I haven't had time to check it out, but maybe someone there could provide some help. They also have a fourm:
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http://www.bizhelpforum.com/forum/
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As always, be careful and check it out before you take any advice from anyone.

So far it seems that the IRS is just concerned about 2002 and 2003. Are we to be concerned about 2001?

Here is some more information regarding bad debt losses. I am trying to find out if the full amount of business bad debt losses can be deducted, and if so, how (Schedule C?).
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Generally, a business bad debt is one that comes from operating your trade or business. You can deduct business bad debts on your business tax return.

Nonbusiness bad debt is deducted as a short-term capital loss on Schedule D. You may claim a loss from bad debt only in the year the debt becomes totally worthless. If you have a loss from a nonbusiness bad debt, you deduct it from capital gains, if any, and $3,000 of other income. Any excess is deductible as a capital loss carryover in later years. You may not deduct partially worthless nonbusiness bad debts. The debt must be totally worthless.

The following IRS publications may provide some assistance:

http://www.irs.gov/pub/irs-pdf/p529.pdf
http://www.irs.gov/pub/irs-pdf/p535.pdf
http://www.irs.gov/pub/irs-pdf/p550.pdf

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It is clear why the IRS wants us to claim the loss as a "non-business" loss because of the $3000 cap per year and force us to carry the rest out over several years. Sorry, to me, it was a business loss because I wasn't loaning money to some derelect, I was purchasing an online business. You can file it whatever way you want. Those who have already been in contact with the IRS say the IRS has told them they will be more "lenient" with those who amend their returns "voluntarily" and do NOT claim any of the mall expenses. That way, they get more taxes out of us and we have to wait until the mall business is officially declared a "fraud" before we can even begin to claim the "non-business" loss with the $3000 cap -- no sooner for sure than the 2004 returns.
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I am still working on a way to make them change that position or at least to build a case for appeals.
....GRRRRRRRRRRRRRRRRRRRRRRRRR!
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I sure hope the Speaker of the House of Representatives hurries up with introducing legislation to eliminate the IRS.
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TO Angry Guy and Opaobie,
So if it ends up being a "non-Business" loss on Schedule D - is that the same $3000 cap we have for Stock Losses? (I don't know about you but I'm still carrying over stock losses from a few years ago when the market crashed.)
If it ends up being a "Theft Loss" (form 4684) is that subject to the amount that exceeds 2% of your income? For people with higher incomes this is not a good option.
thanks

Ok you people need to just go bacxk to work , make some more money and stop bitching the thing i hated about selling you people at NADN is the complaining , Whining , Crying and the best part the way the customer lies you guys all need to just drop it and work your HBB that i sold you or go sell amway or find another way to cheat the IRS becaus ethats all you guys said " As long as i dont have to pay the IRS Ill do anything " So i hope the IRS comes after you guys and audits all of you
Mark

Check this out-----what a crock!
http://www.et-dialhome.net/kels/NADN/guestbook.html

TO Mark You Know Who-
What's your problem-stop putting words in my mouth. We have been victims of fraud- show some remorse.

Why the (peep) does the IRS make everything so horribly complicated??? We should be able to file any kind of taxes (as required by law) for cipes sake, without paying another couple grand to undo what we already paid NADN for!!! I thought it was Internal Revenue SERVICE. Service?? Assistance should be free and easily accessible without needing to read 10 books on tax codes! Where to claim what, cut off limits, etc., should all be straight forward and easy to understand without a PhD in finance. I guess that is why so many folks just take standard deductions when they could earn so much more in tax credits. Ease. I did it for years because, frankly, I DON'T know the laws and have no interest in them. That is what I THOUGHT I paid NADN to do! But I refuse to roll over and say "thank you" and pay for it again or pay more tax just because it is easier! I certainly feel I should pay my share (but so should big business!) but I shouldn't pay others' shares! Did I mention that when I went over my 2002 taxes the bimbo who did them--I know I should have checked closer--under claimed by $3,000 what I actually had W-2s for? In this case, I am glad, as I have $3,000 more paid than I thought, and it should help counter the ADA/Mall credits taken. If I thought it would be enough, I'd just put this away and let them audit me. But this $3,000 business loss "limit" is crazy. The money was stolen through fraud, and even our "penalties" should be related theft fines (like someone pays an attorney to get them out of trouble and it IS tax deductible!) The fines/interest/penalties are also theft losses! We sure aren't going to get any of it back! It isn't a one-year-bad time in an otherwise thriving business (although we thought it would be)! The errors on my 2002 NADN return are many, and they were supposed to be tax experts, so as has been said before, WHO can we trust? These jerks couldn't even read a W-2 and add!!! Doesn't give me a lot of hope for services even before all this cropped up with ADA fraud. I guess a sham is a sham throughout. Can't we just put in a whole new tax return if there are errors throughout? As my kids would say, "Overs!"

Edit as you see fit, but anyone in the 14th district of Illinois might want to write to him. The rest of us can write to our own member of Congress.
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Dear Mr. Speaker,
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I am writing to you in support of your efforts to reform our tax system and eliminate the IRS. If you need a good reason, please visit the following URL and read a synopsis of tragedy on a monumental scale. Hundreds of thousands of good people are facing financial ruin simply for following the advice of former IRS "tax experts". Only intervention by the Congress can resolve this dilemma.
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http://www.opaobie.com/Synopsis.html
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With Highest Regards,
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(your name)
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===============================
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Thank you very much for contacting my office about an issue that I know concerns you greatly. Please know that I have acknowledged and registered your opinion, and greatly appreciate hearing your views.
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At this time, I am only able to respond to residents of the 14th Congressional District of Illinois. As a result, If you reside outside the 14th District of Illinois, I would encourage you to also contact your Representative directly to express your views. You may do so by visiting
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http://www.house.gov/writerep/
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and entering your zip code.
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Thank you once again. Your comments are an integral part of the political process. Without them, I would not be able to make the decisions that affect our community and our nation.
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Speaker J. Dennis Hastert
235 Cannon House Office Building
Washington, DC 20515
(202) 225-2976
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===================================
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Mark You Know Who, that's a pretty callous attitude. Let's pull the "sale confirmation" tapes and see what we said. Don't throw rocks at a hornets nest unless you can stand getting "stung".

Mark? Are you trying to be funny? It didn't take.

...NADN Guestbook entries are probably fakes. I sent email to the ones listed and several have already bounced....
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just a little more evidence of fraud to add to the pile.

Some of you are already receiving notices from the IRS. May I suggest a few questions for the auditor? Be polite but you can also ask for clarification. If you have a tax expert to consult with, share this with him before you do anything.
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Nothing I am suggesting is out of order considering the amount of money involved and the bad advice we all were given by former IRS "tax experts". We have a right to accurate and precise answers from the IRS and references to specific tax code paragraphs being applied to deny deductions on our returns, considering the complexity of the situation causing us to have to amend our returns. There is some risk in that if the auditor gets mad at you, s/he could impose the highest interest rate and even add penalties, but if such action is determined to be retribution against you for simply questioning the rules being applied, you have grounds for an appeal and for disciplinary action against the auditor for misusing his authority. Don't let the auditor intimidate you.
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I went over some more of my notes and emails from tax attorneys and experts and came up with some thoughts. Do NOT antagonize the IRS auditor, but POLITELY ask him/her to cite the specific tax code paragraphs he is using to deny your entire loss claim as a legitimate business loss, not just the ADA credits.
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The ADA modifications are a different matter and you can agree with the auditor that you now have sufficient information to believe the malls do not qualify for the ADA credits. For that reason you are part of a group filing a lawsuit against Oryan Management, the company you paid to modify and operate the online shopping mall, for failing to honor their contract to implement the ADA modifications. You can agree that the ADA credits should not be included in the amended returns because they were never completed, but you still have questions about the downpayment and any other advertising or hit generator expenses pertaining to the malls themselves as a legitimate online business.
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Ask the auditor how he determined that the online shopping mall business does not qualify as a business since sales of merchandise were transacted and recorded in your back office. If you have confirmation of sales, have them available to verify that sales actually took place. Don't let the auditor brush you off or ignore your request for precise answers. You have to provide them to the auditor, and you have every right to expect them from the auditor. Insist on knowing the exact tax code paragraphs, not just the auditor's interpretation or generalizations. Not knowing the exact tax code paragraphs beforehand and trusting the advice of former IRS "tax experts" and taking them at their word got you into this situation. You do not intend to let it happen again. Since you are being required to sign an amended tax return under penalty of law if it is not correct, you do not want to make a mistake, and you do not want to have to amend it again after the final rulings come out about NADN and Oryan Management. You also have a right to take every legal deduction, and you want to be sure you are not omiting any that you should be allowed by law to take. The only way you can be sure is to know exactly what law applies, exactly what it says, and where to find it in the tax code. You also need this information so that in the future, if another business offer is made to you, you will be able to evaluate it against those specific tax code paragraphs to make sure it complies with the tax laws so you can be certain expenses associated with it will not be rejected on a future income tax return or reject the offer if it does not meet the requirements.
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Bottom line: What chapter and verse of the tax code declares that the malls cannot be considered a business that simply did not succeed? If there is a list of questions that must be answered to determine whether it is a business, ask for them and some time to provide answers to them. It's one thing to say this was a lousy business investment -- businesses fail every year; it is another to say the malls never were a business investment at all. I respectfully ask that the IRS prove it by citing the applicable law. We are certainly paying enough to expect complete and thorough answers.
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For anyone who thinks this undermines our lawsuit against Oryan Management, it does not. If the IRS declares the malls were NEVER a legitimate business and can cite the tax law to prove it, we have criminal fraud grounds for suit against Oryan Management. If the malls can be accepted as a legitimate business and the expenses deducted, we still have grounds for lawsuit against Oryan Management for breach of contract since they never made the modifications promised in the contract.

M14224 (Not that it matters)

I just caught up on the postings here. So let me harp on this. Incomplete or not, if everyone was sold something by Oryan where is it? Did they close up without distributing the product to the owners? I did not see any update from Oryan covering that issue. If the products existed then an effort should have been made to get them to the rightful owners. I think you know where I'm going with this...
Mark You Know Who, You operate on false logic. For everyone to fit your description that you gave of NADN clients, everyone would have to know you were carrying out a scam. How can you think that anyone would willingly do that with their money. The people here came to NADN for legal tax advise, prep & stratagies. Those things do exist. It seems you knew you were intentionally scamming people and defend that action. Maybe you should go back and read NADN's literature on what they were supposed to do for clients. You obviously were clueless.

Hey Mark You Know Who,
This is one of your 12 step buddies. We knew this would happen when you stopped your medication and stopped attending the meetings. We all know you have a HUGH amount of GUILT for contributing to the demise of Robert Benningtion and the thousands of innocent NADN victims. We admit you are very good at what you do by manipulating decent people to trust you then take advantage of them. Actually it doesn't take much effort when people are vulnerable because of their personal hardships. You are experiencing a common behavior of transferring your ENORMOUS amount of GUILT to the VICTIM. This is also the behavior of a person who has a small "willy" but that's beside the point. Right now you probably feel that these thousands of NADN victims of a result of your GREED deserve their pain. We understand. We are here for you. Get back on your medication and come back to therapy so that we don't read in the Las Vegas Sun that "A Top NADN salesman who ripped off thousands of customers was found ......".

Mark You Know Who,
Maybe you should start a suppport group for ex-NADN and ex-Oryan employees who can't sleep at night waiting for the IRS/DOJ to come knocking on your door? You can start you own legal fund. Should fill pretty quickly with all of the money you made from the sale of the "alleged" scammed websites.

To All:
I found this website informatiive:
http://www.smbiz.com
There is an area called "Synopses of Tax Court Cases". These are current cases. It's dry reading but gives you some insight to how the IRS handles cases.

Mark, so can I put you down for a couple of hundred for the Class Act Legal fund? ..."Donate" Link is on my website....

Question posed to tax experts: If I made a $5000 downpayment to buy a business and the business failed during the year, or worse, the seller defrauded me and sold me a worthless business, could I deduct the entire $5000 as a business loss?
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Answer from tax experts: First I think we need to define a Bad Debt. A bad debt occurs when money was loaned to someone else and they do not repay the loan. This can be either a personal loan or a loan given within a business. A personal loan that goes bad is deductible on IRS Schedule D and is limited to the $3,000 cap. A loan given out of a business is fully deductible on the business return filed.
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In your situation as described it appears the $5,000 was not a loan so it would not fall under the Bad Debt rules. The $5,000 is an investment you made in buying a business. If you actually started the business and it failed and you lost your investment, then this would be a capital loss deductible on federal Schedule D and would be capped at the $3,000 loss limit per year, with the remaining carried over to future years.
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There is a provision in the IRS code for Theft losses where the entire business loss would be allowed to be deductible. This loss is claimed on IRS Form 4684 - Casualties and Thefts. The loss would be claimed in Section B of this form and would then flow to IRS Form 4797 and then to the 1040. To support a theft loss the taking of this property must be illegal under state law.
There have been many fraud and swindling cases on a state by state basis where certain states consider a crime of larceny by fraud has been committed if a person makes a promise in return for cash who never intended to return the funds or make good on the promise.
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The IRS Publication dealing with Casualties and Thefts is IRS Pub 547. Below is an excerpt from this Pub on Thefts:
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Theft
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A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent.
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Theft includes the taking of money or property by the following means.

Blackmail.
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Burglary.
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Embezzlement.
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Extortion.
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Kidnapping for ransom.
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Larceny.
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Robbery.
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The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law.
So based on this you would need to research your own state law to see if this fraud or misrepresentation is considered illegal under your state law. The burden of proof would then be on you to prove that a theft occurred and is illegal in your state. If this can be done then the full $5,000 would be deductible on IRS Form 4684.
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The deductibility of a loss will be determined on a facts and circumstances of each case since each situation is unique. I would review the above and then call the IRS to review your specific situation to determine the proper handling and reporting of this on your return.
You may call the IRS at the following number for assistance: 1-800-829-1040.
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RMarie,
With regards to your tax question, keep in mind I am not a tax preparer:
1) I'm not sure how you would get to schedule D. Are you treating it as an "investment" that you sold? I am assuming if you had the mall for several years when you amend your returns you would go back to year 1 and do a schedule D for each year. This sounds like it would be more difficult to defend than a theft loss.
2) Working with tax software, I found the full amount of a business theft loss on form 4684 goes to line 14 on your 1040. Your income gets reduced by the full amount of the business theft loss.
3) Using the same software, I found that personal theft loss is limited by 10% of your AGI. For example, if your loss is $12,000 and your AGI is $140,000 then your deduction would be zero. If your AGI is $100,000 then your deduction is $2,000. The $2,000 shows up on line 19 of schedule A.
I hope you find this helpful. As Opaobie mentioned, you can get prior years of TaxACT software for I think less than $20 for each year, it may be worth for you to get this software and try different scenarios with your data.

You can get to Schedule D in TaxAct by clicking on forms. Create a new one and then just let the Q&A guide you through it. There is also help all along the way to make sure you fill it in right.
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The illustrations posted so far show how complicated this can be and that there are several ways to honestly reach what we believe is the correct answer. I will try each one, see which one benefits me the most, and then submit that one when I finally file.
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Angry Guy, you might want to try both methods and see what the difference is in the final result and let us know.
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Working together we will get through this nightmare.
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I had a nice lengthy conversation with my state representative this morning, and he is going to look into it for us as well...that's just one of the many tasks we pay them for, so make them earn their money...same for your state senator and your federal member of Congress and your US Senators.
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To All:
In a nutshell, I think this will be our main challenge regarding whether it's a personal theft loss or business theft loss: Is the Mall a sham in addition to being fraud? I believe the DOJ permanent injunction against NADN and Oryan supports the position that fraud occurred. If only fraud occurred without a sham then the taxpayer's "intent to make a profit" or "profit motive" is factored into the decision to qualify the loss as a business loss. If the scheme is also considered a sham then the Court can ignore the taxpayer's "subjective" profit motive. The difference in personal and business could be no benefit or thousands of dollars in benefit.
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In the following case, 1994 U.S. Dist. LEXIS 6493, *; 73 A.F.T.R.2d (RIA) 2092 ALFRED S. CUMMIN and SYLVIA CUMMIN, Plaintiffs, v. UNITED STATES OF AMERICA, Defendant, the court determined the scheme to be a sham as well as fraudulent and denied the business loss.
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The Plaintiffs (taxpayers) relied on three cases in which individuals duped into investing in fraudulent schemes were held to be entitled to theft loss deductions under § 165. See Jensen v. Commissioner, 1993 Tax Ct. Memo LEXIS 404, 66 T.C.M. (CCH) 543, 1993 T.C. Memo 393 (1993); Bubb, Jr. v. United States, 93-2 U.S.T.C. P 50,572 (W.D.Pa. 1993); Becker v. United States, 92-2 U.S.T.C. P 50,409 (E.D.Wash. 1992). In these cases, the fact that there was no realistic potential for profit, or no real economic substance to the transaction (due to the fraudulent nature of the investment), did not prohibit the taxpayers from taking the § 165 deduction. In none of these cases, however, was there a suggestion that the fraudulent investment scheme was ostensibly operated as a tax shelter or some other form of sham.
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If anyone is interested in a copy of the actual cases send me an email and I will try to email you the cases as a word document.
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I think the backoffice component, linkshare connection for 260 stores, and emails and letters from Oryan describing the enhancements that would increase traffic and sales support the position that it's purpose was to make a profit.

To All:
I have been reminded that the IRS and DOJ have classified the malls as "shams".
Tax Courts use a "sham transaction theory" to identify schemes that are shams. The sham transaction theory is used to separate those "business transactions" entitled to deference from those which are not. It requires that business transactions meet a minimum threshold of a business purpose or economic objective. To be recognized for federal income tax purposes, a transaction must have a business purpose and economic substance apart from anticipated tax consequences. Business purpose is present where the investment is not motivated or shaped solely by tax avoidance features that have meaningless labels attached. In general, the test for business purpose involves an inquiry of the investor's subjective purposes for entering into the transaction. The Court has never held that the mere presence of an individual's profit objective will require them to recognize for tax purposes a transaction which lacks economic substance. The economic substance of a business transaction and the intent, purpose, or motive of an individual investor, while sometimes equated, are not identical. A business transaction by its very nature must have economic substance, that is, a realistic potential for profit ( James v. Commissioner, 87 T.C. at 924). The phrase "realistic potential for profit" does not mean that the transaction must make a profit or even that similar transactions generally are profitable. As we found in Abramson v. Commissioner, 86 T.C. 360 (1986), only an average of 1 film in 10 is successful; in wildcat oil drilling, the success rate based upon the number of wells drilled may be low. Realistic potential for profit is found, however, when the transaction is carefully conceived and planned in accordance with standards applicable to the particular industry, so that judged by those standards the hypothetical reasonable businessman would make the investment. The intent or purpose, which motivates an individual to enter into a business transaction refers to the subjective state of mind of the particular taxpayer before the Court.
The burden of proof is upon the taxpayers to demonstrate his business was an activity engaged in for profit for the purposes of I.R.C. § 162 (1954). U.S. Tax Ct. R. 142(a). In order to constitute a trade or business for purposes of § 162, the activity must be carried on in good faith, with the dominant hope and intent of making a profit. Determination of the profit objective is based upon all of the facts and circumstances. When a genuine multiple-party transaction with economic substance that is compelled or encouraged by business or regulatory realities, that is imbued with tax-independent considerations, and that is not shaped solely by tax-avoidance features to which meaningless labels are attached, the Government should honor the allocation of rights and duties effectuated by the parties.

**********************************************

LinkShare Mission Statement
LinkShare's mission is to drive the growth of electronic commerce by facilitating the creation of all types of profitable business partnerships, in whatever form these partnerships may take. By creating a marketplace in which all e-businesses can simply and easily partner with affiliated web sites willing to market and sell their goods and services, LinkShare is removing the complexity and confusion surrounding online marketing. LinkShare provides the vision and leading-edge technology and services that make this possible.

LinkShare is committed to giving its clients the competitive advantage they require in the rapidly changing world of electronic commerce, today and into the future.

**********************************************

KEYWORD GOLD CORPORATION

Keyword Gold Inc., is a three year old technology company that innovates, creates and markets new on-line and off-line applications. Keyword Gold Inc. owns and operates many web properties including Keyword Gold Card, a pay-per-click submission and management service for internet marketers.

The core business model of Keyword Gold Card is its role as a premier customer acquisition service for the pay per click search engine owners. These pay per click search engines provide free incentive credits for us to give to new prospective advertisers. Customer acquisition is very expensive and competition for new advertisers is keen. Keyword Gold Card levels the playing filed for new and smaller pay per click engines that don't have massive ad budgets to acquire new advertisers.

The success of Keyword Gold Card has been fantastic and well accepted with pay per click search engines and advertisers alike. By the end of first quarter of 2004, Keyword Gold Card will have over 150 pay per click search engine partners in its network offering over $4000 in free bid credit!

Pay Per Click advertising is the nets hottest advertising sector and Keyword Gold is the number one pay-per-click submission and management service! We have no competition in our industry and no other service comes close. We do not offer a cheap list of ppc's. What you will be offering is totally unique. We do the work for the advertiser in that we upload their title, description, keywords and initial bid amounts to all participating engines. Advertisers find the offer of instant listing on Pay Per Click search engines a real time saver not to mention the free value in bid credits that advertisers can use to hit the ground running!

*********************************************

We entered in good faith into a multiple-party relationship: NADN->Keyword Gold->Oryan->Linkshare->260 stores. Most of us are reasonable business people in our primary mode of business. The fact that so many people from different walks of life, truck drivers, CPAs, lawyers, etc, bought into this business illustrates its "reasonableness". It seems to me that the business transaction between all parties had an economic substance. We all wanted to make a profit. Oryan did not operate in a vacuum. It had a business relationship with Linkshare who had a business relationship with 260 stores. It is clear now that Oryan had serious problems with getting their product to perform to specifications. Putting the ADA issues aside, wouldn't the other Linkshare affiliates and merchants fail the econimic substance test and be considered sham's since Linkshare is ultimately "managing" their sales and commissions just like they "managed" our sales and commissions?
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In a smaller nutshell, We need to challenge the IRS and DOJ classification of the malls as "shams" if we are interested in the business theft loss.

Just counting the mall or malls you purchased how much do you think you lost to Oryan when all is said on done? I believe the average price paid was $2500 or so per mall per year.

3 malls 3 years about 7500

Just a reminder that our claim that we had an intent to make a profit is not dependent on Oryan's motives, only our own. Sufficient data was provided to prospective mall purchasers at the time of the sale to convince them the malls had the capability to produce revenue and to appeal to the prospective mall purchasers' "intent to make a profit" or "profit motive".
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Purchasing advertising and "hit generators" to increase traffic supports our claim that we took an active part in trying to operate the malls as a legitimate business. No one who intended to use the malls as just a "tax shelter" would pay additional money to promote a business they KNEW was not capable of generating revenue. Even if our investment in the malls can be shown to be a legitimate investment in a business that failed and the expenses deducted, we still have grounds for lawsuit against Oryan Management for breach of contract since they never made the modifications promised in the contract.

There was a section on everyone's home page about becoming a mall owner. It described in detailed how commissions are paid. I think this shows intent on the mall owner's part and Oryan's part to make a profit. You couldn't do a better job professing your intent to make a profit.

I too lost $7500 (3 years of upgrades)
The IRS thinks that the whole thing was set up for the tax benefits with no reasonable way of making money. DID ANYONE MAKE ANYTHING SIGNIFICANT BY WAY OF COMMISSIONS? Is that because it wasn't reasonable or by mistakes by Oryan (e.g., bad search function that would bring back $10,000 bouquet of flowers)? I know it was possible to make commissions but difficult. CAN SOMEONE CONTACT LINKSHARE FOR SUMMARY OF COMMISSIONS PAID TO MALL OWNERS IN TOTAL? Also "Disabled Access Virtual Malls" is on IRS's "DIRTY DOZEN" list. I spoke with two people- an Enrolled Agent and Tax Attorney. Both said it is a matter of time before we all are contacted by the IRS for repaying (if you gave Oryan your SS#). We are "easy Targets" for auditors. I understand their customer list was released to the IRS. Otherwise they will consider us guilty of filing "fraudulant" or "frivulous" tax returns. The Enrolled Agent said I can't include a Schedule C on my return (since I had no other business other than this.) The Tax Attorney, thought he could possibly fight the business expense but charges over $300 an hour to do it. I'm ready at this point to amend prior returns and remove Schedule C all together but still fight to have Business Expenses allowed (then amend again.). I'd rather do now to minimise penalties and interest; although part of me wants to wait and see if IRS issues new ruling.
This is a lesson from the school of hard knocks.

If nothing significant was made then why did you keep renewing? I've heard reports of people having multiple malls over 2 or 3 years.

Posted by: at August 4, 2004 05:26 PM, how long does it take for a starting business to become profitable, especially if modifications are "supposedly" being made during the entire period it is in operation? The fact that Oryan failed to live up to its end of the contract does not cancel our claim that we did everything we could to make the business profitable.
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...sure would be nice if everyone would use a screen name, even if it's phony so we can communicate.
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Dear Posted by: at August 4, 2004 04:54 PM
I was given advice by an EA at NADN. I even have the emails that have the nice EA after his last name to prove it. I was feeling pretty good about myself cause I got professional advice from EAs who are ex-IRS agents. Now look where we are. At least we meet one business criteria by being able to say we received "expert" tax advice. With regards to the Tax Attorney, if he is feeling pretty good about himself why don't you propose that he takes your case on an contingency basis which means he doesn't get paid unless he gets the IRS to allow your schedule C. Most personal injury attorneys get one-third of the settlement. Why don't you propose that he gets 25% of your Schedule C total expenses allowed by the IRS.
P.S. I just saw the Bourne Supremacy with my wife. We both loved it. It's her birthday. I'm just a romantic at heart!

M14224
Attention, Posted by: at August 4, 2004 05:26 PM, aside from Opaobies comments @ 5:27PM, you can see by reviewing the many posts on the internet that NADN/Oryan were indicating, from their "professional" position, that "you" as an individual were failing in some way, while the vast majority of their customers were successful. Although the mall ownership stopped at one in my household, the tactics and phone calls from Oryan/NADN never stopped unless they were asked to reply to questions about why things didn't look right. NADN for example did not respond to tax questions about home office and related expenses for our 2002 returns. They said they would, but never sent an itemized invoice for purchases so we could break them down and allocate figures to the proper line on the NADN 2002 Tax prep questionaire. They ended up filling those blanks themselves and finising our return from their records and on an extention without ever sending that invoice.
NADN/Oryan called with, or put out, info touting commissions and advertising revenue. They said that we would have write offs/deductions for "rent, utilities, telephone, automobile expenses, entertainment, and more...". They also were supposed to teach us the "secrets of leverage", which they said was a multi year way of spreading debt, or something like that. I think these concepts clouded the picture for many people who bought multiple "websites". On top of that the IRS recognizes that businesses don't always make a profit and uses a 5 year formula (correct me if I am wrong) that determines if you are running a business or a hobby.
So... we now know that when NADN/Oryan told you that everyone else was making money/commissions it wasn't true. Therefore because of that sort of statement people did believe that it was a viable business, but they weren't good at it yet.
It is my personal opinion that if anyone was greatly successful with these malls, it is because the traffic that everyone was bringing in was being grabbed and funneled to those successful ones. As has been said before, the ADA modification was easy to cover, because it was understood that the impaired needed special software to read the page and you didn't have that software. Again NADN had some good lip service and credentials back then and Oryan's product had their seal of approval. Enough said!

Gary,
I agree. The layers of B.S. are what made this look like a business. It was illusion. But what scam isn't based on illusion? Who would have bought into any of this if it did not look like it was real? Get a grip. The government stated that they were amazed at the depth of this operation.
Hollywood sets look like real places when you are watching the movie, but then when you see the behind the scenes show you are amazed to see how made up those places are once the camera angle is moved. NADN and Oryan controlled the "camera angle" for the view of what they sold.
No, I am not saying Hollywood is a bunch of scam artists. When we pay to see a movie we know that it is presented for our entertainment. A good film makers make us believe it is real, even after the taste of popcorn fades.

M14224
FYI, I do feel a little ripped off when I pay that much for popcorn and sugar water (soda), but I do know that this is how the Theaters stay open, so I pay it. Otherwise "well said" 06:37 AM Post.

To All:
I found this link that contains a study comparing the costs of a traditional DMV (Department of Motor Vehicle)Transaction Delivery system to an E-Government Web-based Delivery system:
http://www.aamva.org/Documents/egvCostStudy.pdf
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Here is a summarization of my interpretation of the report.
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Time period of report is August 2001. E-Gov system assumes 5 employees needing 1/4 building space. Annual transactions are 456,000 at $3.83 per transaction for an annual operating cost of $1,746,480 (456,000 * 3.83). Assuming fixed costs for 8 years then total costs after 8 years is $13,971,840 (1,746,480 * 8).
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The note from Oryan was payable over 8 years. Assume we paid for 1 ADA modification at $10,475. Initial management cost was $2,500. Management cost after year 1 is $15 per month or $180 per year. For 7 years the total is $1,260.
Total website cost for 8 years is $14,235 (10,475 + 2,500 + 1,260)
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$13,971,840 (E-Gov 8 yr cost) / $14,235 (Oryan 8 yr cost) = 982 malls
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I understand this is not a 100% apple to apple comparison but their are enough similarities to show that the mall cost even with 1 ADA mod. seems reasonable. The Oryan costs would be higher because they had more employees. I think at least 10.
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I only purchased one mall. We were told different stories about how the mods. worked. I beleive a reasonable business person would think purchasing a mall with one ADA mod. was reasonable. Spreading separate mods. out over several years to get mulitple tax credits seems questionable. Why couldn't all the mods. be done in year 1? Another point is when new releases came out how would that affect the ADA mods. Was Oryan saying that they had to make additional software changes to make a new release ADA compliant?
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Some parts of this business "adventure" rise to the level of a "sham": inapproriate business deductions, multiply ADA mods. to same mall, but other aspects exceed the minimum criteria of a bona fide business. The IRS should not "throw out the baby with the bath water". I think we have a strong case to challenge the IRS classifying the malls as shams. There is clear evidence that the malls were not marketed with the sole purpose to be a tax-avoidance scheme. Were we interested in the tax incentives? Sure we were. What reasonable business person would not be.
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I think the IRS has no choice but to publicly take an aggressive position. There were some serious abuses that occurred over a period of time. It took the IRS several years to realize this.
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I welcome any expert criticism of my findings.

On a weekly basis I saw the Linkshare checks that came into Oryan Management. There was a direct relationship between owners who had dozens to hundreds of sales on their site to the level of correct advertising they put into their site. After talking with some of these owners there was found to be a mixture of advertising styles. Some would place ads in papers and magazines, some would just tell everyone they new. What was the same about all of them was that they actively advertised their site and adapted their advertising to the audience that worked.
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Did it raise an eyebrow when clients had 2 to 3 malls each year with little to no movement with sales on the site? Of course. Was it nice to see clients with 1 mall actively advertising their site and seeing results? Of course. I’ve read many times that traffic was funneled to sites with large amounts of sales and I would have to agree with that statement. The traffic was being funneled by the advertising and the efforts of specific mall owners who really truly worked on their business.
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It really comes down to this. Did you work at you mall? Did you advertise your mall? Did you change your methods when advertising worked or failed? Did you sit at a computer and simply click down your note? You may not be aware of this but there are logs of everything. There are logs that kept track of clicks to the sponsor banners that shows the IP address and time of when a click occurred. There are logs that show which traffic came into the site, from where and how long. There are logs that show who purchased what and when. It’s pretty easy to differentiate between owners who more than likely worked at their mall and owners who just clicked away and probably did no advertising.
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Depending on how you can answer some of the questions I think it would really show in which group you stood. The group that bought into the malls multiple times over multiple years to reduce their tax advantage by as much as possible and then worked to reduce their liability by awesome amounts of clicking and the group that bought into it as a business that just happened to have tax advantages.
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One more question if mallforall or shopn2000 was just a store without any of the tax advantages would you have bought into it in the beginning? Would you have bought into it for multiple years with no sales?
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I know in this forum it’s worth nothing but I was with Oryan from pretty much the beginning and I do not remember one instance in which we decided or even debated ways in which we could screw the owners.
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I know it’s coming so come on. Ask whatever questions you want and I will answer them faithfully just don’t expect an answer about my name or position within the company.

Dear Posted by: at August 5, 2004 02:17 PM
Thank you for your information. Maybe you can help make a difference with our dealings with the IRS. Another ex-employee, Anonymous, stated that Oryan was "raided" by the FTC. If it's that clear that Oryan was a bona fide business, why is it being labeled a "sham"? Is the traffic data that you reference available in the public domain or somewhere else? You say you have been with Oryan since the beginning, was the original malls sold without the tax incentives? What was the period of time this occurred? How was it advertised to the public? You are doing a great service by helping us.

Angry Guy
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I doubt that the traffic logs are or will be publicly available.
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I don't remember the malls being sold as stand alones although I wasn't there from the first sale.
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I cannot comment on how the malls were advertised because Oryan was the service company of the malls. Oryan was not a sales organization. From listening to the radio I do remember hearing ads for nadn and other marketing partners. The malls were sold as small business opportunites but I cannot say what pitches were used or how a typical sale went.

Mysterious ex-Oryan employee, ...Thank you for your candor.
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I sent well over 30,000 targeted email ads monthly for three years. I included an ad tag in my email signature on 6 different accounts, had FFA page autoresponders sending two messages to everyone who posted to the FFA pages (4 different FFA pages), once when the ad was posted, and again when it rolled off. I posted ads on free and paid advertising sites. Shall I continue? All of that resulted in one recorded sale in my backoffice and no commission checks. The ShopN2000/MallForAll URL submitted by NADN to Keyword Gold that was "guaranteed" to bring in massive traffic to my site went to a bogus page that generated an error message saying this was a non-existent site and then redirected over 80,000 visitors to Oryan Management's DEFAULT ShopN2000/MallForAll site.
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...now tell me again all the things I was doing wrong and why I should believe Oryan was doing anything to help me make money with my mall?
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Have Robert Goetsch contact me with the schedule of repayment of downpayments and advertising costs and a notarized copy of the voided "Promisory Notes" so I can pass them on to the lawyers. Copies of the records of sales and clickthroughs would also be appreciated.
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...he can run, but he can't hide....not even at Be A Mentor.
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To Ex-Oryan Employee-
Why did they switch name from "shop n 2000" to "mall for all"- did they run out of zip codes?
Also, when was it first offered?

Opaobie
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I believe spam to be effective when it is in the millions not the low ten thousands and even then it's hit and miss.
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I would comment on the ads you placed but I don't even know what an FFA page is.
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I don't believe Keyword Gold to be an Oryan Management issue. Oryan never contracted with Keyword Gold for the hit generators. The issue of an invalid url being used to direct to your mall would be communication issue between nadn and keyword gold not oryan.
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Where a redirection would take place from an invalid number or string was by design. If someone put in a valid pin then that is where they would go. Because commissions needed to be paid to someone a redirection would take place to an Oryan account. It should be noted though that it only occured when an invalid number was specifically entered. If someone went to mallforall.com or shopn2000.com without entering a pin then it would randomly be placed to a pin number. No skewing, no weighting, just a randomly selected pin from the database.
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While I can contact Robert Goetsch and make him aware of your request for notarized voided documents I will not do so.
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RMarie
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In the beginning we were using a zip code system. After a while desired zip codes because scarce and a new mall was created. The same issue occured with mallforall and the pin system was implemented.

Well originally the zip codes were targeted by user requests for specific numbers (either local to their region or "prime" zips that had lots of income promise, such as 90210 Beverly Hills, etc.). Eventually the prime ones were running out. So another mall was created to service this need. However there were plenty of zip codes in Shopn2000 still available even as long as you wouldn't mind having one in the middle of nowhere, Montana :-p. Of course eventually it went to a "PIN" system where the value of the zip was basically debased and assigned at random rather than by anything to do with prime locations.

In the meantime I agree with the other Anonymous post (that wasn't mine), I saw a few being very active in the malls, but many that just didn't care much at all. The few generated the many sales for sure.

Still having trouble with NADN! Today i received a letter from Transworld Systems Inc Collection Agency, they are collecting for American Merchant Consultant. Apparently they are trying to get $1,025 from me. If you remember way back on the other page when NADN was in business and i was trying to get a purchase cancelled and a refund for a "Hit Generator". The purchase was charged to my credit card and then i thought i got my cancellation. Well after much arguing instead of crediting my charge card NADN sent me a check. So inother words the purchase was never cancelled after they sent me what i thought was my refund.

So I called them up and the gentleman i spoke with was fairly nice and said what NADN did was illegal by sending out a check and not crediting the account. I told him that i didnt neccesarily think it was right thta they did it that way but i knew NADN had trouble keeping merchant accounts. He said that his company handled all the credit accounts and NADN closed up shop even on them never paying what was owed. They are also going after those who filed charge backs after NADN closed.

Oryan people,

You say Oryan was just a service company and not a sales company? I have several documented pages of Oryan Management offering "tax incentive programs" offering their 20 years of experience. Also pages from Oryan offering "MallForAll" "Combining an Internet Business with Tax Incentives"

A few more questions who is Positive Solutions Group? and what was up with 24shopper? Thanks for your time.

August 5, 2004 07:18 PM
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Do the papers offer an overview of Oryan and it's services or is it an actual offer to sell? If you did buy a mall did Oryan process the money or did you go through nadn or another company?
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Positive Solutions Group was a marketing partner of Oryan's.
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24Shopper was a version of the mall without the tax advantages associated with the ADA credits.
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As you could probably guess 24shopper wasn't as big a hit as mallforall and shopn2000.

I did NOT send SPAM or use bulk mailing. I used targeted, verified, double-opt-in lists. The lists were screened and targeted....big difference.
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FFA means "Free For All". It is an open advertising page where anyone can post an ad without charge to be seen by anyone who visits the page. Mine are in a network, so a post on one page is shown on all pages worldwide in the network. One of them is also linked to an ad submitter which even further submits the ad to search engines and to other networks. Exposures are in the millions. That should give you an idea. Here is just one of mine that I created myself from script:
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http://www.opaobie.com/links.html
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I have several others that were created by the networks using professional templates. There are a number of templates. This is just one:
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http://www.links2u.com/?778875
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The redirection from my mall by the Keyword Gold "hit generator" was by intent. I checked the URL with Keyword Gold and I was told THAT was the one provided to them by NADN. It was NOT mine, it was not even a valid URL. It INTENTIONALLY was given to Keyword Gold so that a redirection would occur, and the page to which it redirected traffic had NO zipcode/pin -- it was the DEFAULT ShopN2000/MallForAll site.
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Traffic could also be redirected or "stolen" by the "Change PIN" feature, which I strongly fought. That feature would operate sometimes just going from one store to another. Start on my site, and the next page that came up had a different PIN, and often NO PIN AT ALL. Whether NADN or Oryan was responsible for selling the sites originally and for these "redirects", Oryan benefited from the stolen visitors and commissions on their sales, so I don't really care how it happened. Whether Robert goes in and robs the bank or just receives the stolen goods afterwards, Robert is still guilty of bank robbery under the law.
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I doubt that it will be necessary for you to contact Robert Goetsch; I would imagine he is reading these posts daily. Some of the folks at "Be A Mentor" are, too, as well as the ad company and the hosting company -- and the government agents preparing the indictments.
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...I wonder if the same leniency being offered to us "Tax Cheats" by the IRS for "turning ourselves in" will be offered to Robert Goetsch et al if they voluntarily contact the DOJ agents and try to make restitution.
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Opaobie
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If you really used targeted, verified, double-opt-in lists then good for you, most people do not.
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If you saw that your online advertising wasn't working why did you continue with it?
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The answer you gave about nadn providing keyword gold the incorrect url helps to show the path of the error. nadn to keyword gold. What I don't get is why keyword gold or nadn would provide the wrong url? Commissions were never given to nadn or keyword gold from sales. If it was intentional nadn or keyword gold did not benefit from the incorrect url.
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The support and technical representatives of Oryan directed hit generator problems to keyword gold. The contact information of keyword gold was given to the owner to sort out the issue.
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I remember calls coming in about this new product called keyword gold and representatives not originally knowing what the products was. Once again it was a marketing partner product not Oryan's.
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In our testing environment the pins kept if there were no popup blockers installed. Recreating the changing pin was done by installing programs like Norton or other popup blockers that were real restrictive with cookies. Changing the security settings for cookie levels also helped clear the change pin issue. It was an unfortunate issue but not intentional, at least not from a programming standpoint.

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"If you saw that your online advertising wasn't working why did you continue with it?"
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Because it included other business offers that were working. ShopN2000 was only one of the businesses being advertised...and I was "assured" by both NADN and Oryan that they were also advertising for me and that my "promissory note" was burning down at a good rate. I wasn't having to pay any on the note out of pocket, was I? "See, it's working. It just takes time for a new business as revolutionary as this one to begin to generate a profit. Even the IRS gives you 5 years to make a profit." ...maybe I just trusted them to be telling the truth -- stupid me.
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Also, my Keyword Gold account was sold to me under false pretenses -- I did NOT purchase that service -- and the account was established in February of 2004, long after NADN had filed for bankruptcy and was blatently defrauding and lying to clients during their last days of meltdown. I was not even notified that the account existed until months later during my attempts to obtain a refund for what had actually been sold to me. By then, 80,000 visitors had been intentionally misdirected to the Oryan default website by using the non-existent URL. Since NADN, not I, was the reseller, therefore Keyword Gold's client, they told me they could not refund my money, only NADN could.
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."What I don't get is why keyword gold or nadn would provide the wrong url?"
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Really? Keyword Gold told me they only do what they are contracted to do, and NADN gave them the URL, so that is the one they used. A non-esistent URL was provided by NADN by INTENT to intentionally redirect MY traffic to the default mall site. Now think about it, and I'm sure the answer will come to you. Clue: NADN defrauded hundreds of thousands of clients, filed for bankruptcy, Oryan closed shop, half the agencies in the US government are after them and ALL the money is gone. Word for the day: "Crooks".
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I accept your explanation for some of the pin changing fiasco due to software and security settings on the user's computer, but keep in mind that thousands of other online companies have no problem tracking sales in the same environment. Amazon.com, eBay, and a host of others would be broke by now if they couldn't track sales better than Oryan did. How did LinkShare track commissions facing the same problems? Sorry, it is not good enough.
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Opaobie
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I never worked for the other companies you mentioned, all I know is what I saw during testing.
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I wasn't trying to explain why nadn gave the wrong url to keyword gold I was trying to explain that the issue wasn't because of Oryan. I never worked for nadn or keyword gold. I can't explain their actions or thoughts. I can't tell you what was or wasn't planned by them. You can argue keyword gold and nadn all you want but I can't help you with that. I can only answer the questions I choose to answer about Oryan not the others.
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Oh and by the way just between me and you. The kind of response you just gave about your note burning down doesn't exactly translate to a 100% effort to work on your site. It doesn't matter if Oryan conducted an advertising blitz for your mall in every paper and magazine in the world. You're the owner and you should be actively trying to advertise and market your site. If you go up and down on your efforts, or make them half hearted then it's typically viewed as a hobby not a business besides I'm sure the IRS likes to hear those kind of phrases when they debate on allowing expenses. You said they read this right?
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Speaking of advertising Oryan was marketing mallforall and not individual sites. ebay doesn't market some random ebay store owner. They advertise the site, from there it is up to the consumer.
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You don’t have to enjoy or believe my answers you just have to read them

I got into this scam back in December of 2001 before the hit generators. At that time, I also signed an additional agreement with ADA Adventure and according to the cover letter from Daniel W. Porter ADA Adventure was an advertising company that “this particular vendor is willing to pay a premium for advertising space”… and “By applying the income in this fashion, your promissory note will be paid –in-full in the one-year term.”

ADA Adventure went away without paying off my note.

Dear ex-Oryan

It sure is nice to know that Oryan is "innocent". Yet we are "gulity"? If Oryan was/is so innocent why did they not offer to give back the "downpayments" after they received so many complaints - which seemed to take forever for you and your co-horts to answer?

I mean "guilty"? (silly me )

Dear Ex-Oryan Employees,
Thank you for your information.
Do any of you know approximately how many malls were sold under Shop2000 and mallforall? Since the beginning? Breakdown by year: 2000, 2001, etc?
My earlier post came up with an estimate of 982 for mallforall.

Dear Fellow NADN/Oryan victims,
I have done allot of research that may benefit others. If anyone who has received a letter from the IRS is planning to respond on their own and would like some help with preparing your response I am interesting in helping you. I am not a tax preparer or attorney, only a reasonable person. If the IRS gives specifc reasons for denying expenses I could help you with responding to these specific reasons. I can't guarantee that it will make a difference but I am willing to try to help you. My help is free. If your interesting send me an email.

Ex-Oryan Employees,
The DOJ injunction stated for the past four years Shop2000 only had $24,000 in commissions for the 10,000 pins it sold. Does this sound right to you? Do you have any numbers for mallforall? Who developed the original 24shopper? The injunction states that Daniel W. Porter designed Shop2000.
Thanks for your help.

Sorry. I can't seem to spell correctly tonight. Rather than co-horts please read "cohorts". Now, Ex-Oryan I am not saying that you are guilty - but you must realize some of the frustration of those of us who thought we were in a "legitimate" business (including all the legal "tax breaks" that come with it). Now this mess! Then you come along and at least imply that this is our fault or, at least, we should have known about it beforehand by seeing that the sites weren't doing what they were supposed to.

Ex-Oryan,
Are you aware that before NADN shut down that they were saying that if we had any problems with our "hit generators" to contact or if we had any problems or questions to contact you guys. Do you know why they were saying that? Also could you guys tell me who the owners of Keyword Gold are?

The keyword gold relationship was very casual at best, the owner was a former Oryan Employee Joe Prokop, however communications at a technical level were nill. Why NADN sent you to Oryan for Keyword gold complaints I have no idea. Angry guy your estimate for malls sounds good give or take maybe 100.

Keyword Gold Inc -- Login at the following URL:
http://www.keywordgold.tv/clogin.php
.
...use the contact link and ask for "Dorian".
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Ex-Oryan, I think we all appreciate your willingness to address our questions and offer candid answers to the aspects where you have firsthand knowledge and decline to reply to those that did not involve you. Thanks.
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My position has been consistent with that of any reasonable person trying to operate a business. There is nothing wrong with leveraging my advertising to accelerate debt reduction, and that includes letting Oryan sell ads on my mall and use the proceeds from the ads to pay off all debts associated with the mall -- including promissory notes. As has been stated earlier, Oryan through ADA Adventure and other "agents" promised to place advertisers on MY mall zipcode that would pay down MY note INSTEAD of paying me. They didn't say "ShopN2000" in general, they said MY mall zipcode. Were they lying to me? I was forfeiting revenue for debt retirement while advertising on my own on top of theirs. Of course we now know the advertisers were phony shills for NADN, but we didn't know it then. No laziness exhibited on my part there. I have already listed some of the advertising methods I was paying for on my own, so again, effort was being made to actively participate in the operation of the mall as a business....'nuf sed.
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...as a point of correction, I have an eBay affiliate ID, and I can make money if anyone enters eBay through my affiliate link, so even eBay recoginzes that concept as a way to expand exposure in return for a small commission. Thousands of freelance advertising sites they don't have to maintain bringing in business by simply creating a link with an affiliate id posted on someone's existing website. Of course, there was no downpayment, no promissory note, no ADA credit, and no business expense associated with that situation. I only have to pay taxes on the income. Big difference, but it makes a point.
.

Ex-Oryans,
If Oryan was just a service company and not a sales company, why did they take my modification
fee of $2000.00. They told me I could save $500 by
paying them direct and bypassing NADN. Oryan made
it clear, not to let NADN know because I was "their" client. The feeling I got from Oryan
was to just "keep this between you and I". They said if NADN calls, just tell them your not interested in the "mod" at this time. Did this happen to anyone else?

I am not saying that you are guilty or innocent and I do not believe Oryan is innocent of everything. There are a lot of things that are being said and assumed about Oryan, NADN and Keyword Gold. In all of this discussion the companies get muddled and become one big entity plotting and scheming in a smoky room in downtown Las Vegas somewhere. The 3 companies are different, they worked together in a sense but they are different. I think most of the questions asked have been answered in a timely manner by myself.
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I understand that there is a great amount of hurt and frustration amongst you. It doesn't help when someone who formerly worked for one of the companies comes on and starts posting. You have to understand that when you ask questions not everyone is going to respond in exactly the form you want. The other side will give you the other side’s viewpoint and it may not be what you want.
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I do agree with George that there were people who bought into the mall as a true business and actively worked and adjusted to it based on the responses they got from sales. Those people that really truly worked at it were rewarded in a way by increased sales and honest traffic.
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I think the majority of you that get mad at my answers are the ones that didn't treat it and can't prove that it was a business to you. You hide behind this shield of wrongs that were committed by the evil entity. I think the other part that reads my comments slightly smile when they know that they can prove that they were treating it as a business.
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When everyone was still operating and the audits started we got calls and it was reported that people were successful in their audits and that others weren't. I know someone of you will win against the IRS but it will seriously come down to how you operated your business. Or at least how you can show the IRS you operated your business.
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Robin Hood. It seemed like the default answer NADN had when something wasn’t being sold was Oryan Oryan Oryan.
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Easy. The 2000 to upgrade your mall that year was more than likely offered after a few complaints on your part about dealing with nadn. If you made a clear indication that you liked the product but didn’t like nadn then occasional offers were made to upgrade owners when it was decided that they wouldn’t upgrade through nadn but would otherwise. If any new owners were acquired through Oryan that total numbers would have to be small as Oryan wasn’t equipped or designed for sales.
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Angry. 24shopper was an Oryan designed product without any tax incentives. It was just a simple mall. I never had actual numbers but the number of owners I would put at 8 to 10 thousand. The number of actual pins was much higher as many owners had multiple malls.
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Once again if you can prove that you operated your business as a business and not a hobby or to escape taxes for 2 to 3 years then you’re on a much better footing.

The someone of you will win part should have been some of you. Multiple persons not just one.

Who sold the sites and the modifications is not as important as who signed the contracts and who ultimately received the money, although a documented case of a direct sale by Oryan refutes their claim that only NADN was selling the malls and Oryan was just contracted to operate and modify them. NADN was at least a reseller of the malls for Oryan, just as they were a reseller for hit generators for Keyword Gold. If this layer of protection was created to shield Oryan and Keyword Gold from having to refund money to defrauded clients when NADN filed for bankruptcy, we will have to let the courts settle it.
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Today's phrase: Conspiracy to commit fraud.
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Ex-Oryans -- all of you I am not trying to be confrontational with you, and like everyone else, I appreciate your willingness to offer explanations. Our issue is with the management of NADN and Oryan and the business plans they executed, not the day to day operations by honest employees just doing their jobs. Sadly, it is becoming apparent that during the course of their work, some employees discovered that the business plans were at best flawed and at worst fraudulent and they were placed in the awkward position of having to decide whether they wanted to do anything to stop it or just walk away. At least some of you have come back to try to help the victims, and that is to your credit.
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Ex-Oryan

You wrote: "I think most of the questions asked have been answered in a timely manner by myself".I agree that you have on this board and we thank-you. I guess I should not have written "YOU (my emphasis) and your co-horts (sic)". I just meant that when several of us were communicating (via email) with Oryan about the problem that our specific site(s) did not seem to be working properly their response was slow or, in some cases (according to some on this board) was "nil". It wasn't until everything was crumbling all around them that there was a response(s) to "all" of us. This certainly may have been a legitimate response(s) but to me it gave an "appearance" of some trying to cover their "hinnies". (That just may have been my perception and I will gladly stand corrected). Now,again, I am not saying there was collusion going on between NADN and Oryan...but the timing and what we perceived (that word again ) of the connection between the two parties may lead one to, at the very least, think that was taking place. Along with everyone else I "thank-you" and other ex-Oryan employees for trying to help us by answering questions.

If nothing significant was made then why did you keep renewing? I've heard reports of people having multiple malls over 2 or 3 years.

Posted by: at August 4, 2004 05:26 PM

In my case (to answer the above), I renewed (upgraded my mall to make it more ADA compliant) AND purchased a marketing plan at the same time to help me to make a PROFIT. I was out of work and needed the malls to work. The ADA was just an incidental to me. I wanted/needed the INCOME!!! Why would I purchase a marketing plan (I had tried to market it on my own for the first year) if I didn't want it marketed and working? I just thought I was a poor marketer and sought professional help to turn a profit. Pretty reasonable to me at the time. I thought I had to invest to make money. When I found out I got a second mall, and not an upgrade to the first mall, I tried (in vain) to get my money back, as I did NOT want to have to market two malls. One was proving difficult enough. I have a friend who makes pretty good money on the internet, and I saw this mall as MY chance to do the same. NO WAY would I invest in anything I thought illegal/sham/fraudulent. Even if you add up the costs, the note we would have to repay (and claim income for) more than made up for the ADA credit and the $5,000 purchase deduction. I did the math and thought I would lose a bit with investments, but would make money with sales. I may be guilty of stupidity, but not of dishonesty, and I resent being a victim TWICE--once by NADN and again by the IRS.

To Ex Oryan-
You mentioned "24 Shopper" mall- which was the mall without the ADA componant-- How much did that go for?? Were commission levels similar? Did that too have a "note"???
Thank you very much

My response to Angry earlier may not have been clear. The figure I gave of total owners applied to mallforall and shopn2000 not 24shopper. 24shopper I would have to guess had between 100 to 250 owners.
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George. The best and worst thing that happened with Oryan was nadn in most opinions. nadn was an excellent source of sales of our products but they were simply a marketing partner. We had close to 10 marketing partners at any time. nadn was by far the largest. When nadn closed the other partners and 24shopper without the tax incentives just wasn't a hit. Reserves were used up and the layoffs started. If the other marketing partners were operating at the same levels as nadn then Oryan would still be in business.
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RMarie. I am not sure of the price 24shopper was sold for but I believe it to be less than a thousand. The commission levels were the same from the stores as decided by Linkshare. The main difference was that no part of the commissions were applied to their note as they didn't have any notes in relation to the tax incentive.
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It should be noted that in the end each new mall owner regardless of the mall owned got all of the upgrades. As Oryan progressed new opinions were given of the mall structure. Initially it was thought that one pin with new modifications per year could be used. Then an opinion was given that multiple upgrades could be done to a pin but the tax advantages past the first upgrade couldn't be used. Think of a bathroom that needs to be upgraded. Widen the door one year and take a credit. Add some rails the next year and while it's great that you upgraded the credit doesn't apply. Now if you have two locations that need bathroom improvements it's ok to do them in different years just not the same location. Make sense? After that opinion the owners who wished to upgrade got all of the modifications but in a new pin number. Owners of 24shopper got all of the upgrades by default but were unable to take credits as the mall was not improved from an ADA standpoint.

Ex-Oryan-
thanks for the info.
I wish I knew of 24shopper- that was never offered to me. Was NADN a reseller of that?
If owners of 24shopper got the disabled upgrades by default they must have not cost much to do. right?

RMarie.
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I believe each of the resellers had a chance to sell each of the malls.

Each day I read the comments from the many who were scamed and I still feel like kicking myself in the ass for believing NADN from the beginning. I am into my "mall business" for over $13,000 which includes the service of incorporating in Nevada. My "intent" was to pay for marketing and managment of an internet business that would bring me a modest income a few years down the road and offered some tax incentives. I have been screwed! It is as simple as that.

With all that said I find the comments from Oryan ex-employees to be most offensive and would encourage the rest of the victims to cease from communicating with them. They are either dumber than we "were" or still trying to cover their asses! Either way, I am no longer interested in hearing their excuses and put downs and I will NOT defend myself to them! and neither should any of you! The fact that they went down when NADN went down tells the whole story(simply a marketing partner! HA) and is evidence of where their loyalties are. Do not be suckered again! We have all been treated harshly by Keyword, NADN, and Oryan, the three who walked with all our money. (Keyword is still showing an occasional hit to my mall) Let's stick together with those who seem to be working in our favor like Opaobie and angry guy. These others need to leave us alone and save their defense comments and insults for the court room!

To All Victims-
I just learned that H&R Block will be offering their tax prep courses around the country starting in Sept. If you enroll by mid-Aug it's only $149. The course includes 66 hours of instruction, including how to file amended returns. --I don't know about you but I want to empower myself and NEVER put my integrity and good name on the line and fall victim to poor tax advice again. The more you know, the less you can be scammed! Check it out!

RMarie

If you want to take the H&R Block class just for information go ahead. For my part, I am sticking with the CPA I hired who has now completed my amended 2002 return and my 2003 return. I must admit, the cost of him preparing these returns, and conversing directly with the IRS agent we were dealing with was surprisingly low and the advise given was very good. No where near as expensive as hiring a tax attorney or an EA. He was also recommende to me by a lawyer friend of mine. He is sticking with the fact that once the bankruptcy is done, we will be using the $3000/yr capital loss. I TRUST HIM. He is local to my town, and very easy to get to.

I guess I am not a real fan of H&R Block, but, hey - A lot of people use their services and you could make some extra money doing tax preparations when you are done. I am going to pass on participating in the previous posting, but I did find all of the comments very useful.

NG

NG, are you saying your CPA is not deducting any of the downpayment, business expenses, hit generator costs, or anything else in the amended returns and you will just show them as a ???? (what kind using what form?) loss amortized at $3000/year over the number of years it will take to write it all off?

Thanks ex-oryan people for your timely responses, unlike when you actually worked for Oryan.LOL just kidding, well kinda. Anyway with all this great discussion i am just wondering if there are any X-NADN people reading. I was just going over my personal records i kept of who i spoke with and am now wondering what ever happend to them. Some of the nicer people I spoke with a time or two are Adam Sosa, Doug Gerney,Tina Schulte among others. These people were actually friendly and seemed to want to really help. I actually explained the NADN scam to some of them. I believe i even told Adam to go watch the movie "The Boiler Room" because that is what is about to happen. Well since my prediction was correct, i wonder if they ever think man that angry but yet polite young man i spoke with was right.

Opaobie,

Yes. Filed the returns without the Schedule C, but I also did not have another business going at the time. Just a W2 employee getting tired of paying in every year and looking for a way to have a home business and make some money. I guess it would not hurt for you to check with a CPA in your area for your own peace of mind if nothing else. I will be sending the IRS my check for 2002, and if anything changes will file amended returns again later. I am just relieve at this point to have my state and federal returns filed and get some peace of mind, though a much larger debt now, and we will work out the details in the years going forward. If the only way to get any of my investment into this sham is to do it over the course of the next couple of years, then that is what I will do. Not very comfortable knowing the IRS is breathing down your neck. In one way, I guess I am lucky to be one of the first ones to get the questionaire and responses, since I was forced to decide how to go forward. If I never see another dime, it will be a very good lesson learned - though a very costly one. I am no longer a young person (except at heart) and just need to get on with my life. That doesn't mean I am going to just go away and not stay with the fight against these injustices, it just means that maybe I will be able to sleep at night for a while. The CPA seems very sure of the route he is taking here, and I don't think he is doing it because it is just the easiest way to go.

Anyway, I hope all of you posting here try to have a good weekend and I will check in again on Monday.

NG

http://www.lasvegassun.com/sunbin/stories/business/2004/aug/03/517278966.html

M14224

Ex-Employee,

When 24 Shopper appeared in postings I checked it out. There was no default to different PIN/zip codes, and I could not find individual PIN/Zip codes. How was the 24 Shopper dealing with access? 24 Shopper carried a “copyright” of 2004. I search for copyright information for it and mallforall/shopn2000, which carried multiple year copyrights. I found no such copyrights. Do you know if these were ever actually copyrighted? As you’ve indicated the format was taken directly from mallforall/shopn2000. In light of the questions being raised about website “ownership” was there no discussion about selling it under yet a different name?

I know that Oryan was contacted by many people and after a very long time Oryan did finally acknowledge that redirects were happening. My biggest concern, other than credits for any sales or lost sponsor clicks, is that click through data went elsewhere. That is exactly the data that might prove/disprove this as a business for some people. Why was there an apparent indifference, for so long, by Oryan, about correcting this problem? By arrangement, didn’t Oryan receive revenues from LinkShare for click through advertising no matter whose mall those clicks came from?

From the figures previously posted, not a lot of commissions were to be had, so my theory about stealing sales doesn’t seem to hold up if that is true. Those redirects did amount to something like “theft of services”, in that owners were bringing that traffic in via whatever advertising method but not getting credit for it. How many of redirects held sponsor clicks? From a cynical but probable stand point, that could have been the motive to prevent the pay down of the notes, leaving mall owners with a cash payout at the end of the promissory note term.

Some postings from the Oryan side hold that people were all just clicking off the note by themselves. I know that this is not the only possibility. First, according to Oryan’s own estimates, there would be at least enough clicks per year to pay off the note within its term. Oryan also acknowledged that, on the other end of the scale, it could be done much sooner. Don’t you think that anyone realizing that the commissions weren’t materializing might start targeting their promotion toward the sponsors? By the way, all sponsors disappeared off the main page from the November 2003 launch through the next relaunch, what was up with that? That supports the motive to “prevent the pay down of the note” (theory).

I have always believed, based on input from those who have gone to M14224, that the single biggest problem was security. Why was the business standard of 128-encryption never put onto the mall? Sure the stores had Security but what assurances did customers have of the information passing through the mall?

RE: ... http://www.lasvegassun.com/sunbin/stories/business/2004/aug/03/517278966.html

Posted by at August 6, 2004 09:12 PM...

Is that the same Robert Goetsch as in the one at Oryan or just some other "successful" guy with the same name and our money?

Don't be an idiot Gary

I have a correction to make on my original post. I meant to name a girl named Chondra Anstee(or something like that)not the Tina lady. Gary you should be ashamed of yourself for associating Robert Goetsch the hard working for mall owners didnt know it was a scam, ripping us off of our hard earned money for the same guy in that article.

shame....

M14224

Idiot? You are talking to someone who trusted NADN!!! Hows that for Idiot!!!! H-U-G-E mental lapse!!! Does the IRS let you plead temporary insanity???
Of course I was having fun with the name game that was going on in earlier posts, but you knew that. That was a good article in the SUN. Thanx to whoever posted it. I usually check the SUN and the Review Journal but haven't had a chance lately.

In defense of Gary, In earlier posts I had commented about recent Presidents of NADN, Oryan and Wells Fargo who were named Porter. These three companies had a close business relationship so someone, not me, could assume that it was the same guy. Well "Big Joseph" got his panties in a tizzy about cyberstalking and harassment. Apparently, "Big Joseph" had attending a NADN conference and knew what Porter of NADN/Oryan fame looked like. He confirmed that the Wells Fargo Porter is a different Porter. Thanks for the indepth investigation "Big Joseph".

Someone wants a free trip to prison
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If you receive anything like the following, disregard it. It is an attempt at extorting money from you. NADN can no longer try to collect money from anyone, so if someone from this company contacts you or comes to your home or workplace, contact the police if there is an immediate threat; otherwise, contact the DOJ agents at the address or phone number posted a number of places on this comments page or on my website at the "Are you a victim of NADN?" link.
.
Transworld Systems Inc.
Collection Agency
329 North Cedar Bluff Road
#240
Knoxville, TN 37923
.
Client:
American Merchant Consultant
National Audit Defense NTWRK
17220 New Hope St #218
Fountain Valley, CA 92708
(800) 835-3545

http://www.microlaserdiscectomy.com/drburres/index3.htm Check out this link and this quote I found looking for Mr.Prokop. He lives in Mt.Baldy, Ca. Must not be a co-winkydink?

"I have had lots of injuries during my days in the NFL, but never got better so fast as after MicroLaser Discectomy", J. Prokop, former decathlete and professional NFL punter, Mount Baldy, CA

If this is who I think it was... this guy played for the Chargers, Jets, Green Bay, and the 49ers. Can ex-Oryan confirm any of this? Please advise!

I didn't think much of it at the time. One of the NADN telemarketers that called to push more product mentioned Prokop as a good guy and his "football days" when I said that Oryan wasn't correcting problems or even answering emails or letters. The caller even gave a direct number to Prokop. Prokop followed Oryan's tradition of not responding to the message that was left. I didn't matter how great a guy or punter he was, there was trouble with the mall. Looks to me like the same guy. I won't give any further comment because it looks like the Cyber Police are active about naming names here. So I'll just drop back 5 yards and punt.

"MicroLaser Discectomy", Chris's site is interesting. How else would we learn about these things? Think about how reliable that endorsement might be? If he's not playing football anymore then what injury could he be recovering from? Too many times climbing the court house steps? Hurt running away? Prokop was a good punter and it saddens me that this could be him. I'm an old Green Bay fan so I had many sad football years untill recently. Many ex-football players can't find honest work after their careers have ended and then find trouble somehow. Just look at OJ. Sad, sad, sad.
Well the stories here sound like what happened to me. So, ditto! Looks like you've done a lot of research. Here is my input...

Sounds like...
Attorney for Goetsch...

http://www.gamblingmagazine.com/articles/29/29-401.htm http://www.reviewjournal.com/lvrj_home/2001/Mar-06-Tue-2001/news/15563992.html

An ex-Oryan employee says you can find Prokop at Keyword gold now. Here is another coincidence that it's a Las Vegas address:
Keyword Gold Phone and Mailing Address:
US and Canada: (800) 605-4701
International Phone: 702- 360-4701
International Fax: 702-360-4842
Keyword Gold Inc.
9101 W. Sahara Ave. Suite 105-178
Las Vegas NV, 89117

The keyword gold relationship was very casual at best, the owner was a former Oryan Employee Joe Prokop, however communications at a technical level were nill. Why NADN sent you to Oryan for Keyword gold complaints I have no idea. Angry guy your estimate for malls sounds good give or take maybe 100.
Keyword Gold Inc -- Login at the following URL:
http://www.keywordgold.tv/clogin.php
.
...use the contact link and ask for "Dorian"
.
Another coincidence is that Keyword Gold, PCI Group (goestch) and NADN are all within 10 minutes of each other. Seems like this area is a breeding ground for these types of companies. Ironically, the benefit of incorporating in Nevada to protect your assets is now being used by these guys to protect their asses.

August 03, 2004

More complaints filed by NADN estate
By Kevin Rademacher

LAS VEGAS SUN

Complaints have been filed against three more individuals affiliated with the a failed Las Vegas company tax services company, claiming that millions of dollars were fraudulently transferred out of the company before it closed.

William Leonard, trustee for the bankruptcy estate of National Audit Defense Network, has alleged in separate filings that former NADN General Manager Alan Rodrigues (also listed on the complaint as Alan Rodriguez), Lance Kerness and Robert Goetsch received improper transfers from the company.

Leonard alleges that Rodrigues and his affiliated companies -- including Alan II Inc., R and R Financial Inc., Diamond Marketing Ltd., M.J. Sales Inc. and Elite Solutions USA Inc. -- received $2.5 million in transfers.

Leonard also alleges that Goetsch and his company -- Free Trade Enterprises Inc. -- received $3.5 million in questionable transfers. A similar complaint said Kerness and his companies -- Galt Enterprises Inc., Zenith Development Enterprises Inc., Better Way America LLC, and Better Way Debt Services LLC -- received $270,000 improperly.

In each complaint, Leonard said that the transfers were made "with the actual intent to hinder, delay and/or defraud the debtor's creditors."

David Winterton, an attorney representing Goetsch's Free Trade Enterprises Inc., said the complaint did not provide sufficient information on which to make a comment.

Attorney's for Rodrigues, Kerness and their companies could not be reached for comment.

The new complaints mirror a similar allegations Leonard made last month against Weston Coolidge, the company's president and owner, claiming that he received $1.5 million in questionable transfers.

The liquidation of National Audit Defense Network, which began in May, came amid mounting legal trouble. Those woes culminated in April when the Internal Revenue Service sought a restraining order against the company claiming that some of the products it was selling were fraudulent.

http://www.lasvegassun.com/sunbin/stories/business/2004/aug/03/517278966.html

It might save time to list every company in Nevada and then check to see (1) which former NADN or Oryan huckster owns it and (2) how much money they laundered through it. If the court can recover the money, and the IRS doesn't get it all, there may actually be some for the people who have the greatest claim to it -- US!
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If the Joe Prokop involved in this scam is the same one who played in the NFL, I hope he doesn't entertain any notions of making it into the Hall of Fame. If he does, he might want to give "Charlie Hustle" a call and ask him why he didn't get inducted into the Baseball Hall of Fame.

NG-
When you ammended your 2002 and 2003 returns- did you claim any of the "income" from the 1099 you may have received from G. Eagle (this was from click downs)?
Also, did you have mall in 2001?

RMarie,
My interpretation of what NG did is this:
Amend all returns removing all deductions and credits for all malls including the removal of all schedule Cs. In other words, as if you never heard of the malls (this is where the time machine would come in handy :-). Since Oryan is out of business, wait until the NADN bankruptcy is completely discharged. Whatever year that is, hopefully 2004, start your $3,000 investment capital loss on your Schedule D for all out-of-pocket NADN/Oryan expenses until you have deducted the entire loss. For example, if your entire loss is $12,000, it would take you four years at $3,000 per year to write off the entire loss. NG says here CPA feels good about this. I suggest that you run this by other CPAs as well. There are people popping up on the internet that say they can help NADN victims. I read a post on the complaint station website about a EA offering help. I emailed him about exactly what could he do for us NADN victims beside tell us to "seek the advice of a tax professional".

RMarie and Angry Guy

Angry Guy, you are correct in your interpretation. I did not have a mall in 2001 and never received a 1099 from G. Eagle. My notes were only increasing, never going down. Every time I asked about this, I never received an answer.

Am just now writing out all the checks for taxes and getting them in the mail. Will keep you all posted on any additional communications from IRS. Still do not have an answer on penalties and interest, and was told these could not be determined until final rulings - which will be later. My letter stated that my payment will be held as a cash bond and will prevent any further accumulations of penalties and interest. I just feel better that I have now filed all of my returns for now and will wait for everything else to "come out in the wash".

Let me know what you hear from the EA and what his charges are if he represents a large group. Since our original extensions are running out on the 15th, some decisions will have to be made soon by most on how to handle their 2003 returns. Good luck to all of you. I am comfortable with my decision for now.

NG

I am working with a tax expert who has offered to amend returns for victims at a reduced fee. This firm is now completely familiar with exactly how the returns were originally filed (ADA credits, downpayments, hit generators, incorporation, etc.), so they will be able to amend them without your having to retell the entire story. As soon as I hear back from them, I will post a link on my website to their site. I will also post it here. You will then be able to visit the site and decide for yourself whether you trust them to amend your returns.
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As an incentive to businesses who link to my site, I am suggesting that they contribute a tiny portion of their profits to the legal fund. Anyone with a business who would like a link on my site under those conditions is welcome to contact me. I will be reorganizing and simplifying my site to remove some of the clutter.

Thanks NG, Angry Guy and Opaobie. Have a question for NG-- what is a "cash Bond"? What did your letter contain? I am trying to learn, when I mail my payment when I ammend, can I just write a check or should I include some type of cover letter. Also, is your check just for the additional taxes owed or did you add anything for interest and penalties? Also, any idea on who is working on "final ruling"; perhaps there is someone to talk to at the IRS to hear our side of the story.

RMarie,
I believe a cash bond is just a way of saying payment has been received without stating it is a final payment. Don't quote me on that - it is a question I didn't ask. It would just stop the accrual of any additional penalties or interest. It does NOT affect my appeal rights. .

My payment did not include penalties or interest, because they have not yet been assessed since a final audit report cannot be done at this time due to legalities. Don't know who or what, but assume that Oryan's and NADN's challenges have something to do with it, along with the bankruptcy proceedings.

I would suggest you write a cover letter and you can even say that you are filing your ammended return "under protest", I think that's right - and that you hold the position for the right to appeal at a later date. Hope this helps in some way. I haven't really spent much time talking to the IRS agent, though the CPA did discuss some points with her a week or so ago.

NG

Here are a few links to help understand the appeals process and how to file one. The first one is a ".pdf" file downloadable from the IRS site.
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http://www.irs.gov/pub/irs-pdf/p5.pdf
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http://www.irs.gov/irm/part35/ch21s04.html
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http://www.bankrate.com/brm/itax/news/20010214d.asp
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http://www.unclefed.com/TaxHelpArchives/1997/tc151.html
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http://www.wwwebtax.com/audits/appeal_rights.htm
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I found these through a Google search using "appeal letter to IRS" in the search box.
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...there were several more hits, but I only posted the first few. If you want to continue the search, give it a try. If you find something that looks helpful to us, please post it.
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If you suspect you have a virus and need to remove it, download the free updated Stinger removal tool from McAfee and run it. I have been flooded with virus emails, so just to be safe, I am running it in case some of them infected my computer.

This is the site with information about it.
http://vil.nai.com/vil/stinger

This is the link to the actual file to download.
http://download.nai.com/products/mcafee-avert/stinger.exe

Just a question: Since all of you seem to be filing your taxes and paying ADA credits/Mall credits back, can I ask (cheeky--sorry) where you are getting the money to repay? All of my savings (plus a maxed out credit card) went to NADN in hopes of recovering later with a wonderful online business full of tax advantages. Stupid, I know, but now.... My tax refund of $5,000 from 2002 went back to NADN for more mall crap. I am broke, in debt and have no other resources to repay (I really never got a tax refund. NADN got it, with my permission, but refused to give it back when asked). I assume others have resources or are borrowing? Anyone else in my boat with nothing left to bleed? I assume you can't take out bankruptcy and have back taxes (they are inevitable--sort of like death) forgiven.

FYI: I met IN PERSON with Chris Cottner last February at NADN offices (where I went in person to get my money refunded!! I told them I would sit in their lobby until someone showed up. Cotter finally came after an hour of my waiting.) Believe it or not, he was able to talk me into leaving the money I gave them for a second mall (when I was only wanting an upgrade so my mall would be more marketable. Two malls was too much for me to market and I didn't want the second one). He said "big things" would be coming to help us (me) market and turn a profit. His reason for not retuning my many calls was that the company had just grown so much some things "fell through the cracks." He apologized and said it would not happen again. Everything LOOKED so legit! Cottner gave me his personal card with what he said was a direct number to help me better reach him (which I can no longer find--maybe it was printed in disappearing ink), a pat on the head telling me NADN folks were "hired to work the IRS for me" so let them do their job and a "scolding" for being suspicious. Two malls were actully a boon, as I'd have TWICE the exposure. He told me that although he was not a salesman, members got so many calls from sales because they always were out there looking for something to help us stay ahead of the game. In the long run, we'd be much ahead to buy what was available. Tax Credits were a godsend! He said their advice was sound, the IRS had approved the credits, and we should follow what they told us was good for us. He also gave me a free marketing plan for the second mall--the one I never wanted (why not? The plan was not worth anything.) I left feeling like I was the bad guy. They were certainly good at what they did, or I was the biggest naive turnip on the farm. Or both.

Has anyone checked with Mr. Leonard, the NADN Bankruptcy Trustee, or with a tax consultant as to whether the $100 being extorted to have victims' own records returned is tax-deductible? If I'm not mistaken, costs associated with tax preparation are tax-deductible (of course, not all of it, although it used to be, and it should be). Just like "theft loss" and "bad debt loss", there is a "deductible" or it has to exceed a percentage of your gross income.

Jean J, you and thousands like you are the reason I am putting all my efforts and risking everything I have to force the IRS to resolve this issue in our favor. If you check some of the earlier posts, you will find a link to tax.com and some info concerning getting advice from EAs. There are right and wrong ways to fund your back taxes using the same assets. If you have a retirement fund (401k) and borrow against it to pay the taxes, you will pay twice as much and lose it. If you withdraw from it and pay the early-withdrawal tax if you are under 59 1/2 years old, you still come out better. There is a lot more to it, but that is just one reason why it would be best to consult an expert. I am trying to get one onboard ASAP to help everyone. Don't throw in the towel just yet.

Jean J

Just to answer your question on where did we get the money, the answer is the same for me as where did we get the money in the first place - took money out of our home equity line of credit. Well that is maxed out now, so hope nothing goes really wrong with the house. If you are a homeowner, maybe you have some equity you could borrow against. Also, I am pretty sure the IRS will work out a payment plan with you, though it is my understanding that interest will still accrue on the unpaid balance. The CPA told me the interest rates have been between 4 and 5 percent for this year, and since interest is interest, I guess that would not be a terribly option. I guess you should call a CPA in your area and just ask that question on how to go about setting up a payment plan. They probably also have something on their website, so see if you can find a document or something. Hope this helps.
NG

Thanks to all for the advice on paying this mess off. I do need to call some help in my behalf, but it is so embarrassing to explain. I'm hoping the CPA who is offering help to others in this mess (waiting for the post) will be able to take on my case, too. Actually, my last post was mostly venting about the futility of this whole situation (not really expecting someone to give me a lottery ticket or anything.) I'm angry I got myself into in this mess, but having so many in the same circumstance almost calls for national action (yes, I wrote congressmen, but no response--a polite "generic" letter is all I got).

But seriously, how is driving so many to financial ruin (despite the small return to the IRS--a drop in the bucket really) in their best interest? If I have to take out bankrupcy or get so deep in loan debt to repay that I can't pay other bills, lose my home, become homeless, not be able to take care of my family (I realize I'm pushing the envelope here, but it is pretty hefty financial burdens we face) how can the IRS benefit from my future non-existent wages and forcing the government to take care of my family? Guess they don't care, hum? I so much appreciate Opaobie's work in this, but I don't understand the IRS working AGAINST us. Shouldn't we be working together to capture these crooks? We were victims, too. How can you say a person run over by a hit-and-run driver (the driver, of course escapes all injury and steals the wallet of the victim) should pay the damage to the government street sign, as well as pick up the tab for his own medical bills? IT seems ridiculous. We paid for the car to hit us and now must repay the car's damage in our lives and the lives of our government. I don't see how this can stand up in court, but I am pretty niave (as mentioned before). And as an NADN victim, that is pretty obvious. Maybe the driver who SOUGHT US OUT TO INJURE should bear the burden for ALL of us (of course they are probably in Mexico living it up on our dime. And with a NEW car taboot!)

Jean J,
I agree with something I read somewhere. The IRS is required to take the position that they have on our dealings because they couldn't know our intentions. By law they must collect all due taxes. If they did not take the hard line people would walk all over the tax code. I guess what I am saying is we need to do more than say we thought we were buying valad tax prep. or a legitimate business. We have the burden of proof. I do not like the going through it part but I think we'll be alright. I think we are in an if we prove one then we prove them all situation. Our best bet seems to be with Opaobie's effort. So its time to payroll that effort don't you think? I do and will.
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Aside for Opaobie, are there any classes or types of documentation that you need like letters, emails or whatever from the collective? I assume that patterns of intent may be valuable.

I have collected the basic letter sent by the IRS auditor along with the Form 4564 request for info (about 45 questions) that comes with their letter. I will try to clean them up and have them available for anyone who needs them. I had hoped the Form 4564 could be downloaded directly from the IRS website to save time, but each one is tailored to the particular situation being audited, so the one we need is specific for NADN/Oryan online malls only, not just a generic form. I will try to find a link to it on the IRS website, but they may not have the tailored version online. Most of the questions are similar to the ones in the DOJ letter, and you will find them in the Synopsis on my website. Others relate to each deduction associated with purchases from NADN or Oryan.
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It would be good for everyone to go back through their email from NADN and from Oryan and build a list of names of those with whom they had contact at either company. Dates when malls were sold and when modifications were sold and when and how payment was made would also help, but just make a list for yourself. That data will support your claim that you kept an ongoing effort to operate the business and follow the advice of the "experts" at NADN and the "operators" at Oryan.
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Any advice you have received from a CPA or tax expert, especially an EA, could help keep folks out of hot water in both the audit interview and the filing of the amended returns. There are still several schools of thought as to how much or how little to try to claim and whether to claim business expenses, business theft, personal theft, etc. Share what you find out, and I will too.
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I meet with the lawyers again tomorrow, so I may have more news after the meeting.

This is an aside mostly to Opaobie....

I have a letter I sent NADN (certified--somewhere I have the receipt for that certification) stating I wanted a refund for a second mall I was charged for because I thought I was purchasing an UPGRADE to my existing mall and did not have sufficient time to market TWO malls adequately. Marketing one mall was proving to be difficult enough. I also said (in the letter) that sales people tried to talk me into keeping the second mall for the tax advantages, but (and I quote) "that was NOT the reason I purchased the mall!"

The letter is dated Nov 2003, because that is how long I tried to get a refund before I finally wrote a long letter with a log of all the calls I made trying to straighten this out. I don't know if MY intentions would help others, but this letter clearly says to NADN that I wanted the mall for income, not a tax break. (And it also states that I purchased a marketing plan in an attempt to make it successful).

I have the letter on a disk with the "creation date" of 11/21/2003. I assume there is some way to prove it was written then (if I were to change it to reflect any changes, the date would change, so what I wrote is what is dated 11/21/2003.) I had no way of knowing I'd need proof at that time, so this is pretty good indication of my intent, and it is dated before this all fell down around us.

If any of this will help, let me know. I have a 2-page phone log (with my notes of what happened and names of people I spoke with, if I got their names) in trying to resolve this and get a refund for the second mall I did not want.

Jean J, that information would be good support for your Proof of Claim against NADN in the bankruptcy proceedings and might also be of benefit to the DOJ in their criminal proceedings against former NADN executives. I suggest you contact Mr. Leonard (the NADN bankruptcy Trustee) and the DOJ agents and ask them if they would like a copy of it. You might also send it to the same address as you sent your Proof of Claim along with an amended Proof of Claim and check the box that says this is an amendement to your original one and not a new claim. You should also include it with your protest letter when you file your amended tax returns. This is just a suggestion, and I would strongly urge you to discuss it with your tax advisor. If you don't have one, let me know, and I will put you in contact with one who has offered to help us.
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If you want to attach the files to an email and send them to me, I will add them to the repository we are collecting for the lawyers. Your personal information is being protected, but if you want to make a copy and delete the personal info, that is fine.

Time to turn the tables
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The IRS is hammering us with questions, but maybe it is time for them to answer some. Help me put together a list of questions we would like for the IRS to answer. Gross failure in their role of oversight is clearly indicated. They have a responsibility to protect the taxpayer, and that includes the victims of a fraud perpetrated by former IRS "experts" who had been endorsed by the IRS and by leading experts in the field of tax law and policy. Documentation showing any of these endorsements would be extremely valuable, even cached webpages from a Google search.
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We are compiling a wealth of information to support our position that we did everything they are now chastizing us for not doing, such as seek advice from "tax experts" before investing in a business offer and filing credits or business deductions on our income tax returns. Former "IRS experts" verified the credits and deductions before we invested and filed the returns. Auditors at the IRS accepted them initially and in some cases, they accepted amended returns that added them after they were originally filed without the credits and deductions. They had an opportunity at that time to question them and even reject them. Why did they wait until NOW?We even have documentation showing our efforts to operate the malls with a profit motive, not simply as a "tax shelter". We even have records of sales completed through the malls. Regardless of any flaws in the tracking or paying of commissions by NADN or Oryan or any overt attempts to defraud us, that evidence alone should weigh heavily in how they choose to accept our amended returns, and it certainly should provide a strong argument in favor of waiving any interest and penalty charges. Allowing the business deductions is still a matter for debate, and that is where questions to the IRS concerning why they are not being allowed should be raised. Tax law should be cited, not just contentions stated in a "Q&A" on the IRS website. I plan to forward these questions to the staffers at the Congressional committees who will be launching the investigation into the IRS. You might also want to send them to your member of Congress and your US Senators, too.
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No one is disputing that NADN and Oryan defrauded us and the US government. We don't believe the IRS should do it either.
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I have been informed that the IRS will impose a $25,000 fine on anyone who protests their ruling in tax court and loses. Whatever happened to "due process"? It really galls me to think the IRS can use our own tax money to fight us in court. Maybe your member of Congress and US Senators should look into that not-so-veiled threat as well. I would have no problem asking that some of the contributions to the legal fund be used to defray that fine if someone wishes to be the plaintiff in such a case. If I can build a strong enough case myself, I will probably choose that course. We want the person with the strongest case and the greatest probability of winning to represent us, so think it over and decide whether any of you wants to step forward. PLEASE seek trustworthy legal advice before you make your decision. I certainly will.

Opaobie,

I believe this is the link that you are speaking of. It is pretty interesting reading and addresses most of your comments regarding the appeals process.

http://www.irs.gov/publications/p556/ar02.html#d0e857

The link to the IRS site is an excellent source of information about our appeals options. Everyone should read and understand it.
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Several people have asked me for a copy of the letter I have sent to my Congressman and to my Senators. Here is one version you are free to use and tailor to your own situation. I have repeated some information in more than one paragraph to allow you to choose where you want to mention it.
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Just insert the Congressman's or Senator's name and put your name and address at the end. You can contact them through their website or through the House and Senate websites. If you know what committees they are on, they also have a contact form on that site.
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Dear (insert the name of your US Representative or Senator)
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Hundreds of thousands of honest taxpayers, including many of your own constituents, desperately need your help. We are also in every Congressional district in the country. I writing to my Congressman and both Senators about this issue.
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One of the other victims has posted a more complete synopsis at the following URL. We can supply any additional information you request.
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http://www.opaobie.com/Synopsis.html
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In addition to the money we have lost through fraud and that we owe in back taxes, interest, and possible penalties, we also face an additional fine of $25,000 if we litigate our claim through appeals or in tax court and lose. We believe this is an unconstitutional denial of our right to due process.
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Below is a short version of our situation and request for your intervention.
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Thousands of former clients of the National Audit Defense Network (NADN) now face financial ruin at the hands of the IRS and are seeking your help because they mistakenly placed their trust in an organization created by former IRS tax experts and even endorsed by officials at the IRS and by the Nevada BBB. Unfortunately, besides driving thousands to the brink of financial ruin, NADN has now driven its founder to suicide -- June 20, 2004 -- Father's Day.
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As you may now be aware, NADN has been charged with defrauding its clients for several years through various tax schemes and in mid April of this year filed for Chapter 7 bankruptcy protection in Las Vegas, Nevada. The first hearing was conducted on July 8, 2004. Progress is posted on the US Bankruptcy Court, District of Nevada website. NADN had initially filed for Chapter 11 protection last year and continued to operate and defraud clients for another year before being driven to liquidation this year by a $1 million claim against the company by the Securities and Exchange Commission, injunctions from the US Department of Justice (DOJ), suits by the Federal Trade Commission, and complaints filed with the consumer fraud division of the Office of the Nevada Attorney General. NADN had in its possession thousands of income tax returns for clients, those returns are now in the hands of the Bankruptcy Trustee, and former clients are being charged $100 to retrieve their own documents in order to be able to file 2003 income tax returns. Interest and penalties accrue for each day they are not filed as well as for amended returns that must be filed for the previous two years. For many of the victims, state and local income tax returns must also be amended.
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As a result of NADN's dishonesty, thousands of ordinary people were defrauded of thousands of dollars and are now subject to large back tax assessments along with substantial penalties and interest. The IRS has made a preliminary ruling that they may not even claim any of the losses as business deductions or losses. Many of them will be ruined financially, and many will be forced into bankruptcy. The former head of NADN, Robert Bennington, committed suicide on June 20th, 2004, and the US Department of Justice has filed injunctions against NADN and Oryan Management, the company NADN used to create and sell online shopping malls allegedly modified to comply with the Americans with Disabilities Act (ADA) in order to allow the owners of the malls to claim a credit on their income tax returns. A portion of the proceeds from the malls was supposedly donated to the disabled in the zipcode of the malls. The concept of ADA compliant online shopping malls was actually legitimate, but, unbeknown to the mall owners, it was never implemented as promised. Guaranteed "audit-proof" tax preparation and counseling as well as legal representation by NADN during an audit were included in the price of the mall, the offer came from verified former IRS tax experts and business advisors, so thousands of unsuspecting, honest investors purchased malls. Most of us reinvested our tax returns into new "modifications" to the malls for up to three consecutive years and only learned by chance from an internet website that we had been defrauded, even after filing tax returns for the 2003 tax year -- tax returns that were accepted by the IRS without question and are only now being reexamined in light of the discovery by the DOJ of the fraud.
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We are compiling a wealth of information to support our position that we did everything the IRS auditors are now chastizing us for not doing, such as seek advice from "tax experts" before investing in a business offer and filing credits or business deductions on our income tax returns. Former "IRS experts" verified the credits and deductions before we invested and filed the returns. Auditors at the IRS accepted them initially and in some cases, they accepted amended returns that added them after they were originally filed without the credits and deductions. They had an opportunity at that time to question them and even reject them. Why did they wait until NOW? We even have documentation showing our efforts to operate the malls with a profit motive, not simply as a "tax shelter". We also have records of sales completed through the malls. Regardless of any flaws in the tracking or paying of commissions by NADN or Oryan or any overt attempts to defraud us, that evidence alone should weigh heavily in how the IRS auditors choose to accept our amended returns, and it certainly should provide a strong argument in favor of waiving any interest and penalty charges. Allowing the business deductions is still a matter for debate, and that is where questions to the IRS concerning why they are not being allowed should be raised. Tax law should be cited, not just contentions stated in a "Q&A" on the IRS website.
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I respectfully ask that you and your colleagues as well as members of the Senate and House Appropriations Committees initiate an investigation into the conduct of the IRS in not only allowing this financial and tax disaster to develop and threating reprisals for exercising our right to due process but also in exacerbating the damage to taxpayers by disallowing legitimate claims for expenses and losses and by imposing unfair penalties and interest as a direct result of the their own failure to perform oversight and discharge their duties.
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Thank you for your time.
(insert your name and address and phone number)

I've been reading more and more about the value added tax (VAT) and the abolishment of the IRS. The headlines of Bush campaign supporting these ideas are appearing regularly. If you do a search engine search on "IRS abuse" you will find taxpayer advocacy sites that probably would love this story of the IRS involvement in this situation. You could also email the authors of these articles about this situation. You might find one who would do a followup piece to their article giving the NADN/Oryan situation as an example why the IRS needs to be abolished. Just a reasonable guy thinking out loud.

Good letter Opaobie. Of course I am biased, but how can anyone including the IRS look at what was done by mall owners as non-business. I think that nobody had a mall long enough to even pass or fail the standard 5-year test. It is well documented what everyone was told, what was supposed to happen, what was contracted for and what the end result was. The business we bought simply did not materialize through no fault of our own.
The credentials of our Tax advisors included those of ex-IRS and other recognized or Certified individuals. Those credentials exceed many of those that are now helping us to resolve the problems that were created. Who should be trusted? Does the IRS have a definitive list of advisors and preparers?
I realize that some things that Oryan put into text changed from year to year. Denials of certain things have occurred with those changes. Oryan’s FAQ’s as recently as June stated, “Since your MallForAll.com is a business…” showing what that claim was. FAQ’s answered the question “Is it legal?” with “Yes, We have presented this tax plan to tax plan to tax attorneys who have rendered their opinion that this tax plan is legal. Recent court rulings as well as newsletters from the IRS further support this tax plan’s basis,”
The Mall was marketed as a business. Along with the business, Oryan, NADN & others proclaimed Tax features that small businesses all the way up to major corporations enjoy. Excluding Tax impact on your bottom line potential would not yield a good business plan.
Tax Credits are universally understood to be an enticement toward economic behavior that usually benefits the environment, populous and/or business/governmental groups in some way.

Note the following as a random example:

http://www.detnews.com/2004/autosinsider/0406/19/d01-187779.htm

Should we not buy a hybrid car for fear of the IRS ruling the credit out?

I’m sorry but are tax credits for clients, that tax professionals just made up, inundating the IRS with claims? If that is a common practice then that is why our ventures are being scrutinized. They need to concentrate on those acts and not people caught in a scam based on those practices. That type of activity is not of our design, nor were we coconspirators. We operated with legitimate intent. From our side, this was not a hush-hush, backroom, cheat the IRS adventure. In fact I’ve seen numerous open challenges for NADN & Oryan to come into the open at this site. Some did after the fact & Thank-you.
When weighing the likelihood of “success” in tax court, we are definitely an easier target for the IRS because we are financially ill equipped to defend ourselves. Losing by default is not noble but the stats look good for that annual review.
Obviously the ADA credit could only apply to a business. No business, no credit. The mall business was paid for advertising (sponsors, 1 click, two bucks) and commission-based advertising for directing traffic to stores (no sales, no bucks). The last I knew, selling advertising, no matter in what form, how you are compensated or whether or not the advertisers made money, is a recognized business. A free weekly newspaper is but one example of an advertising based business.

i found a pretty cool website for everyone to use when writing to the U.S. Representative or Senator. You can even write to the President and Vice President(not that they read them) but hey its worth a shot. I am sending emails and letters to everyone.

What you do is click on your state and then type in your address with your 9 digit zip code....It will tell you who your 2 senators are and who your House of Representative is. Type in your info and it sends emails to everyone checked.

http://www.visi.com/juan/congress/index.html

You'll Drive,
You're newspaper example forgot the tax credit for the Braille edition of the paper. Too bad the IRS found out it was only blank paper from the floor of Mrs. Nadia Oryan's "Golf Spike Dancersize Class." = Last Comic Setting
I only wanted to pay the least taxes I leagally owed ever. Still do. If tax code was not complicated this would not have happened. i'm a good person, I tip the pizza dude & pay my rent on time. I always filed my taxes on time B-4 NADN back B-4 the D-vorce & B-4 I looked for more professionals because of it - I left things off the long form that I wasn't sure of. Like Tommy who probly isn't my son (Divid Crosby in the kitchen with the turkey baster). And because i already claimed medical for the vasectomy which was more money. LCS

I found this in a web search. Hmmmmmm? former "IRS experts". You don't suppose......????
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http://search.freefind.com/find.html?id=90787217&pid=r&mode=ALL&n=0&query=tax

Here is another one!!!

http://www.amazingsecrets.com/aim2.htm

are NADN's "good fellas" still at it, or are there more clones out there?

Here is an excerpt from the page:

"This multimillion dollar company, launched by the nation's top tax experts, accountants, attorneys, and former IRS District Directors and Agents has over 1600 affiliate offices nationwide. And this number will explode within the next 24-30 months.

When you become a member of this tax program, you basically have a "business on wheels". You will be able to deduct things like your house payments, car mileage, vacation, entertainment, your child's college education, computer, your spouse and children as employees, 100% medical, dental, prescriptions, eye surgery, even the food that you eat and the clothes that you wear."

Taxpayer, B-E-W-A-R-E!!!!

M14224
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Opaobie,

Permission to speak freely Sir!
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From what is coming out of the story here, it seems that "IRS expert" is slowly being elevated to oxymoron status. It seems that “expert”, to many, has somehow become someone who doesn’t have a clue about what they are talking about. I guess to be correct you need to apply “former” as a modifier to reach that state. Maybe they are “former” because they actually didn’t know what they were doing when they were with the IRS and who knows how many people paid taxes and penalties that they didn’t have to because of them. Maybe a separate investigation is in order. Are we being Judge and Juried by future “former” IRS experts?.
Before this all happened I held these people with much reverence, and hope to again. I‘ve had to deal with the public. As a whole the public can be quite nasty when giving up money comes into play. That is what the IRS people see all the time. These guys are probably eating antacids even though they are maxed out on calcium.
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But really, the core question becomes: In real time (not hind sight), how do you gage a CPA, Accountant, Tax advisor, or “former” IRS agent on his/her ability to comply, for you, with the tax code? How many are shining one day and three years later dead wrong? We’ve all seen news stories where the vast majority of preparers get the “one” lab rat (probably the producer’s) return wrong according to the IRS. Some of the losers are night school graduates of some “Plug In The Information” U, but many are the big boys. How can such a group of “experts” be wrong to the extent and depth that NADN seems to have been? To your point, how could the IRS and other governmental bodies have allow it to continue as long as it did without question or warnings to the public? Shouldn’t this have been nailed in the first year’s returns (2000)? The tax credit was new. Isn’t “new” where most of the overlooked problems are intercepted and rectified in any given system?

Hey Jean J.,
Go to the bottom and read their disclaimer.
The IRS is saying that we didn't do sufficent due diligence by throughly checking out NADN and Oryan. Look how these guys are covering that.
"Amazingsecrets.com does not provide legal or financial advice and/or services.
Amazing Secrets have members from all around the world. Please seek legal consultation
and/or governing jurisdiction regarding the usage of any information provided here.
All Rights Reserved."

Amazing Secrets regular price for lifetime membership is $54.95 but today it's only $23.85.
Here is one of their claims:
"$70 Investment can yield you $7.5 Million. Do it now!"
Opaobie, don't worry about the legal fund now. Soon I'll have $7.5 million for ya!
It comes with a money back guarantee, too!

Since I have begun the quest to find "tax experts" to help us, I have noticed that more and more of the sites offering tax help tout "former IRS experts". I wonder if the IRS is taking note. I doubt that it would persuade them to be a little more lenient in their assessments of our amended returns, but it certainly supports our claim that we sought expert advice before we contracted with NADN and Oryan for what we believed were legitimate products and services.
...just thinking out loud.

On the lighter side...I graduated from USAF pilot training on a Friday the 13th many years ago, so to celebrate that fact, here is a link to one of my missions during the Vietnam war. Reminded of the event by a story in the news about whether Senator John Kerry was in Cambodia Christmas Eve of 1968 (no one in our units was there in 1968), I actually flew a number of missions over Cambodia in 1973 after the Cambodian government had asked for our help. Anyway, during one of those missions, on our way from our base in Thailand to our target areas in Cambodia, we flew loose formation with a sister ship and the other plane took a photo of my plane. The significance of the photo is in its title, "Moon Over Cambodia". You can't see me in the pilot's seat (too dark and too far away), but if you look closely, you will be able to see the "moon".
.
http://www.opaobie.com/images/MoonOverCambodia.jpg
.
...maybe Friday the 13th should be celebrated from now on as "Victims of NADN/Oryan Day".

I would like to do a "moon" over NADN/Oryan. You can image what I would be "dropping" on them :-)Sure wouldn't be rose pedals!

My interpretation of my findings to date is that we would receive the greatest benefit if our out-of-pocket losses qualified for I.R.C. 165(c)(2). I am pursuing this idea by looking for Tax Court Cases that support it.
I came across this site doing my research.
They have the usual statement about being ex-IRS experts but interestingly they list the Bios of their EAs on the site. I plan to contact them to see how they could help us but I know many of us need immediate help so I am providing this information now. Please use caution before entering into any agreement. You may want them to put in writing how they propose to help you and provide success stories similar to your situation. We should mention to them about the scope of this situation and maybe they can represent us as a group.
http://partners.165services.com/
"Bigger, Faster Tax Benefits
If your client's investment loss qualifies under Code Section 165(c)(2), it may be possible for your client to deduct the full amount of the loss immediately against ordinary earned income, to realize significant advantages, all in one tax year."

Angry, I'm sure glad you're one of the "guys" on our team. If we all work together and keep up the excellent research, we just may ride this storm out alive....figuratively speaking.

Two more advocates:
.
http://www.house.gov/steveking/index.htm
.
http://billthomas.house.gov/
.
Washington, D.C. -- Iowa's 5th District Congressman Steve King applauded Chairman Thomas today for agreeing to hold a hearing on major tax reforms, including the FairTax.
.
As news sources reported yesterday, Representative Bill Thomas, Chairman of the House Ways and Means Committee, announced that his committee would consider replacing the federal income tax with a national sales tax.
.
"I have been working to move to a national sales tax, or FairTax, even before I was elected to Congress", said King. "We should abolish all federal income taxes, including the regressive payroll tax, and replace them with the FairTax (HR 25), a federal retail sales tax on all new goods and services purchased for personal consumption."
.
"I am glad to hear that my efforts to get a hearing on the FairTax have been successful and that Chairman Thomas is open to the idea of a FairTax. I am looking forward to working with him in the coming months."
.
Speaker Hastert has recently called for monumental tax reform in his new book, including consideration of a national sales tax.
.
"It is time to abolish the IRS and unleash the productive sector of our economy", said King.
.
Contact Steve
Washington, D.C. Office
Office of Congressman Steve King
1432 Longworth Office Building
Washington D.C. 20515
(202) 225-4426
Fax: (202) 225-3193
.
Storm Lake Office
Office of Congressman Steve King
607 Lake Avenue
Storm Lake, Iowa 50588
(712) 732-4197
Fax: (712)-732-4217
.
Sioux City Office
Office of Congressman Steve King
526 Nebraska Street
Sioux City, IA 51101
(712) 224 4692
Fax: (712) 224-4693
.
Council Bluffs Office
Office of Congressman Steve King
40 Pearl St.
Council Bluffs, IA 51503
(712) 325-1404
Fax: (712) 325-1405
.
Write him an email if you feel inclined. Those in the 5th District of Iowa will get preferential treatment on email or phone calls.
.
http://www.house.gov/writerep/
.
Those of you in California in Bill Thomas's district should do the same.
.
http://billthomas.house.gov/Contact.asp
.
Atascadero
5805 Capistrano Avenue, Suite C
Atascadero, CA 93422
Ph. 805-461-1034 - North County
Ph. 805-549-0390 - South County
Fx. 805-461-1323
.
Bakersfield
4100 Empire Drive, Suite 150
Bakersfield, California 93309
Ph. 661-327-3611
Fx. 661-637-0867
.

I sent in my 2003 taxes today (put together from photocopies I made of my information before sending [and losing] it to NADN) before my extention expired. Good news is, even leaving out the Mall for All credits, I will get a modest refund. However, I have opted to have them keep it for whatever I will have to make up in 2002. I also included a letter with the return stating why it was late and making sure they knew that I was leaving out the Mall For All out of pocket expenses and would file an amendment once this is all settled. It feels good to have it gone, but we're still in the thick of the fight. Thanks to all who keep helping the rest of us who are tagging along behind (we are pushing you instead of pulling you, but the support is genuine!) I figure if the loss Angry Guy was mentioning will work, I'll get an enormous refund this year, too. Hopefully enough to pay off some of the credit cards I ran up to buy malls, marketing plans and upgrades. Expensive lesson for all of us. But I'm not sure how, given what we knew when we became involved, it would ever have been any different. The only way to avoid such problems is to have a time machine to see what lies ahead.

A few people asked about the exact wording of the tax code for I.R.C. 165. This is only an excerpt of a couple of sections that pertain to our situation. The IRS website instructions as to how they want us to handle our out-of-pocket expenses is section (c)(3) that is limited by subsection (h) which says that the loss would be limited by $100 then 10% of AGI. This is the LEAST beneficial handling of our expenses. The reason I am focusing on 165(c)(2) is because the IRS is trying to say that the malls were not a trade or business. 165(c)(2) looks at transactions entered for profit but not for your trade or business. One idea is to view NADN as our financial advisor/accountant who gave bad/fraudulent advice. The mall could be viewed as an "investment" that is a theft loss due to fraud on the part of NADN. The DOJ is making our case that NADN committed fraud directly against us. Thank you to the DOJ. The IRS allows an investment loss as a theft loss when the broker acted in a fraudulent manner making the sale to the investor. In contrast, the people that purchase Enron stock on the open market can't deducted their loss as a theft loss even though the executives of Enron were accused of criminal activity because stockholders didn't buy stock directly from them. Please keep in mind that I am not a CPA. If any of us find case law that supports our position we probably would still need a CPA or EA to represent our position to the IRS. I would appreciate any comments from any CPAs or EAs monitoring this forum as to my interpretation.

26 USCS § 165

§ 165. Losses.

(a) General rule. There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.

(c) Limitation on losses of individuals. In the case of an individual, the deduction under subsection (a) shall be limited to
(1) losses incurred in a trade or business;
(2) losses incurred in any transaction entered into for profit, though not connected with a trade or business; and
(3) except as provided in subsection (h), losses of property not connected with a trade or business or a transaction entered into for profit, if such losses arise from fire, storm, shipwreck, or other casualty, or from theft.

(e) Theft losses. For purposes of subsection (a), any loss arising from theft shall be treated as sustained during the taxable year in which the taxpayer discovers such loss.

(f) Capital losses. Losses from sales or exchanges of capital assets shall be allowed only to the extent allowed in sections 1211 and 1212.

(h) Treatment of casualty gains and losses.
(1) $ 100 limitation per casualty. Any loss of an individual described in subsection (c)(3) shall be allowed only to the extent that the amount of the loss to such individual arising from each casualty, or from each theft, exceeds $ 100.
(2) Net casualty loss allowed only to the extent it exceeds 10 percent of adjusted gross income.
(A) In general. If the personal casualty losses for any taxable year exceed the personal casualty gains for such taxable year, such losses shall be allowed for the taxable year only to the extent of the sum of--
(i) the amount of the personal casualty gains for the taxable year, plus
(ii) so much of such excess as exceeds 10 percent of the adjusted gross income of the individual.
(B) Special rule where personal casualty gains exceed personal casualty losses. If the personal casualty gains for any taxable year exceed the personal casualty losses for such taxable year--
(i) all such gains shall be treated as gains from sales or exchanges of capital assets, and
(ii) all such losses shall be treated as losses from sales or exchanges of capital assets.
(3) Definitions of personal casualty gain and personal casualty loss. For purposes of this subsection--
(A) Personal casualty gain. The term "personal casualty gain" means the recognized gain from any involuntary conversion of property which is described in subsection (c)(3) arising from fire, storm, shipwreck, or other casualty, or from theft.
(B) Personal casualty loss. The term "personal casualty loss" means any loss described in subsection (c)(3). For purposes of paragraph (2), the amount of any personal casualty loss shall be determined after the application of paragraph (1).
(4) Special rules.
(A) Personal casualty losses allowable in computing adjusted gross income to the extent of personal casualty gains. In any case to which paragraph (2)(A) applies, the deduction for personal casualty losses for any taxable year shall be treated as a deduction allowable in computing adjusted gross income to the extent such losses do not exceed the personal casualty gains for the taxable year.
(B) Joint returns. For purposes of this subsection, a husband and wife making a joint return for the taxable year shall be treated as 1 individual.
(C) Determination of adjusted gross income in case of estates and trusts. For purposes of paragraph (2), the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that the deductions for costs paid or incurred in connection with the administration of the estate or trust shall be treated as allowable in arriving at adjusted gross income.
(D) Coordination with estate tax. No loss described in subsection (c)(3) shall be allowed if, at the time of filing the return, such loss has been claimed for estate tax purposes in the estate tax return.
(E) Claim required to be filed in certain cases. Any loss of an individual described in subsection (c)(3) to the extent covered by insurance shall be taken into account under this section only if the individual files a timely insurance claim with respect to such loss.

If you are contacted by a company named "FEEL PERFECT INTERNATIONAL", get whatever information you can and notify the US Department of Justice agent Evan J. Davis involved with the NADN/Oryan Injunction (his email address and phone number are in the "Synopsis" on my website). That company is owned by Lee Panelli and Ric Klingenberg, and checks have the name "Success Matrix/Media Maker". They are former NADN managers who have a lot of explaining to do, like "where did you get the money to start that business while you were still at NADN"?

Michael Calvert tried to sell me a search engine from Media Maker before NADN shut down. These people are all such crooks, he even said Google might even want to buy the search engine once i got it going. I talked with him for about 25 mins before i finally said no.

Hey Robin,
Was that search engine a HEMI?

Does HEMI mean High Energy Marketing Initiative?
Sign me up.
I'll pay with the commissions I made from my Keyword Gold hit generator :-)

An IRS revenue ruling (rev. rul.) is an IRS tax decision resulting from an interpretation of an unclear regulation.
The following rev. rul. and three cases support the deduction of expenses when your activities are more than investigatory and the taxpayer has actually entered a transaction for profit and the project is later abandoned. In our case NADN went bankrupt and Oryan closed for business.

Rev. Rul. 77-254, 1977-2 C.B.63
1) Seed v. Commissioner, 52 T.C. 880 (1969)
2) Price v. Commissioner, T.C. Memo. 1971-323
3) Domenie v. Commissioner, T.C. Memo. 1975-94

******************************************
1977-2 C.B. 63; 1977 IRB LEXIS 118, *;
REV. RUL. 77-254

Rev. Rul. 77-254

Section 165. - Losses

26 CFR 1.165-1: Losses.

(Also Sections 263, 461; 1.263(a)-1, 1.461-1. )

1977-2 C.B. 63; 1977 IRB LEXIS 118; REV. RUL. 77-254

July, 1977

[*1] Losses; attempted acquisition of business. An individual may deduct, in accordance with section 165(c)(2) of the Code, expenses incurred in the unsuccessful attempt to acquire a specific business, such as legal expenses incurred in drafting purchase documents. However, expenses incurred in the course of a general search for or preliminary investigation of a business, such as expenses for advertisements and travel to search for a new business, are not deductible. Rev. Rul. 57-418 amplified.

Advice has been requested whether, under the circumstances described below, a deduction in accordance with section 165(c)(2) of the Internal Revenue Code of 1954 is allowable to a taxpayer for a loss that was not compensated for by insurance or otherwise.

An individual taxpayer began to search for a business to purchase. The individual placed advertisements in several newspapers and traveled to various locations throughout the country to investigate various businesses that the individual learned were for sale. The individual commissioned audits to evaluate the potential of several of these businesses. Eventually, the individual decided to purchase a specific business and incurred expenses [*2] in an attempt to purchase this business. For example, the individual retained a law firm to draft the documents necessary for the purchase. Because of certain disagreements between the individual and the owner of the business that developed after this decision was made, the individual abandoned all attempts to acquire the business.

Section 165(a) of the Code allows as a deduction any loss sustained during the taxable year that is not compensated for by insurance or otherwise. Section 165(c) provides that, in the case of individuals, the deduction is limited to (1) losses incurred in a trade or business, (2) losses incurred in any transaction entered into for profit, though not connected with a trade or business, and (3) losses of property not connected with a trade or business, if such losses arise from fire, storm, shipwreck or other casualty, or from theft.

Rev. Rul. 57-418, 1957-2 C.B. 143, holds that losses incurred in the search for a business or investment are deductible only when the activities are more than investigatory and the taxpayer has actually entered a transaction for profit and the project is later abandoned.

In Seed v. Commissioner, 52 T.C. 880 (1969), [*3] acq., 1970-2 C.B. xxi, the United States Tax Court allowed a deduction for expenses incurred by a taxpayer during an unsuccessful attempt to secure a charter to operate a savings and loan association. The court found that the taxpayer's extensive activities in the venture qualified as a transaction entered into for profit. Following the decision in Seed the court has continued to find that a taxpayer has entered a transaction for profit in cases in which the facts indictate that the taxpayer has gone beyond a general search and focused on the acquisition of a specific business or investment. See Price v. Commissioner, T.C. Memo. 1971-323; Domenie v. Commissioner, T.C. Memo. 1975-94.

In view of the decision in Seed, Rev. Rul. 57-418 is amplified to provide that a taxpayer will be considered to have entered a transaction for profit if, based on all the facts and circumstances, the taxpayer has gone beyond a general investigatory search for a new business or investment to focus on the acquisition of a specific business or investment.

Expenses incurred in the course of a general search for or preliminary investigation of a business or investment include those [*4] expenses related to the decisions whether to enter a transaction and which transaction to enter. Such expenses are personal and are not deductible under section 165 of the Code.Once the taxpayer has focused on the acquisition of a specific business or investment, expenses that are related to an attempt to acquire such business or investment are capital in nature and, to the extent that the expenses are allocable to an asset the cost of which is amortizable or depreciable, may be amortized as part of the asset's cost if the attempted acquisition is successful. If the attempted acquisition fails, the amount capitalized is deductible in accordance with section 165(c)(2). The taxpayer need not actually enter the business or purchase the investment in order to to obtain the deduction.

Accordingly, in the present case, the individual may deduct as losses incurred in a transaction entered into for profit the expenses incurred in the unsuccessful attempt to acquire a specific business. Thus, the individual's expenses in retaining a law firm to draft the purchase documents and any other expenses incurred in the attempt to complete the purchase of the business are deductible. [*5] The expenses for advertisements, travel to search for a new business, and the cost of audits that were designed to help the individual decide whether to attempt an acquisition were investigatory expenses and are not deductible.

Rev. Rul. 57-418 is amplified.

*********************************************
Case #1
52 T.C. 880, *; 1969 U.S. Tax Ct. LEXIS 66, **
Harris W. Seed and Nancy C. Seed, Petitioners v. Commissioner of Internal Revenue, Respondent
Docket No. 5592-67
UNITED STATES TAX COURT
52 T.C. 880; 1969 U.S. Tax Ct. LEXIS 66
August 28, 1969, Filed
DISPOSITION: [**1]
Decision will be entered under Rule 50.
CASE SUMMARY
PROCEDURAL POSTURE: Respondent commissioner determined a deficiency in petitioner taxpayers' income tax for the calendar year 1964 in the amount of $ 3,385. The taxpayers conceded that their tax liability was understated by $ 2,547 due to a mathematical error. The amount remaining in contention was thus $ 838.
.
OVERVIEW: The taxpayers were seeking to realize a profit from a role in the savings and loan association venture and that the venture was eventually abandoned after the taxpayers expended the sum of $ 1,566 in its furtherance. On their tax return, the taxpayers treated the pro rata share of the amounts expended as a loss from a transaction entered into for profit under I.R.C. § 165(c)(2). The commissioner disallowed the deduction. The sole issue for decision was whether the taxpayers entered into a transaction for profit under § 165(c)(2). The commissioner contended that the taxpayers did not proceed as far as necessary with their project so that it can be fairly said that they entered into a transaction for profit. The deduction was allowed. The court concluded that the extensive activities of the taxpayers, as a participants in a joint venture to secure a charter for a savings and loan association, of which they would be a shareholder if the venture proved successful, qualified as a "transaction" within the purview of § 165(c)(2).
.
OUTCOME: The taxpayers were entitled to treat the pro rata share of the amounts expended as a loss.
.
**********************************************
Case #2
T.C. Memo 1971-323; 1971 Tax Ct. Memo LEXIS 8, *;
30 T.C.M. (CCH) 1405; T.C.M. (RIA) 71323
Theodore R. Price and Lois S. Price v. Commissioner.
Docket No. 2093-70.
UNITED STATES TAX COURT
T.C. Memo 1971-323; 1971 Tax Ct. Memo LEXIS 8; 30 T.C.M. (CCH) 1405; T.C.M. (RIA) 71323
December 23, 1971, Filed.

CASE SUMMARY

PROCEDURAL POSTURE: Petitioner taxpayers sought review of a determination by respondent Commissioner of Internal Revenue (IRS) that they had deficiencies in their federal income tax.
.
OVERVIEW: The taxpayer claimed a deduction for money paid from his personal funds to a security company to conduct an investigation of a prospective employee of the taxpayer's employer. The court found that the payment had no relationship to the taxpayer's employment duties, rather, the taxpayer voluntarily assumed payment on a determination that the expenses would best be incurred by him rather than his employer. The court found that because the payment was voluntary it remained a "ordinary and necessary expense" of the employer. The court also found that the taxpayer could not deduct money spent in the pursuit of organizing a national bank because the expense was a capital expenditures. The court did find, however, that the taxpayer could deduct under I.R.C. § 165(c)(2) the loss sustained in the year the project was abandoned. The court also found that the taxpayers failed to prove that they suffered a theft loss in connection with the construction of their home within the meaning of I.R.C. § 165.
.
OUTCOME: The court entered a decision affirming in part the determination of the IRS that the taxpayers had income tax deficiencies.
.
************************************************
Case #3
T.C. Memo 1975-94; 1975 Tax Ct. Memo LEXIS 278, *;
34 T.C.M. (CCH) 469; T.C.M. (RIA) 750094
JOHAN DOMENIE and ANNE M. DOMENIE, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5652-73.
UNITED STATES TAX COURT
T.C. Memo 1975-94; 1975 Tax Ct. Memo LEXIS 278; 34 T.C.M. (CCH) 469; T.C.M. (RIA) 750094
April 7, 1975, Filed

CASE SUMMARY

PROCEDURAL POSTURE: Petitioner taxpayers, a husband and wife, sought review of respondent commissioner's determination of federal income tax deficiencies involving the taxpayers' claim for miscellaneous expenses in connection with the acquisition of a business.
.
OVERVIEW: Taxpayer husband proceeded with the acquisition of a business, but ultimately abandoned the endeavor. The taxpayers claimed miscellaneous expense deductions. The commissioner found an income tax deficiency when the deductions were disallowed. The court found that the issues for decision were: 1) whether the expenses incurred in connection with the proposed acquisition of the business were deductible under I.R.C. § 162(a)(2), I.R.C. § 212(1), or I.R.C. § 165(c)(2); and 2) whether the expenses incurred by the taxpayers in advertising for a business and for a trip to Florida were part of the expenses incurred in connection with the proposed acquisition of the business or purely personal expenses. The court held that the expenses were deductible under § 165(a)(2). While subsequent developments compelled taxpayer husband to abandon the transaction, this was not a bar to the deduction of the expenses as having been incurred in a transaction entered into for profit within the meaning of § 165(c)(2). The taxpayer was entitled to deduct the expenses incurred as a loss. The advertising expenses and trip to Florida were not deductible as a loss.
.
OUTCOME: The court partially sustained the taxpayers' petition, finding that the expenses incurred in connection with the abandoned business acquisition were deductible as a loss.

There is an interesting article in the Wall Street Journal today regarding illegal tax shelters. The only real similarity to our situation is that people sought advice from “experts” at KPMG and a large NY law Firm Brown & Wood only to learn later they were in cahoots and the IRS didn’t approve the losses generated by the shelters as legitimate.

So, if you are robbed at gun point, can you take what was stolen as a loss on your taxes? Just wondering if the only difference is the weapon (and the amount of "cash" I carry is much less than what NADN took).

Tax fraud has always been a problem. Stories that highlight the problem could help us argue that our situation is different in several ways, including the number of victims and the fact that we "purchased" an online shopping business with the intention of earning revenue, not just a tax shelter. Continued reporting of tax abuse and fraud cases can keep the pressure on for serious tax reform.

I am also one of the victim. I believe Opaobie, Angry Guy, RMarie, NG ..... and many more are doing a great help by providing these info.

Here is a list of what I had purchased from NADN.

- had 2 malls
- 2 hit generators
- 10 year elite membership that includes audit protection and tax prep for individual
- corp package
- 10 year audit protection and tax prep for corp
- 5 year office package

Mall websites:
After a week Orayn got closed, my malls are not working. Does any one else's mall working?

Hit generators:
I called Keyword Gold for the alternatives (refund the balance or provide some other arrangement) as Oryan has been closed and they said they will get back to me within couple of weeks and even after 3 weeks they haven't come back to me. Did any one else contacted them?

Observation... I've been reading some of the Business vs. Tax Shelter arguments for these online Shopping Malls... Let me point out... the expenses et al. involved didn't appear to balance any tax savings unless you expected income as I did... so why would anyone (IRS, DOJ...) think that these were entered into for any other reason than a business? We now know that the Sponsor two dollars a click was artificial, but didn't when we bought... I'm not sure how the clicking off the note worked... if the site allowed more than one click per visit to the individual Sponsors then that seems like enticement... Even if only a portion of the clicks were from potential customers then you were operating it as a business... I know that I checked operation of elements frequently because the site didn't work well frequently... that included the operation of Sponsor Links as well as other advertisers... Isn't that a part of running this sort of business? From reading posts online these malls were also sold to income groups that didn't need any tax shelters, including semi-retired and unemployed

I contacted Keyword several time about a refund and was told repeatedly that they owe me nothing and that I had to go after NADN to get my money since that is who I paid the money to in the first place. If anyone has heard differently, I would like to know.

M76106
Sounds like you sunk a lot of money. I recommend you file a claim with the Nevada bankruptcy court against the NADN estate. (I think details are listed in previous posts here or on Opaobie's site).
While I personally am not too hopeful to recover anything from the NADN estate, you have to try to recover if later we are able to claim as some type of theft loss on our taxes. Deadline in early October.
Also, Oryan Management closed their doors back in July and subsequently the malls are no longer operating.
I feel your pain; You, me and thousands of other victims are going thru it too. I finally beginning to get over the initial shock.
Also, contact your state Senator and congressman; Opaobie posted a form letter on August 11 (scroll up) that you can use if you want.

If anyone is interested, I found this on Google.com:

Robert D Goetsch - (510) 733-5752 - 28023 Dobbel Ave, Hayward, CA 94542

Dear NADN/Oryan Victims,
The IRS lists several schemes on their "Misuse of Disabled Access Credits" website:
http://www.irs.gov/businesses/small/article/0,,id=106483,00.html
Along with the Virtual Internet Malls the IRS lists the Coin-Operated Telephones scheme. I found on the IRS website an internal memorandum prepared by IRS field attorneys to relay guidance to examination personnel and appeals officers regarding the Coin-Operated Telephones scheme. The IRS attorneys have an acronym after their name of SBSE which I am assuming stands for Small Business Self Employed unit. This scheme is very similar to the Malls. It states that the way the losses will be accepted by the IRS, 165(c)(2) or 165(c)(3), is at the discretion of the auditor. It sounds like if you can show "profit motive" to the auditor then you may be able to deduct the losses as 165(c)(2) losses. It is interesting that the company declared bankruptcy like NADN and the point at which the trustee determines there is no chance of recovery for the creditors is important for establishing the year of loss.
**********************************************
Coin-Operated Telephones
One such promotion involves the sale of expensive coin-operated pay telephones to individual investors, rather than businesses. As part of the sale, the company agrees to lease back and service the phones, usually for a fee. Investors are promised low risk, steady income with guaranteed annual returns. Investors are also incorrectly advised that they are entitled to claim a Disabled Access Credit of up to $5,000 on their individual tax return because the telephones have volume controls.

The Federal Trade Commission has determined these promises are false and misleading. Consumers are being deceived about the availability of local, profitable payphone locations, start-up assistance and equipment they would receive as part of the venture, as well as their ability to claim the Disabled Access Credit. The telephones are not even delivered in some schemes.

Under IRC § 44, the IRS disallows the credit to taxpayers not operating a business or not qualifying as an eligible small business. The IRS also disallows the credit if the purchase is not an expenditure that makes a business accessible to disabled individuals.
********************************************
District Counsel Advice Memoranda (DCAs) are a
type of internal legal memo prepared by IRS field attorneys to relay guidance to examination personnel and appeals officers. DCAs provide field personnel legal analysis of issues arising out of taxpayer specific cases. DCAs that have been publicly released are available on the
IRS’s website at http://www.irs.gov/pub/irs-lafa/.
***********************************
Here is the link to the memorandum regarding the Coin-Operated Telephones scheme:
http://www.irs.gov/pub/irs-lafa/042302f.pdf
***********************************
Internal Revenue Service
memorandum
Number: 20042302F
Release Date: 6/4/04
POSTS-116188-03/CC:SB:2:PIT
date: June 30, 2003
to: James South, Technical Advisor, Abusive Promotions
from: Edward J. Laubach, Jr. and Julia L. Wahl
Attorneys (CC:SB:2:PIT:POSTS:116188-03:JLWahl)
subject: Timing of Loss:
UIL 44.60-00
This responds to your request for advice on the proper time
for investors in the
payphone scheme to deduct losses. This memorandum
should not be cited as precedent.
ISSUES
1. Are investors in the payphone scheme
entitled to a loss deduction?
2. If so, what is the type of loss to which they are
entitled?
3. In what year would they be entitled to the loss?
4. Are amounts which paid to investors in 2001
before filed for bankruptcy taxable or are they a
return of capital?
CONCLUSIONS
1. Most investors are entitled to a loss deduction.
2. Most investors will be entitled to a loss under I.R.C. §
165(c)(2) as a loss incurred in a transaction entered into for
profit. Taxpayers who invested for the purpose of avoiding taxes
might not be allowed a deduction.
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1This base amount was allegedly eliminated in .
3. Investors may generally claim the loss on their tax
returns.
4. Amounts which paid investors during 2001
prior to filing bankruptcy are taxable.
FACTS
of , was in
the business of placing, selling, and maintaining public
payphones in is owned
by . , a securities and insurance
agent, devised a plan whereby payphones could be sold to
individual investors. He approached about his idea
in 1997. agreed that this plan was enticing and
began selling some of its payphones to individuals looking for a
good annual return and tax advantages. Thereafter, formed
on ,
1998, to market payphones which allegedly complied with the
Americans With Disabilities Act (ADA). These payphones had
longer cords, volume controls, and other minor improvements which
allowed their use by the disabled.
sold the disabled accessible payphones to investors for
a price of $ ($ after April 1999) per phone.
purchased these payphones new or refurbished from manufacturers
at a wholesale cost of $ to $ per phone. For the
purchase price, the investor purportedly received ownership of a
payphone at a location solely selected by . A purchaser of an
payphone had four options upon purchase. The first option
required that the purchaser handle all aspects of the phone's
maintenance and earnings. Two other options transferred some of
the phone's responsibility to . Ninety percent of the
purchasers chose Option Four.
Under Option Four, the purchaser of the payphone entered
into, in essence, a sale and leaseback agreement with .
then assumed total responsibility for collecting the coins
from the phone, cleaning and maintaining the phone, accounting
for the profits, paying the expenses of the phone, such as the
telephone service provider, and issuing a check for the net
profits to the owner. Although the owner was supposed to receive
percent of the net profits monthly, was, in fact, paying
all investors a base amount of $ 1 a month regardless of the
phone's location. This payment generated a percent annual
return to the purchasers. In addition, the purchaser had the
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2This right to return the phone is variously described as a
buy back provision or an extended warranty on the phone.
Apparently, a $ fee was charged if the phone was returned
within three years of purchase.
3For purposes of the passive loss rules of I.R.C. § 469,
this income is characterized as portfolio income and is not
passive activity gross income. I.R.C. § 469(e)(1)(A). Thus the
passive activity loss rules do not apply.
right to return the phone to and receive nearly all of his or
her purchase price back.2 Thus, a purchaser under Option Four
merely sat back and received a monthly check for $ 3 and
could return his phone for nearly all of his investment at any
time.
Aside from the economic advantages of the payphone
investment, heavily stressed the tax advantages of the
payphone, primarily the disabled access credit under section 44.
told its investors that they could claim a credit on their
tax returns of percent of the purchase price of the phone up
to $ . In addition, some investors were advised to claim
the other half of the purchase price as a section 179 deduction.
A tax opinion was provided from which
said that the payphone qualified for the section 44 credit
although this opinion contained no real discussion how this
investment so qualified.
The sale of the payphones has been attacked by several
state securities commissions and the SEC. These governmental
agencies contend that the payphone investment is a "security"
which must be registered with them. On , 2002, the United
States District Court for the District of issued a
permanent injunction barring from selling unregistered
securities. ceased selling the payphone investment in
, 2001.
.
In connection with the SEC action, the District Court
appointed a receiver for on , 2002 to attend
to business and civil matters. had already filed a
petition under Chapter 11 of the Bankruptcy Code on ,
2001. The receiver has been keeping interested parties informed
of the status of the bankruptcy case.
On 2002, the receiver informed investors of the
status of the case by letter. He had obtained court approval to
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sell property of and hoped to auction the pay telephone
routes. The letter included this statement:
Finally, as for the amount of return to investors, the
Receiver believes that the sale of the payphone routes
will generate only a nominal return to investors, if
any. Additional sums could be distributed if the
Securities and Exchange Commission is successful in
disgorging assets from the individual defendants in
this case. To date, the Receiver has no information
that would suggest that such payments will be
forthcoming.
One year later, by letter to investors and creditors dated
2003, the receiver described his efforts to market the
payphones of and itself. The payphones yielded very
little money and there was no interest in . The receiver
advised in the letter:
At present, I do not believe that there will be
sufficient money in the receivership to make a payout
to the investors or creditors in this case. I am
pursuing several avenues that may generate revenue;
however, there is no guarantee of success.
DISCUSSION
Section 165(a) of the Internal Revenue Code provides that
there shall be allowed as a deduction any loss sustained during
the taxable year and not compensated for by insurance or
otherwise.
I.R.C. § 165(c) provides that in the case of an individual,
the deduction under subsection (a) is limited to losses incurred
in a trade or business; losses incurred in any transaction
entered into for profit, though not connected with a trade or
business; and losses of property not connected with a trade or
business if such losses arise from fire, storm, shipwreck, or
other casualty, or from theft.
Section 1.165-1(c) of the Income Tax Regulations provides
that the amount of the loss allowable as a deduction shall not
exceed the adjusted basis for determining the loss from the sale
or other disposition of the property involved, as prescribed by
§ 1.1011-1. Accordingly, to the extent an investor has claimed a
depreciation deduction or an ADA credit with regard to the
investment in taxable years that are closed and not audited, the
loss deduction will be reduced.
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4 If Examiners find investors who clearly made the
investment to obtain the bogus tax advantages, no loss should be
allowed as discussed elsewhere in this memorandum.
5 Examiners may encounter investors who have filed lawsuits
against third parties such as the individual or firm which sold
them the payphone investment. Those investors might not be
entitled to deduct the loss until a later year when the suit is
resolved. Alternatively, closing agreements could be entered
allowing the loss in 2003 if the taxpayers agree to include any
future payout in income in the year received.
The question may arise as to which of two sections allows
the loss deduction: I.R.C. § 165(c)(2), which allows individuals
to deduct losses incurred in transactions entered into for
profit, or I.R.C. § 165(c)(3), which allows individuals to deduct
losses from theft. The distinction matters because I.R.C. §
165(h) limits the deductibility of I.R.C. § 165(c)(3) theft
losses but does not limit I.R.C. § 165(c)(2) losses.
From what we have heard about the investor pool, we expect
that most investors invested in the payphones with an expectation
of making a profit4. Also, although the promoters may have
engaged in activities that violate federal and state securities
laws, the record does not indicate that these actions resulted in
theft losses. Accordingly, the investors’ losses are allowable
under I.R.C. § 165(c)(2) and are not limited by I.R.C. § 165(h).
Investors were promised a minimum 14 percent return on their
investments and had a motive other than tax avoidance to invest.
Nevertheless, aud