March 31, 2017
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — I will Physically attack any Witness from my Seat at my Trial who says Ponzi says Former SBA License Owner Mark Feathers
The sad saga of Mark Feathers took another bizarre twist when a judge revoked his $250,000 bail bond last week.
The former owner of one of the 14 SBA non-bank SBLC lending licenses reported to the Santa Clara County Jail for incarceration 24 hours later, last Friday.
This 5:32 am March 7th email hit the inbox of the elite eight who were the object of Mark’s ire, to change his, and their, lives forever:
I’ll report the reaction of the recipient’s soon.
But first the judge.
He said the email violated the terms, not to threaten anyone who would testify against him.
Mark’s promise to leap over the defense table and attack anyone seated in the witness stand who uttered the words “Ponzi” changed his residency status from father and husband to incarcerated for the rest of the year.
Welcome to county jail.
A few excerpts from courthousenews.com’s reporting:
U.S. Magistrate Judge Howard Lloyd revoked the $250,000 bail for Mark Feathers, who is accused of bilking investors of approximately $50 million between 2009 and 2014.
Lloyd said the threatening email Feathers sent to at least six officers of the court, including his own lawyer, violated the terms of his release.
“I do so with sadness and regret, but I feel it is the proper decision,” Lloyd said.
Federal public defender Rita Bosworth acknowledged her client’s email was “inappropriate,” while trying to avoid acknowledging any wrongdoing by her client in the event criminal charges are brought because of the email.
“I am trying to convey how this has taken over his whole life,” Bosworth said.
“It’s hard to understand what he has been through. His house has been foreclosed upon, his family is precariously cobbled together, he’s lost his job and his career.”
Feathers, who was in court, handled legal defeat stoically.
The judge gave Feathers one day to get his personal affairs in order and ordered him to report to federal court on Friday to be remanded to the custody of the U.S. Marshals.
[U.S. Attorney] Lucey said Feathers is a flight risk and asked that he be taken into custody immediately.
“He’ll be here tomorrow,” Lloyd responded.
On the other side of the coin, read the raw emotion and fear for themselves and their family from Mark’s threat in the following victims’ statements to the FBI.
Victim 1 (V1)
- V1 had just arrived at work when he read the email on an office computer. V1 was taken back and perplexed by the email as it seemed out of the blue. This made the email more alarming.
- V1 had personal interactions with Feathers in the past both inside and outside the courtroom. V1 had received threatening emails from Feathers previously, but V1 was usually included on the “cc: line” of the email and not the “to: line” of the email. For the email dated March 7, 2017, V1 was included on the to: line of the email.
- V1 noted that the email dated March 7, 2017, was the first time that Feathers had threatened violence in an email. There were times in court when Feathers had become so angry that V1 had been concerned for V1 ‘s safety. V1 was stunned that Feathers would make the statements that he made. This most recent email made V1 concerned for V1 ‘s safety again.
- V1 and V1 ‘s client, Victim 2 (V2), had made it a point to be very careful in how they communicated with Feathers in order to avoid saying anything that might provoke him. V1 was concerned for V2’s safety because it was possible V2 would have to testify in Feathers’ criminal trial.
Victim 2 (V2)
- V2 first read the email at home on a mobile phone. V2 had received hundreds of emails from Feathers in the past, some of which threatened V2’s career. The email dated March 7, 2017 was the first email in which Feathers made physically threatening statements.
- V2 believed that the phrase “Ponzi scheme” was an accurate description of Feathers’ actions, as Feathers deceptively created liquidity. Despite the email threat, V2 believed he would continue to use the phrase “Ponzi-like behavior” as part of his testimony, were he called to testify. V2 anticipated having this email threat on V2’s mind in the future specifically because the matter was unfinished; V2 could be called to testify in the upcoming criminal trial.
- Even though V2 felt sorry for Feathers, this email caused him alarm and V2 felt unsettled and intimidated. V2 found the email disturbing and it caused him stress. V2 went on to note that V2 felt both harassed and badgered by Feathers. Feathers was ex-military and V2 was not sure if Feathers owned any weapons.
Note: Following the interview with V2, the FBI verified that Feathers was previously an active member of the Navy between the dates of November 21, 1986 to December 28, 1989, and received an honorable discharge.
Victim 3 (V3)
- V3 first read the email at home on a mobile phone. V3 had previously heard Feathers make inflammatory comments in open court. In previous civil court proceedings, Feathers had vowed revenge against the Securities and Exchange Commission (SEC) team and had been upset by the use of the word “Ponzi.” The email dated March 7, 2017, however, was the first time that Feathers had threatened V3 with physical injury.
- V3 had been concerned by some of the statements that Feathers had made in the past. Specifically, when V3 would walk V3’s dog at night, V3 would worry about V3’s safety. After reading the subject email, V3 played different scenarios through V3’s mind of what could potentially happen in the future between Feathers and V3. It was possible that V3 would have to testify in the criminal trial. Ifhe were called to testify, V3 believed he would have to use the word “Ponzi” in order to testify truthfully. V3 believed that if someone, including V3, used the word “Ponzi” in court, Feathers would likely try to cause physical harm to the individual.
- V3 noted that the statements that Feathers made in the email dated March 7, 2017, were new and should be taken seriously. V3 believed that Feathers meant what he said. V3 would like to think that this email will have no impact on V3’s future life. V3 was aware that V3’s personal address was readily available online and hoped that it was unlikely that Feathers will visit V3’s home and cause V3 harm. V3 noted that this situation was very sad. As a human being this latest email worried V3, but that being said, V3 pledged to still do V3’s job.
Victim 5 (V5)
- V5 first heard about the email after seeing communications between other recipients of the email. V5 noted that Feathers had sent early morning and late night inflammatory emails in the past, but this was the first one that included physically threatening statements.
- V5 believed that the email was specifically directed at V5 as well as the other individuals that received the email. V5 believed that Feathers was capable of violence and carrying out his threat and took the email seriously. V5 understood the threat in the email not only to apply to the upcoming criminal trial, but also to include any future court filings. V5 believed that Feathers ran a Ponzi-like scheme and that, despite the email threat, V5 would continue to use the word Ponzi if needed.
- V5 had threatening encounters with Feathers in the past. On one occasion that occurred prior to the filing of the Indictment, Feathers had had an over-the-top reaction to something V5 said in the courtroom. Feathers began screaming at V5 calling V5 “indecent.” On another occasion, Feathers had placed himself between V5 and the exit of the courtroom, and stated that Feathers would “see her [V5] in hell” and called her, to the best of V5’s recollection, a “lying piece of s**t” or “lying b**ch.” The scheduling clerk apparently overheard the comment and notified the court marshals, who proceeded to escort V5 out after Feathers left the courtroom.
As a trial Attorney, V5 was generally not a person who was easily intimidated or afraid of confrontation; however, Feathers was stressful to be around. V5 was not afraid of Feathers, but being around him required hyper alertness and vigilance. V5 would not want to be alone in a confined space with Feathers, but was willing to be in a courtroom with him.
Victim 6 (V6)
- V6 first heard about the email when V6 viewed it at home on a mobile device. V6 noted that this email was different than prior emails because it included a threat of bodily injury.
- Feathers has sued V6 personally in the past, because he apparently blamed V6 for the downfall of Feathers’ entity. In 2014, V6 changed the online publicly viewable address associated with V6’s professional license from V6’s home address to V6’s work address because V6 was concerned Feathers would show up on V6’s front porch; V6 was worried about what Feathers might do. Feathers made V6 feel uncomfortable. V6 noted that the email dated March 7, 2017, furthered V6’s concern that Feathers may show up at V6’s residence. V6 also took note of the fact that V6 was listed first on the “to: line” of the email.
- V6 was not sure if Feathers was serious about what he said in the email, but noted that it would be foolish not to take Feathers at his word. The language in the email made V6 concerned for V6’s own personal safety, the safety of V6’s family, and the security of V6’s property. As a result of the email dated March 7, 2017, V6 was looking into purchasing security cameras for V6’s home.
Mark Feathers trial for 29 counts of fraud is scheduled for next January.
His problems could be enhanced with criminal charges stemming from the email.
His company, Small Business Capital was seized by the feds in 2012 for running a Ponzi-like scheme with his investors and a summary judgement of $7 million was entered against him.
The SBLC license and loan portfolio were sold last year to BYL Finance.
The receiver is in the process of concluding the receivership and distributing the final proceeds (of what is left) to investors.