Monday, March 3, 2014

That guy in the BlueStar video? The accountant in athlete Lenny Dykstra’s fraud case

Posted By on Mon, Mar 3, 2014 at 6:07 PM

This week, we published an in-depth investigation into Erick Hansen, the president of BlueStar Digital Technologies, a beleaguered Blu-ray plant in Spokane.

If you’ve watched BlueStar’s video newsletter to investors, uploaded a week after the FBI raid, you may notice a guy named Robert Leslie Hymers the III. He’s the corporate-looking guy in the thick glasses, the first to talk after Hansen.

“We’re starting to get a hold of everything that’s out there,” Hymers says. “It’s not a lot out there, but there are a few issues that are rather vocal and very visible. So we’re doing everything that we can to mitigate the damage, to protect your investment, to protect the company as a going concern, and to make sure that we can isolate the damage and be able to, you know, achieve a good outcome for everybody.”

The video calls him an employee of the accounting department of the law offices of Darin Shaw, the attorney aiming to take BlueStar public. Hymers has also been named as an associate producer and production accountant for BlueStar’s sci-fi movie Dominion.

You probably haven’t heard of him. Unless, of course, you’re a die-hard Mets or Phillies fan.

Lenny Dykstra played center fielder for the Mets in the ’80s and the Phillies in the ’90s. After his retirement, he experienced improbable success — picking stocks, publishing a financial magazine aimed at wealthy athletes.

Hymers was his accountant.

And when all that collapsed, when Dykstra fell into bankruptcy, when he was accused of bankruptcy fraud, obstruction of justice, filing a false financial statement, and grand theft auto, Hymers was tangled up with him.

Here’s an LA Times story on the indictment from 2011.

Los Angeles County prosecutors said Dykstra, 48, along with his accountant Robert Hymers, 27, and friend Christopher Gavanis, 30, tried to claim credit through a phony business and stolen identity. Beginning in January, the trio tried to lease high-end cars from several area dealerships.

"He has scammed everybody he knows," Deputy Dist. Atty. Alex Karkanen said. "They faked pay stubs. They faked income information for the company. They made it all up on a laser printer at home. And when the dealers asked for a co-signer, they said their financial officer would sign."

The so-called financial officer was actually an unsuspecting customer of the accountant, Karkanen said, adding, "He knew nothing about them using his identity.

At two dealerships, Dykstra and Hymers provided information for the "co-signer," but the leases were not approved. At one of the dealerships, Dykstra, Hymers and Gavanis provided fraudulent information and drove off with 2011 models of a Ford Mustang, Ford Flex and Lincoln MKS, Karkanen said.

Maria Ramirez, head deputy district attorney in charge of the auto fraud unit, said Dykstra's company, Home Free Systems, "doesn't even exist.… He's hardly a financial guru."

They "presented the company like it was making millions of dollars when it was not," Ramirez said.

And here's an in-depth 2012 Sports Illustrated story that dives even further into to the strange case, including the use of forged documents:

The case of [identity theft victim] Wilberto Hernandez didn't exactly fit the pattern of the earlier complaints against Dykstra. Unlike the others, Hernandez barely knew the ex-player. They had met once, in September 2010, introduced by Robert Hymers, a mutual friend and a mild-mannered, churchgoing, then 27-year-old accountant at Ernst & Young. On Valentine's Day 2011, when Hernandez followed up on his call to the police by coming in to speak with [LAPD detective Juan] Contreras, he brought Hymers with him.

Hymers told police that he had introduced Hernandez to Dykstra so that Hernandez could help Dykstra improve his credit. At the time, however, Hernandez did not realize that Hymers, who had been doing financial work for Dykstra outside of his employment with Ernst & Young, had been seduced by Dykstra's lifestyle—riding in fancy cars, meeting retired ballplayers and hanging out with celebrities, including Charlie Sheen. Hymers told Contreras that he loaned Dykstra money and credit cards and would later tell police that spending time with Dykstra was "like being in a movie."

In late 2010, Hymers, according to a taped interview that police conducted with him on Feb. 14, 2011, began helping Dykstra package assets—specifically his MLB pension and a stake in the online celebrity poker site Hollywood Poker—to be sold or used as collateral to obtain loans. Dykstra promised Hymers equity in his new business Home Free Systems, ostensibly set up to help people refinance predatory home mortgages. Dykstra had also introduced Hymers to Sheen, with whom Hymers hoped to partner on an energy drink with the slogan, "Sheen power, Sheen blood, Sheen energy."

….

Hymers was dazzled by the possibility of earning money with Sheen; in a second police interview, on March 22, 2011, he referred to Dykstra as "Sheen rich and cash poor." Hymers also portrayed himself to Contreras as a friend who tried to help Dykstra, of whom Hymers told police, "Some nights he'll be in Beverly Hills staying in a hotel, and other nights he'll be in his car." He recounted trying to take Dykstra to his church: Hymers said Dykstra immediately claimed to smell mold in the church and had an insurance adjuster come to the building after hours to inspect it, claiming that the adjuster was a friend who would give him a kickback if there was money to be made from a claim. "I've never been good with profiling people," Hymers told Contreras. "Lenny took advantage of that."

Dykstra was sentenced to three years in prison. Hymers copped to a no-contest plea of one count of identity theft as part of a plea bargain, with the agreement that he would only be actually sentenced to a misdemeanor. He was forced to do 30 days of community service and pay about $12,000 in restitution.

Darin Shaw, also featured in the BlueStar video, helped Hymers get his misdemeanor record expunged this January: Legally, it’s almost like his no-contest plea never existed.

Hymers, reached by phone Monday, doesn’t believe he did anything morally wrong in the Dykstra case. He says he was a victim of Dykstra and a series of misunderstandings, and says the main victim in the case remains his best friend. Hymers' version: He was originally acting as an informant, voluntarily giving the police information before he was swept up with the indictments of Dykstra.

“I got fired from my job, everything. My whole life changed,” Hymers says. “It’s the worst thing that could happen with a [Certified Public Accountant]. The next three years, I’ve been working feverishly to rebuild.”

That struggle, he says, made him attractive to Hansen. “He could come to a young professional who could give him a huge discount, because he knows [my] reputation is a little tarnished,” Hymers says. “I took on Erick Hansen at a time I couldn’t turn away any clients, unless he was a blatant criminal. I gave him a discount because of my past.”

He says he was told Hansen wanted his help cleaning up the mess left by previous accountants and getting the books in better shape. But Hymers rapidly found himself doing more than that: He says Hansen heaped other tasks on him — like reviewing the script of Hansen’s alien invasion movie — and made clear they were bigger priorities.

“The guy can’t even draft an email,” Hymers says. “He needs to lean on people who are just competent in writing things. He can’t sit behind a computer and do things that a CEO is supposed to do.”

When Hymers was interviewed for the video, he says, there was a lot he wasn't told about, like the ongoing FBI investigation. He had over 60 other clients to deal with, he says, and was fooled like so many others.

“Maybe they thought I was a good front guy. Here’s this clean-shaven, right-wing accountant from Ernst and Young,” Hymers says. “The video was made prior to the FBI raid. I think that Erick knew something was going to go down, and that’s why he was expediting the video.”

Records show that Hansen did know the FBI was investigating his company, long before the actual raid. A little after the FBI conducted their search warrant, Hymers says he severed all ties with BlueStar.

Early this year, one of BlueStar’s largest investors contacted Hymers with general concerns. On Feb. 5, 2014, Hymers’ attorney sent this brutal reply:

I represent Mr. Robert L. Hymers.

I am informed and thereon believe that the Principals of BlueStar are about to be indicted by the state and federal authorities for an array of crimes relating to the scheme they concocted to raise capital on behalf of BlueStar.

Mr. Erick Hansen is the primary target of this pending indictment – and unless Mr. Hansen and his attorneys work out a pre indictment deal with the prosecuting agencies, I am informed and thereon believe that Mr. Hansen WILL be indicted.

As you are well aware, any methodology implemented by BlueStar to raise capital has nothing to do with the conduct and activities of Mr. Hymers, who has not, and does not, and will not, be affiliated either directly or indirectly with a criminal enterprise or any of its activities.

Mr. Hymers has been used and abused and manipulated and deceived by Mr. Hansen, who as you know is not only uneducated and practically illiterate, but also has no legitimate education and experience and qualifications that would prepare him to administrate and operate BlueStar.

If you would like to discuss the foregoing or work with Mr. Hymers to do the right thing and protect the otherwise legitimate aspects and assets of BlueStar please let us know.

Sincerely,

Joyce H. Vega

Hymers says he doesn’t need or want more publicity, but that he's willing to cooperate to get the full story out. He too believes he’s been defrauded by Hansen. The sheer quantity of problems with BlueStar, he says, means the issue “passes over from being a forgivable mistake to a pervasive moral issue.”

“My feeling is somewhat shell-shocked. I’m apprehensive. I’m getting flashbacks of Dykstra,” Hymers says today. “I don’t want to be the fall guy again.”

Hymers is far from the only one at BlueStar with trouble in his past: Here are just a few of the other people involved with Blue Ray/BlueStar, besides Erick Hansen, who’ve weathered accusations of financial misdeeds:

The former Chief Financial Officer of the company, Yelena Simonyan, was fired from Blue Ray Technologies after the company learned, thanks to an investor who ran a background check, that she had a felony fraud conviction. Later Simonyan tried, unsuccessfully, to sue the company to disclose their financial records.

Sean Michael (full name: Sean Michael Borzage Boyd), who’s served as BlueStar’s executive vice president of global business development, has been the subject of multiple state anti-fraud actions, and not just in Washington. In 2003, working for a company called ESS Environmental, he was sent a Cease and Desist letter from the Texas State Securities Board for selling unregistered securities. And in 2008, another company he worked for, SmartWear Technologies, was dinged by the California Department of Corporations for selling unregistered securities, omitting important information, and making false claims (say, claiming SmartWear had a contract with the Port of Los Angeles and Disney — they didn't). In 2012, a judgment came down from a three-year civil case on the matter, and Michael and several of his SmartWear colleagues were forced to pay a total of at least $25 million.

I sent Michael an email to ask for his response last week, and will update this post if I receive one.

Brian Main, who was con artist Greg Jeffreys’ partner in many of his Ridpath transactions, was tapped as BlueStar’s Executive Vice President of European Markets in August 2009. Only a few months later, Main was named with Jeffreys in a separate fraud suit from California investors. (It’s worth noting that, in a 2013 Spokesman-Review article, Main claims he was just another victim of Jeffreys.)

Allen Pabst, an engineer and the company’s recently appointed Vice President of Operations, has had to deal with numerous websites accusing him of stealing identities and running a fake airline ticket scam. Pabst hasn’t been charged with anything and says he’s innocent. He claims he himself is a victim of identity theft by the scammer, and he’s spent a lot of time and money to clear his name and make the accusations less visible online. In the comments of one of these posts, he says he’s proven his innocence.

And that's just a sample.

The takeaway: BlueStar has long been fighting fraud accusations, and yet the company has repeatedly partnered with people who’ve either been scammers, victims of fraud, or both.

(An additional bit of odd Six Degrees of Erick Hansen trivia: BlueStar’s connected to accountant Robert Hymers who’s connected to Charlie Sheen. The famous 1987 movie Wall Street, one of Dykstra’s favorite movies, stars Charlie Sheen as a fictional stockbroker who manipulates the stock of an airline company called, that’s right, Bluestar.)
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