hoffman letter to securepay

8/8/2019 Hoffman letter to SecurePay

1/5

DANIEL A.EHRINGATTORNEY AT LAW

20CORPORATE WOODS BLVD.ALBANY, NEW YORK 12211

TELEPHONE (518) 439-9999FACSIMILE (518) 439-9253

November 27, 2009

Via US Express Mail Via US Express Mail Via US Express Mail

US US US

Mr. Kevin J. Weller Mr. MacAllister Smith Mr. Stuart C. Harvey, Jr.

President CEO CEO

Northern Merchants Services, Inc. Pipeline Data, Inc. Elavon, Inc.3 West Main Street 4400 N. Point Parkway One Concourse Parkway

Brasher Falls, NY 13613-7700 Suite 260 Suite 300

Alpharetta, GA 30022-2429 Atlanta, GA 30328-5346

Re: Doug Hoffman For Congress, Inc.

SecurePay.com, Inc. - Northern Merchants Services, Inc.

Merchant No.: 8016003934

Dear Gentlemen:

I have been retained by the Doug Hoffman For Congress campaign (hereinafter the

Campaign) with regard to the above-referenced matter. In or about October, 2009 my clients

campaign engaged the services of SecurePay.com, Inc. for the express purpose of utilizing its services

to collect and process internet campaign donations made by those individuals who desired to

contribute to his campaign for Congress. Moreover, and as I am sure you are fully aware, all

candidates for Congress must comply with exceptionally strict and rigid reporting guidelines set forth

in the U.S. Code and enforced by the Federal Election Commission. Violations of these statutes and

rules may result in both criminal and civil penalties. It is as a result of the confluence of these two

points/issues that has caused me to write this letter, seeking to put you on notice that your companies

have: failed to provide that which your companies promised; as a result of your companiesovercharging the accounts of the contributors to the Campaign your companies have overcharged the

Campaign; have failed to provide the necessary and, in many instances, the correct information upon

which my client may make accurate disclosures to the Federal Election Commission, as required by

the appropriate statutes; and have completely ignored the pleas of the treasurer and staff of the

Campaign to provide the batch information such that it can verify and correct yourcompanies

errors.


2/5

Mr. Kevin J. Weller

Mr. MacAllister Smith

Mr. Stuart C. Harvey, Jr.

November 27, 2009

Page - 2 -

Let me provide you with a brief history of what has transpired so that you may have the context

in which to understand my clients frustration, concern and anger with your companies: failure to

accurately account for the campaign contribution transactions; overcharging of campaign contributors

(whom have threatened to report this issue to both the press and the police solely as a result ofyour

companies failure to accurately charge or debit their accounts for their actual contributions);

overcharging the campaign for phantom contributions that were actually errors made by your

companies; intentionally misleading the Campaign in October and early November when it advised

that all contributions had been accounted for and were deposited in the Campaigns bank account and

then, in November, your staff came in and pushed through an additional $175,000.00 in contributions

that had been made in October but had not been credited to the Campaigns bank account within the

two or three days as your companies promised; and, the most recent incredible indiscretion, you have

failed to return the calls of the Campaign who are seeking assistance to resolve the above-referenced

issues (mostly resulting from your inaccurate batch reports) so that it can comply with the U.S. Code

statutes and regulations regarding campaign contribution disclosures and the requirements of the

Federal Election Commission. As a result ofyourcompanies errors, the Campaign still has not fully

rectifiedyourcompanies mistakes and has incurred thousands of dollars in extra costs in order to

review and correct your companies errors.

Hereafter is a brief summary of the issues:

!

On or about October 20 , 2009 the Campaign observed that the morning Batch

th

Settlements reports provided to it by Secure Pay were considerably lower than the

transaction dollar amounts actually posted online for the previous day by Secure Pay.

It appears from the record that Secure Pay utilized Northern Merchants Services, Inc.

(I am aware that both companies are wholly-owned subsidiaries of Pipeline Data, Inc.)

to conduct their business and that Northern Merchant Services, Inc. utilized Elavon to

batch these transactions;

! On October 21 , 2009 the Campaign notified Secure Pay (I believe the campaign hasst

dealt exclusively with a Ms. Jolene LaSiege, who advised the campaign that she is the

Senior Manager-Technical Support) of the large difference in the two reports.

Campaign was advised by Ms. Jolene LaSiege and Ms. Kerry Planty, TechnicalSupport Specialist, that all the contributions were being reported and that the

discrepancy resulted merely from a timing issue and breaking the batches into

batches of 950 for processing ease. As a result of the strict and rigid campaign

contribution finance laws, the Campaign requested a copy of the batch reports in order

to ensure that the records provided by your companies were indeed accurate and to

ensure that it would accurately report the campaign contributions on its Federal

Election reports;


3/5

Mr. Kevin J. Weller



November 27, 2009

Page - 3 -

! On October 22 , 2009, Campaign again notifies Secure Pay that the batch reportsnd

differ from the online reports. Secure Pay again advises that it was merely from a

timing issue and breaking the batches into batches of 950 for processing ease;

! On October 23 , 2009, Campaign forwards to Ms. Jolene LaSiege a spreadsheetrd

demonstrating the dollar differences between the website contributions and the amount

Secure Pay is processing for Campaign;

! On October 23 , 2009, Ms. Jolene LaSiege response to the Campaign is that there arerd

so many transactions that the batch is settling twice per day and that is where the

discrepancy arises, without providing the Campaign with any actual support for her

assertions;

! Between October 24 , 2009 thru November 2 , 2009, Campaign spent massiveth nd

amount of time responding to irate campaign contributors who have advised that:

Secure Pay has doubled and tripled billed their credit card accounts and their debit card

accounts; and have made hundreds of mistakes in the amount charged to the campaign

contributors credit card accounts and their debit card accounts. For example, a

campaign contribution of $100.00 was incorrectly credited/debited for $1,000.00. The

Campaign had to email and/or phone each of these contributors to prevent them from

going to the police and the press;

! On November 3 , 2009, the day of the election, Ms. Jolene LaSiege contacts therd

campaign and requests that the Campaign stay off the system for afew hours. Ms.

LaSiege advised that Secure Pay needed to take over the system to FORCE through

some transactions because it appears that the Campaign was correct and Secure Pay

had dropped some campaign contribution transactions. She explained that Secure Pay

would have to manually input these dropped transactions. They also alleged that they

would be inputting credits for those campaign contributors who were double or triple

charged/debited;

!Thefew hours requested by Ms. Jolene LaSiege turned into more than five (5) days(Sunday, November 8 , 2009) and $175,000.00 in transactions, which again manyth

were incorrect. In many or most of the situations where Secure Pay was supposed to

credit the campaign contributor for Secure Pays mistake of double or triple

charge/debit, Secure Pay actually charged their accounts again, causing another flurry

of calls to the Campaign;


4/5

Mr. Kevin J. Weller



November 27, 2009

Page - 4 -

! On November 9 , 2009 Campaign calls Secure Pay and requests to speak with Ms.th

Kerry Planty and is advised she is out of office. Campaign leaves a message and never

receives a return call. Campaign calls Secure Pay and requests to speak with Ms.

Jolene LaSiege. Campaign is advised that she is unavailable. Ms. Jolene LaSiege

never returns telephone call. Operator advises that the owner of the company, Kevin

Weller, is out of the office but would return call when he returned. Campaign advises

that she has a campaign contributor on the telephone from California and that Secure

Pay had again mistakenly debited his bank account for$10,000.00 (Campaign had

reversed the earlier error made by Secure Pay) and that he (the campaign contributor

from California) was going to go to the U.S. Attorney and report the fraud unless the

mistake was immediately rectified. Campaign advised the Secure Pay operator that she

would hold for Mr. Weller. Several minutes later Mr. Weller spoke with the

Campaign and advises that he was not aware of the problem and that he would make

the situation right and would in fact personally contact each contributor who was

adversely affected and advise it was Secure Pays mistake. Well, the situation has not

been rectified and he did not personally contact any of the campaign contributors;

! On November 13 , 2009, Ms. Jolene LaSiege emails the Campaign and advises thatth

Secure Pay has identified the problem with the transactions. Again, Campaign

reiterates that the Campaign needs to file an accurate report with the FEC by December

3 , 2009, so time is of the essence. The Campaign cannot receive an extension inrd

which to file the campaign contribution beyond December 3 , 2009;

rd


Secure Pay has completed the transactions and requests what information the

Campaign needs to complete its reports. Campaign advises and provides Ms. Jolene

LaSiege with the exact information that it required for the FEC reports. For example,

the Campaign required the campaign contributors last name, first name, employer, and

occupation. Apparently this is where Pipeline Data, Inc. gets involved. Pipeline Data

advises that it cannot print such a report. However, the website where the

contributions were made required such information to be provided in order to make the

online contribution and such information was on the report information possessed by

Secure Pay. Pipeline Datas next excuse was that it couldnt prepare the reportsbecause of the drops made by Secure Pay and the manual inputs made by Secure Pay

and then turned everything back to Secure Pay;


Secure Pay will prepare the reports but that she will only accept issues, questions and

the like by email. Secure Pay provides a report that is fraught with errors and

incompleteness. Campaign emails Ms. Jolene LaSiege regarding the errors and


5/5

Mr. Kevin J. Weller



November 27, 2009

Page - 5 -

incompleteness of the reports provided by Secure Pay. Campaign doesnt receive any

satisfaction, corrected reports, return emails or the like. Campaign calls Secure Pay

and does not receive any return calls. It appears that Secure Pay will no longer provide

any support for its services.

Each of your companies profess to deliver reliable and secure payment solutions to help

businesses succeed in an increasingly complex global marketplace, or something to that affect. The

Campaign has not experienced this type service, actually quite the opposite. Moreover, the Campaign

has incurred enormous expenses correcting the errors as a result of your companies failures, mistakes

and/or general incompetence.

Notwithstanding the above issues, it also appears that the Campaign has incurred fraudulent

charges as a result of your companies errors. In addition, your companies failures, mistakes and/or

general incompetence causes the Campaign issues with accurately and timely filing their FEC reports.

The fines that can be issued by the FEC can exceedhundreds of thousands of dollars. This of course

does not include any loss of reputation damages that would result if any of these campaign

contributors went to the press with your mistakes, blaming them on the Campaign, or any criminal

investigations that may occur as a result of your companies mistakes or fraudulent practices.

Since Secure Pay has decided not to return the Campaigns cry for help with the issues Secure

Pay has created, I have been asked to intervene. My question to each of you is How are you goingto address these issues/problems and correct them so that accurate information can be provided to the

Campaign and it can provide same to the FEC? Without a prompt response which addresses and

corrects these problems, I have been directed by the Campaign to take whatever steps necessary to

protect its interest and reputation.

I await your response.

Very truly yours,

LAW OFFICE OF DANIEL A. EHRING

Daniel A. Ehring

cc: Doug Hoffman For Congress campaign

DAE/jsC:\LAW\CORP\HOF647.000\SecurePay.NMSI.PipelineData.Elavon.IssuesWithAccount.LTR.112709.wpd

hoffman letter to securepay

Documents