Barton H. Watson

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Barton Harry Watson (October 18, 1960 - November 24, 2004) was the son of Geraldine Watson (née Johnson) and Gerald Watson. Bart, as he was known as a schoolboy, grew up in Belding, Michigan, U.S.A. Barton attended Washington Elementary and Belding High School, graduating as Valedictorian in 1978. He enrolled at the University of Michigan in Ann Arbor in the fall of 1978, but completed only one semester of coursework. While in Ann Arbor Barton also volunteered at an ambulance company. After dropping out, he returned to Belding to help his mother run a small automobile service station, where he drove a tow truck.

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[edit] Washington D.C.

Following the divorce of his parents and as a result of financial pressures, Barton and his mother Geraldine moved to the Washington, D.C. area in 1981, residing a short time in an apartment in Alexandria, Virginia, and later moving to another apartment near Grover-Archibald Park in D.C. Through the use of a fraudulent resume, Barton obtained employment as a junior account executive at the I Street Branch of E.F. Hutton. Barton's boss and mentor was Perry Bacon, who figured prominently in the E.F. Hutton check-kiting scandal of the early 1980s.

While working at E.F. Hutton, Barton misappropriated client funds in excess of $300,000. Once the embezzlement was discovered, Barton was fired from E.F. Hutton in January, 1985, and was banned for life from dealing in securities by the National Association of Securities Dealers. In May, 1987 Barton was sentenced by Justice Gerhard A. Gesell to one to three years in federal prison for mail fraud.

[edit] CyberNET Engineering

Following his release from prison after more than two years, Barton returned to Belding and lived with his father for six months. Afterward, he moved to Grand Rapids, Michigan where he worked as a waiter at Red Lobster restaurant and as a sales clerk at a large computer store. By 1990 he had met John Straayer and together they founded a company called WS Services a "value added reseller" of computer systems.

After meeting his soon-to-be wife in 1991, Krista Kotlarz, his relationship with John Straayer began to deteriorate, culminating in a lawsuit by Straayer over embezzled assets of the partnership. Following the dissolution of the partnership, Barton continued the business under the name CyberNET Engineering.

Between 1991 and 2000, CyberNET was a moderately successful reseller of Compaq computers, as well as providing design and installation for clients. Starting in 2000, however, Barton began to obtain fraudulent loans from a large number of financial institutions based on faked and forged financial statements. By 2002 Barton and his wife Krista were living a fabulous lifestyle, owning a million dollar home in Ada, Michigan and driving Ferraris, BMWs, Bentleys and several Rolls Royces. The lifestyle and an ultimately unsuccessful attempt to expand the business internationally was financed by an ever increasing number of fraudulent loans in what turned into a classic Ponzi scheme where new loans were used to finance the debt already incurred plus a lavish personal lifestyle.

[edit] Raid, suicide and trials

In November, 2004 the FBI raided the CyberNET headquarters on South Division Avenue in Grand Rapids, Michigan and seized the business and all of the Watson's personal assets. In the early morning of November 24, 2004 Barton Watson committed suicide while barricaded in his luxury home during a stand-off with police. CyberNET and the Watsons were determined to have over $100,000,000 in debt with only approximately $2,000,000 in assets.

On paper, The CyberNet Group appeared to be every bit as rich as the rare, vintage bottles in its basement. The company's promotional and marketing materials claim sales from between $200 million to $300 million, while proudly displaying its VARBusiness 500 membership. CyberNet claimed $321.2 million in revenue for 2003. Ex-employees tell a different story, however. The CyberNET Group's actual annual revenues were more in the $10 to $20 million range.

On June 22, 2006 the President of CyberNET, James Horton, pleaded guilty in U.S. District Court in Grand Rapids to four counts of felony mail fraud, and was sentenced to 7.5 years in prison. Paul Wright pleaded guilty on August 31, 2007 to federal charges of conspiracy to defraud banks and finance companies, money laundering, and mail fraud, and was sentenced to 2.5 years in prison.[1] Krista Watson pleaded guilty on September 4, 2007 to federal charges of conspiracy and tax evasion, and was sentenced to seven years in prison.[2]

[edit] Links

[edit] References

  1. ^ The United States Attorney's Office - Western District of Michigan
  2. ^ The United States Attorney's Office - Western District of Michigan