DISPUTE WITH myadvertisingpays.com (“MAP”)
VX Gateway Inc. in dissolution (hereinafter referred to as “VX Gateway” or “company”) is required by applicable law to gather and collect funds due to it and to defend and protect the company’s assets for the benefit of creditors. The dissolution proceedings were filed by the company on 23 September 2016, as a direct result of unusual transactional behavior by myadvertisingpays.com (“MAP”) which caused all of the processors to withhold payments to VX. The filing of the dissolution was voluntary and pre-dates all other known claims or actions. A lawsuit, which the trustees believe to be a false claim and totally without merit has been filed by MAP against the company in the US District Court in Houston, Texas. MAP was seeking a temporary restraining order against the company, which was denied by the US District Court, and a hearing is set in March for the purpose of determining whether the Court has jurisdiction over the matter.
VX Gateway’s legal position is that under its contract with MAP, jurisdiction and venue is Panama and both parties agreed to resolve any dispute in Panama using International Arbitration. Litigating a lawsuit in the United States would, in the opinion of the trustees and the attorneys here in Panama, likely unnecessarily dissipate a substantial amount of money otherwise due claimants in the dissolution. Those claimants include VX Gateway customers, vendors, landlords, utilities, as well as MAP if in fact it is owed any money at all, and others.
There are numerous blogs online that have been reporting misinformation about the litigation and the claim. While many of the postings are MAP members understandably concerned about monies they have not received, it seems likely that much of the misinformation may actually be professional and amateur publicists speaking for the benefit of MAP and its baseless lawsuit.
The purpose of this posting is to address some of the statements and do so in an objective manner if possible.
First, MAP and VX Gateway are two separate and unrelated companies. There is no common ownership. The lawsuit in Houston is specious; it has no basis in fact. The amount claimed as “missing” is made up and not supported by the books and records.
Second, a forensic audit will disclose what if any monies are owed, and by whom. VX Gateway welcomes such audit. All credit card transactions are preserved in the records of Visa and MasterCard; nothing can be hidden in an audit.
Third, many of the blogs describe MAP as a “Ponzi scheme”. VX Gateway investigated the business carefully before accepting its processing and MAP did not, as then doing business, appear to be a Ponzi. Moreover, VX Gateway required, received, and relied upon a formal Legal Opinion Letter from MAP’s attorney, Jonathan Herpy, of the law firm of Hart & David, LLP attesting to the legality of the MAP’s business.
The business concept of MAP appears to be an “advertising arbitrage”, a way of exposing an advertiser’s media to more viewers. Many see it as an extremely creative concept that apparently worked well for a while at least with regard to attracting a large following.
Following the publicity attendant to the lawsuit we have heard from several observers that whether or not the business scheme truly benefits the advertisers seems questionable because the additional exposure sought by advertisers are in reality “hollow clicks”, that is people looking at the ads because they are paid to do so, not because they have actual interest in the product or service. One would think that over time fewer and fewer advertisers would utilize such a service. We have quite recently been told that there is also the issue of whether the MAP members have a viable long term device for creating income after expenses or if the payout scheme of MAP is weighted in such a manner that the business must eventually fail. Those concerns, however, are matters between MAP and its members.
As a payment gateway VX Gateway provided a service of presenting credit card charges to one or more processors (different processors are often needed to handle transactions in different currencies or countries), after which each payment must be settled and when approved money credited/paid by the processor to the payment gateway. Those funds do not belong to the payment gateway except for its processing fees. After receipt of such funds from the processor the net amounts due are remitted or credited to the merchant, here MAP. The sheer volume of transactions requires software that virtually automates the entire payment process from start to finish. Every payee’s account is paid/credited automatically.
Critical to understanding the process, by contract and industry practice, the payment gateway, VX Gateway, has no debt and owes nothing to the merchant until it receives the payment from the processor, here GPN Data (hereinafter referred to as “GPN”). GPN has withheld payments due VX Gateway. As part of the dissolution process VX Gateway is, as stated above, pursuing an audit. When and if GPN eventually pays its lawful obligations such funds should be received in the dissolution. At such time, and only at such time, money payable to any party will be credited to the account of and become payable to any party due money from the respective transactions. In other words, at such time money owed to MAP, if any, will be paid.
We find it interesting that GPN, the party that owes the money but has thus far refused to pay, is now doing business directly with MAP which is claiming the money. If they can work together to take money from MAP’s members, cannot GPN pay VX Gateway the money VX Gateway is owed in order that we may pass through that part that will then be owed to MAP? From whatever amount it is then owed and paid MAP could then pay its members some or all of what it has withheld from them.
Make no mistake, any money that may become payable by VX Gateway to MAP, if any, is a part of the money GPN has withheld from paying to VX Gateway. We reiterate, by contract and industry practice no debt is incurred by VX Gateway until it is paid by the processor, here GPN Data.
It should be noted that Mike Deese signed a personal guarantee to make good any monies owed to VX Gateway when he applied for VX Gateway services.
VX Gateway’s position is that the actual amount in controversy in any legal proceeding in Panama can easily be determined by third party audit. Once done VX Gateway intends to be bound by the audit.
There would appear to be no good faith reason for MAP to oppose such a determination. At the instruction of Jonathan Herpy of Hart & David law firm, a total of USD 8 million, consisting of two (2) payments of USD 4 million each was paid to the law firm’s escrow account. Bearing in mind that VX Gateway itself will owe nothing until it is paid by GPN, one might ask first, as to money previously paid to MAP, where has the money gone?
Only Mike Deese and MAP’s attorney Jonathan Herpy and the Hart & David law firm can provide that answer. Second, as to such monies and monies as yet not received by VX Gateway from GPN, is there some collusion between MAP and GPN? We express no opinion on that issue.
Counsel in Panama has speculated that the lawsuit improperly filed in the US is likely a sham intended instead to draw attention away from MAP and its principals. If that is correct, one must wonder what are they trying to hide? Again, we express no opinion.
Legal counsel has advised that VX Gateway and others may pursue legal action against MAP and GPN and their respective spokesmen individually for slanderous and disparaging statements made by them claiming that monies have been stolen by VX Gateway or related parties. In fact, such actions may follow but the focus of VX Gateway is presently upon collecting monies as yet unpaid by GPN in order that it may be paid to the rightful recipients.
Many people apparently have claims against MAP; not all of those people have claims against VX Gateway. Those that may have a legitimate claim in the VX Gateway dissolution are encouraged to file a proper claim in the dissolution at the earliest possible time in strict accordance with procedure set forth on this website. Please note: Claims that are not submitted with the required Enhanced Know Your Customer documentation will be rejected and must be resubmitted.
VX Gateway in dissolution prepared this statement based on the information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. The financial information included in this presentation is preliminary, unaudited and subject to revision upon completion of the Company's closing and audit processes, as well as independent third party audits. This presentation is not a legal opinion, but general discussion, not intended to deal with or disclose particulars of any specific issue, legal, business, or otherwise. All applicable statutes and regulations control.