From Mom

Mom Found this article on the Web:

Rt. 66 ISP kicked with criminal complaint

New Mexico Business Weekly - by Emily Esterson, NMBW Editor

Date: Sunday, April 28, 2002, 10:00pm MDT

Internet companies come, and Internet companies go, sometimes in a blaze of unpaid debt, lawsuits and angry customers.
Such is the case of Rt. 66 Internet, the state's oldest Internet Service Provider (ISP). The company, which had a criminal complaint filed against it for fraud and embezzlement, hasn't paid its vendors in several months. Board members of a related company say Rt. 66 has failed to account for $600,000 worth of revenue.
Last week, Rt. 66 Internet (rt66.com) customers found themselves without Internet service. The problem stemmed from a variety of sources, including an unserviced network that had deteriorated, according an email sent to customers on April 14, and unpaid bills to its carrier, Qwest Communications. Rt. 66 said, in that same email, "We are also unable to access our servers because they are holding them hostage," referring to an unnamed subcontractor who had failed to service its network.
The company served about 2,400 dial-up customers and about 13 broadband customers. The average dialup customer paid about $22 a month.
The email message to customers came from Sherri Baker, listed as the company's CFO. Tom Kemp, a CPA in Las Cruces, is the company's CEO. Kemp is also the owner of an Internet company called ACCESS New Mexico LLC. "It started with the process of billing disputes, some of those vendors are trying to do us in," Kemp told NMBW.

Technology company cries fraud

Also on April 14, George Richmond, board member and investor in Triolina Technologies, a network service provider who managed Rt. 66's Internet Service, filed a criminal complaint against Rt. 66 with the Albuquerque Police Department's White Collar Crime division for fraud and embezzlement.
Richmond claims the ISP has been collecting monthly fees from customers averaging about $61,000 a month, but not paying its vendors. "[The owners] have been taking money out of the company," he says.
"We have a billing dispute and they are calling it criminal, and they are the ones that won't talk to me," says Kemp who also says he wasn't aware of the criminal complaint.
Triolina Technologies says it stopped supporting Rt. 66's network because the company hadn't paid its bill since December 2001.
Richmond and fellow board member Filiberto Pacheco also sent a letter on April 15 to the State Attorney General, requesting she investigate the matter. The letter claims that Rt. 66 has unpaid vendor debt of approximately $300,000, owed to Qwest Communications, WorldCom, Triolina and Time Warner Telecom. According to Richmond's calculations, about $600,000 of Rt. 66's revenue is unaccounted for.
In a signed affidavit, principals of Triolina Technologies say Kemp told them he could separate the assets of Rt.66 from the liabilities because he transferred the assets into ACCESS New Mexico LLC. The Albuquerque Police Department is investigating.

Service switch

On April 14, Rt. 66 updated its server address to http://www.totacc.com, which belongs to Total Internet Access (TIA) of Las Cruces. H. Vince Thomas, who spoke to NMBW as the principal of TIA, says the details are still being worked out, but he's hoping Total Internet Access will take over the management of Rt. 66's customer base. The switchover should take place sometime during the next week. "We're making an agreement to take care of their customers," Thomas says. He would not disclose financial details.
Kemp says TIA will take over about 2,000 customers from Rt. 66 Internet. Soccorro customers and clients that operate on frame relay won't be among them. He says it was just not profitible to keep those customers. For the others, Kemp says there is no fixed purchase price.
However, Howard V. Thomas filed Chapter 7 bankruptcy on April 8, for a different company, also based in Las Cruces, called Total Access. That company shares a post office box with Total Internet Access, although that company's principal is listed as a Jonathon Thomas according to state corporation filings.
Jonathon Thomas had been vice president of Total Access until December 2000. Vince Thomas refused to answer questions about Total Access, which he says is a separate company from Total Internet Access.
In Total Access's bankruptcy filings, Qwest Communications is listed as a creditor, with claims of $1 million. Qwest says it couldn't confirm that Total Access owes it that amount.
Total Access also owes Balboa Capital, a computer equipment leasing service in Irvine, Calif., about $13,000. Balboa has taken legal action against Total Access. Its corporate attorney, Christopher Parsons, says it will remove servers and other leased equipment from Total Access if it doesn't receive payment.

Qwest turns off the juice

Things began to unravel for Rt. 66 in mid-March, when its circuits started going down. When Triolina checked into the problem, it learned that the company hadn't paid its bill to Qwest Communications, allegedly since February 2001, says a Triolina executive. Qwest hosts the wiring on which Rt. 66 runs its service.
Qwest spokesperson Mark Genrich says there have been service interruptions to Rt. 66's circuits since last week, because of unpaid bills.
Kemp says Qwest did cut off service, but the telecom won't look at Rt 66's billing to resolve the issue. "It's like they've done with many ISPs. We had verbal agreements, which they wouldn't honor and they would not talk to us again. Our attorney even sent letters to which they never responded."
CFO Baker, who authored the email to customers, says the company's problems stemmed from a dispute with an unnamed contractor. "If you have a contract dispute, you're going to hold payment until you get the dispute settled," says Baker. "We were in negotiations to try to settle that dispute.
"Right now I just want to service the customers first," says Baker.

No answer at call center

The company runs a technical support call center in Albuquerque. The landlord, 202 Central, says it became concerned when customers started showing up at the office looking for help with technical problems. A notice on Rt. 66's Web site says the call center is being moved, but the landlord, who says the company still has at least a year on its lease, hasn't received notice.
The company was founded in 1993, and was sold to Galaxy Internet, a Canadian company, two years ago. Galaxy sold Rt. 66's customers in March 2001 to two investors, Frank Etscorn and Bob Asprey. At the same time, Rt. 66 swallowed up the customer bases of two other New Mexico ISPs, NMCG and NM Fiber, both of which were having financial difficulties, NMBW reported last year.
The investors took the combined customer bases of the three companies, but left the debt load with Galaxy. At the time, Kemp told NMBW that the deal cost over a million dollars and the original Rt. 66 Internet was $200,000 behind on several bills. Triolina was hired to manage the technical side of the business.