Asia Economic Institute et al v. Xcentric Ventures LLC et al

Filing 42

DECLARATION of Edward Magedson In Support Of MOTION for Summary Judgment as to Entire Case 40 filed by Defendants Edward Magedson, Xcentric Ventures LLC. (Gingras, David)

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1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 David S. Gingras, CSB #218793 Gingras Law Office, PLLC 4072 E Mountain Vista Dr. Phoenix, AZ 85048 Tel.: (480) 639-4996 Fax: (480) 668-3623 David.Gingras@webmail.azbar.org Maria Crimi Speth, (Admitted Pro Hac Vice) Jaburg & Wilk, P.C. 3200 N. Central Ave., Suite 2000 Phoenix, AZ 85012 Tel: (602) 248-1000 Fax: (602) 248-0522 mcs@jaburgwilk.com Paul S. Berra, CSB #186675 Law Offices of Paul S. Berra 1404 3rd Street Promenade, Suite 205 Santa Monica, CA 90401 Tel: (310) 394-9700 Fax: (310) 394-9755 Paul@Berra.org Attorneys for Defendants Xcentric Ventures, LLC and Edward Magedson UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ASIA ECONOMIC INSTITUTE, LLC, et al., Plaintiffs, vs. XCENTRIC VENTURES, LLC, et al., Defendants. Case No: 2:10-cv-01360-SVW-PJW AFFIDAVIT OF ED MAGEDSON IN SUPPORT OF DEFENDANTS' MOTION FOR SUMMARY JUDGMENT Hearing Date: June 28, 2010 Time: 1:30 PM Courtroom: 6 (Hon. Stephen Wilson) AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 I, Edward Magedson, declare as follows: 1. My name is Ed Magedson. I am a resident of the State of Arizona, am over the age of 18 years, and if called to testify in court or other proceeding I could and would give the following testimony which is based upon my own personal knowledge unless otherwise stated. 2. I am the manager of Xcentric Ventures, LLC ("Xcentric") and the founder and "ED"itor of the website www.RipoffReport.com which I started in 1998. The Ripoff Report site is operated by Xcentric. Serving as a forum for speech concerning bad business practices among other things, the Ripoff Report is the leading complaint reporting website and is one of the most ardent supporters of free speech anywhere. 3. In my capacity as the Editor of the Ripoff Report I have worked closely with all levels of federal, state, and local law enforcement, including, but not limited to, various state attorneys general, county attorneys, Homeland Security, the United States Justice Department, United States Secret Service, FBI, FTC, SEC, US Postal inspectors, and local police, providing them with information used to locate victims, detect patterns of deceptive business practices and to prosecute violations of consumer protection laws, among other things. 4. The Ripoff Report is 100% free to use--it charges nothing whatsoever to 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 users who create reports, nothing to viewers who read reports, and nothing to anyone wishing to respond to reports. SUMMARY OF THE CORPORATE ADVOCACY PROGRAM 5. I have personally reviewed the Complaint filed against me in this matter by Plaintiffs Asia Economic Institute, Raymond Mobrez and Iliana Llaneras. Based on this review, I understand that a large portion of this action is founded upon Plaintiffs' misunderstanding of the Ripoff Report's Corporate Advocacy Program or "CAP". Because an accurate understanding of the CAP program is essential to understanding why Plaintiffs' allegations of "extortion" are groundless, I will briefly explain the program before addressing the specific details of Plaintiffs' Complaint. 2 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 6. First of all, it is false to imply that the Ripoff Report is an "extortion" scheme in which reports are solicited for the purpose of victimizing and extracting money from those named in a report. If a company or individual is named in a report which appears on the Ripoff Report, they always have the option of creating and posting a response (called a "rebuttal") which explains their side of the story. Ripoff Report charges nothing whatsoever to anyone who wishes to post a rebuttal; they are 100% free. 7. When I am contacted by anyone who states that they have been targeted by a false or inaccurate report, my first suggestion to them is to file a free rebuttal. In my experience, the vast majority of complaints regarding unfair reports can be quickly and inexpensively resolved by posting a well-written rebuttal. 8. As I stated above, I always recommend that companies file a rebuttal as However, in some their primary recourse against any report they feel is inaccurate. instances, companies may feel that additional assistance is needed in order to help them improve customer satisfaction and resolve pending complaints. Corporate Advocacy Program comes in. 9. When a company becomes a member of the CAP program, several different First, the goal of the program is to ensure that complaints This is where the 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 elements are involved. submitted by unhappy customers are resolved and that the root problems which caused these complaints are fixed so that future complaints can be reduced or avoided. 10. To achieve these goals, a company who joins the CAP program must agree, in writing, to work with Ripoff Report and the unhappy customers who have filed reports in order to resolve their complaints. This must include offering full refunds if requested by the customer. 11. During this process, Ripoff Report acts as a liaison between the CAP member and its customers by contacting each author who has submitted a report to our site about the company. The email we send to each author explains that the company has joined our program and has made a commitment to resolve the customer's complaint quickly and fairly. 3 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 12. Regardless of the resolution of each specific complaint, when a company joins the CAP program I will post information explaining this fact as an introduction to each complaint about the company on the Ripoff Report site. The purpose of this is to allow readers to see that the CAP member has joined our program and that the company has made a firm commitment to increasing its customer satisfaction by working with Ripoff Report to resolve all past and any future complaints. 13. CAP membership never includes the removal of reports, nor is the text of existing reports changed in any way. The only alteration made is to add an introduction to each report explaining that the company has joined our program, and this change is made only after the company has consented in writing to permit Ripoff Report to make the change. Other than adding this new information, existing reports remain visible on the site in their exact original form. 14. I frequently explain to people that one of the benefits of joining the CAP 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 program is that they can "turn a negative into a positive". When I say this, it is not meant to imply that by joining the program, the text of existing complaints will be changed or that negative statements will be changed. Rather, what I mean when I say this is that people who visit the Ripoff Report understand that when a company joins the CAP program, that company has made a visible, tangible commitment to increasing customer satisfaction. As such, when someone reviews a report about a CAP member, in addition to seeing the original complaint, they will also see that the company has joined our program and this will cause the reader (assuming they are a potential customer) to realize that the company can be trusted with their business. Because I strongly believe that customers prefer to do business with a company that has shown a willingness to admit their mistakes and to fix them, I feel that even negative complaints will produce a positive effect for our CAP members in the long run. 15. Because the purpose of the CAP program is to help increase customer satisfaction, I generally require companies to accept some level of responsibility for customer complaints even if they do not agree with them. I do this because I do not want 4 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 a company to participate in the program half-heartedly without having made a sincere commitment to improving customer relations. If a company thinks they can simply join the CAP program and expect to receive no additional complaints in the future without making any changes to their practices, I would not be interested in having this company as a member in our program. 16. I do not perform any kind of active marketing for the CAP program other than providing general information about the program on the Ripoff Report website here: http://www.ripoffreport.com/CorporateAdvocacy.aspx. I also include a few comments about this program as well as a link to the above page in a standard form email that I send in response to anyone who contacts the site asking about how to resolve a report. 17. In my standard email (a copy of which is attached as an exhibit to the Plaintiffs' Complaint), I also encourage the recipient to file a free rebuttal as their first course of action. Specifically, my email states: "You can simply file a rebuttal and explain your side of the story ... it's free ... and you don't have to even read any further, just log on and file a rebuttal telling your side of the story, best not to be combative or insulting." This point is repeated several times throughout the email. 18. Nothing in my email demands money to change or remove reports. In fact, 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 my email clearly explains that we will NEVER remove reports in exchange for money: [A]s a matter of policy, we do not remove a submitted Rip-off Report, and we never will. Some people claim that we remove reports for money, but that is just plain false. We have been offered as much as $50,000 to remove just one Rip-off Report, but we declined because doing so is in violation of our policy, and more importantly, goes against what we what we stand for ... Please understand our position. SUMMARY OF CONTACT WITH PLAINTIFFS 19. I understand from reviewing the Complaint and the declarations filed by Plaintiffs in this matter that Plaintiffs have accused me of attempting to "extort" money from them during a series of telephone calls that took place in late April and early May 2009. This allegation is completely and totally false. In fact, each and every one of my telephone conversations with Mr. Mobrez was automatically recorded by Xcentric's 5 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 phone system and these recordings prove conclusively that Mr. Mobrez and Ms. Llaneras have perjured themselves in this case. 20. I understand that Mr. Mobrez alleges that on February 15, 2009, he sent an email to info@ripoffreport.com which asked us to remove a report about him from our site. Although I do have access to the email address info@ripoffreport.com, it is not my primary email address; my primary email is Editor@ripoffreport.com. I have no specific recollection of receiving the February 15, 2009 email from Mr. Mobrez, and I am fairly certain that I never responded to it. It is also possible that due to problems with Xcentric's email server, this email may never have arrived. 21. I understand that Mr. Mobrez alleges that on April 28, 2009, he sent me an email which began "Dear Editor, I spoke with someone at your office yesterday ... ." Although I have seen this email during the course of this lawsuit, I do not specifically recall receiving it at the time, and I am fairly certain that I never responded to it. 22. On May 5, 2009, Mr. Mobrez re-sent me a copy of the email he previously 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sent on April 28, 2009 which also began "Dear Editor, I spoke with someone at your office yesterday ... ." I do recall receiving this email on May 5, 2009, and consistent with my normal practice, I briefly reviewed it and then I responded later that same day with a lengthy "form email" which I normally send to people who email me asking about their options for responding to a report. The "form email" I sent to Mr. Mobrez on May 5, 2009 does not demand money and does not contain any threats; it simply explains my views on various options for anyone wishing to address a report on our site. 23. I have reviewed the Declarations of Raymond Mobrez and Iliana Llaneras filed in this case on May 3, 2010. I am aware from reviewing these declarations that Mr. Mobrez claims that in a telephone conversation that took place on May 5, 2009, I asked him for a payment of $5,000 plus a monthly monitoring fee in order to help remedy negative postings about AEI on the Ripoff Report site. I am aware that Mr. Mobrez claims that during other calls, I told him that if he paid this fee, all of the negative would be changed into a positive. I am also aware that Mr. Mobrez claims that I bragged about 6 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Ripoff Report being at the top of all of the search engines, that any lawsuit against us would be fruitless, and that it was therefore best for him to just "go with the [CAP] program." I understand that Ms. Llaneras claims to have been listening in to several of these calls without my knowledge, and I am aware that she testified in her declaration that Mr. Mobrez had accurately recounted each of these conversations in his declaration. 24. I am aware that at the time their declarations were filed on May 3, 2010, Mr. Mobrez and Ms. Llaneras did not know that these calls had been recorded. I am also aware that the existence of these recordings was revealed to Mr. Mobrez and Ms. Llaneras for the first time during the deposition of Mr. Mobrez on May 7, 2010. 25. The six audio recordings that were played during the deposition of Mr. Mobrez on May 7, 2010 were true, complete, and unaltered copies of recordings which Xcentric automatically creates and routinely maintains as part of its business records. I did not alter, edit, or modify these recordings in any way. 26. After the denial of Defendants' anti-SLAPP motion on April 19, 2010, the 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 following day (on April 20, 2010) I began a search for any audio recordings that might exist of conversations between Mr. Mobrez and myself. Because of the significant amount of time involved, I did not conduct a search for these recordings prior to April 19, 2010 because I believed the anti-SLAPP motion was likely to succeed, and until it was denied, I did not know whether any phone conversations between me and Mr. Mobrez would be necessary or relevant to the case. 27. As of April 20, 2010, I did not know exactly when Mr. Mobrez alleged that he had spoken to me and I did not know what phone number(s) he was calling from. For that reason, in order to locate any and all possible calls from Mr. Mobrez, I had to review recordings of every call made to the Ripoff Report's main telephone number (602) 3594357 over a period spanning several months. This search took me about 45 hours. 28. Following my search, I was able to locate recordings of six phone calls All of these calls occurred in from Mr. Mobrez to the Ripoff Report's main number. April and May 2009. 7 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 29. Xcentric employs the services of a third-party vendor who automatically records all telephone calls to Ripoff Report's main phone number; (602) 359-4357. These recordings occur off-site, and I do not have access to any of the equipment used to record the calls nor do I have access to the recordings until they are sent to me via email. 30. When a call is recorded, the third-party vendor's system emails me an audio file which contains a copy of the call. This audio file includes certain data about the call in the file's header such as information from the caller ID, the number the caller is calling from, the date of the call and the time the recording ended. 31. According to my search, Xcentric's phone system recorded six phone calls These calls are summarized in the table from Mr. Mobrez in April and May 2009. below. It should be noted that the table actually reflects a total of seven calls were made even though only six calls were recorded. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 32. TABLE OF RECORDINGS Call # 1 2 3 4 5 6 7 Date 4/27/2009 4/27/2009 4/27/2009 5/5/2009 5/5/2009 5/9/2009 5/12/2009 End Time 3:25 PM N/A 3:32 PM 11:33 AM 1:10 PM 1:38 PM 3:05 PM Call From # (310) 806-3000 N/A (310) 806-3000 (310) 806-3000 (310) 806-3000 (310) 801-5161 (310) 806-3000 Length Min:Sec 1:35 N/A 1:20 0:51 0:35 1:36 14:45 The only call not recorded--Call #2 in this table--was a call made from Mr. Mobrez's office phone to the Ripoff Report on April 27, 2009. According to phone records produced by Mr. Mobrez which I have reviewed, I am aware that Call #2 was made at 3:27 PM on April 27, 2009, but the duration of the call as reflected on the phone bill was only 1.0 minute. It is my belief that no recording of this call was made because Mr. Mobrez never actually spoke to me during Call #2; this call was either dropped, did not connect successfully, or Mr. Mobrez hung up before reaching me. 8 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 33. In order to reach me directly, a caller is required to listen to two different series of options and then push two different keys to indicate that they would like to speak to the Ripoff Report's editor. Listening to only the main menu of options takes 40 seconds. If the caller chooses option 1, which relates to requests to remove reports, they get a recorded message regarding our policy, including the policy to not speak by telephone. It takes one minute and thirty seconds to listen to the main menu plus the recorded message in option 1. 34. If the caller follows the phone tree to reach me, the phone system then asks the caller to state their name which is recorded, and then they are placed on hold while the system forwards the call to me. The automatic recording process does not begin unless and until the caller is connected directly to me, and the audio recording only captures what was said after the call is connected to me. So, for instance, if a person spent 1 minutes navigating through the phone menu system and waiting for the system to connect the call and then spoke to me for a total of 30 seconds, Xcentric's system would only record the actual length of the conversation (30 seconds), but the caller's phone bill would likely indicate a total call duration of around 2.0 minutes. 35. Although a person could reach me in under a minute if they knew the exact 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sequence of buttons to push and did not wait to hear each menu listing, normally completing each step of the phone menu process takes anywhere from approximately one minute to nearly two minutes. It is my belief that the time it takes to complete this process is why Mr. Mobrez's phone bills show that each call was approximately 90 seconds longer than the audio recording that was captured for each call. 36. To be clear--I did not delete any audio from these recordings nor did I edit them in any way whatsoever. The recordings that have been supplied to Mr. Mobrez's attorneys are a complete and accurate reflection of the recordings made by Xcentric's system. 37. As clearly demonstrated in the recordings of the six other calls, none of Mr. Mobrez's extortion allegations are true. Of these six calls, two of them were voicemails 9 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 that Mr. Mobrez left for me and the other four are recordings of our actual conversations. Although I did have four brief telephone conversations with Mr. Mobrez in April and May 2009 (all of which were initiated by him; I never called him), I never asked Mr. Mobrez for money, I never asked Mr. Mobrez whether his company was profitable or how it made money, I never told him that payment of a fee to Xcentric would result in negative information being changed into a positive, and I never bragged about Ripoff Report being at the top of any search engines. All of these allegations are lies. Excluding general comments which are found on the Ripoff Report website here: http://www.ripoffreport.com/ConsumersSayThankYou/WantToSueRipoffReport.aspx, I never personally told Mr. Mobrez that Ripoff Report was immune under the law, I never told him that a lawsuit against us was likely to fail, I never bragged about having a team of lawyers who would fight him, and I never told him that it was "best to just join the [CAP] program." All of these allegations are blatant lies--they are pure fabrications that Mr. Mobrez created in order to falsely malign me and the Ripoff Report site and to gain unjustified sympathy for himself. 38. Rather, as the recordings of these phone calls clearly show, the topic of the 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Corporate Advocacy Program was first brought up by Mr. Mobrez, not by me. In fact, each time he called, Mr. Mobrez repeatedly tried to engage me in conversation about the Corporate Advocacy Program and each time he did so, I refused to discuss the program with him. Listening to these recordings now, I believe it is very clear that Mr. Mobrez was attempting to lead me into asking for money from him, but I firmly refused to do so. 39. As a matter of general policy and in order to preempt exactly the type of false and fabricated allegations present in this case, I do not discuss the Corporate Advocacy Program by telephone with anyone unless and until they have contacted us in writing to apply for the program. Because Mr. Mobrez never applied for the program, I did not speak to him about it even though he repeatedly asked me to do so. 40. In the case of AEI and Mr. Mobrez and as clearly demonstrated by the recordings of the phone conversations between us, I never discussed any aspect of the 10 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 program with Mr. Mobrez by telephone except for explaining that if Mr. Mobrez wanted to receive more information, he would need to review the page about the program contained on our website and then complete a short application form which is available here: http://www.ripoffreport.com/CorporateAdvocacy/Application.aspx. 41. As shown on the recordings, Mr. Mobrez initially indicated or implied that he would go to the site and complete this application, but he never did so. During my subsequent conversations with Mr. Mobrez in which he attempted to engage me in discussions about the Corporate Advocacy Program, I repeatedly told him that "there is nothing we can discuss by phone until I receive your information via email". This statement (which was made to Mr. Mobrez numerous times) was a reference to my policy against discussing the CAP program by phone, and the email I was referring to is the email generated by our system each time a person completes the CAP application form. 42. I am aware that in 13 of his May 3, 2010 declaration, Mr. Mobrez claims 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that a discussion took place between us at around 1:05 PM on May 5, 2009 in which he claims that I demanded a payment of at least "five grand" ($5,000) plus a monthly monitoring fee to enroll Mr. Mobrez in the Corporate Advocacy Program. I understand that Mr. Mobrez's wife, Iliana Llaneras, claims in her declaration that she was eavesdropping on this call and that she confirms Mr. Mobrez's version of what was said. 43. Both Mr. Mobrez and Ms. Llaneras are lying about the conversation that took place on May 5, 2009. This call was automatically recorded by Xcentric and the actual recording of the call (which has a total running time of 35 seconds) was played during the deposition of Mr. Mobrez. As clearly shown in the recording of this call, my actual conversation with Mr. Mobrez during this call lasted approximately 13 seconds. After Mr. Mobrez began speaking and I recognized his voice, I immediately hung up the phone. Mr. Mobrez continued speaking for a few seconds until he realized that the call had been disconnected. The remainder of the recording shows Mr. Mobrez repeatedly saying, "Hello? Hello? Hello?" As the recording clearly shows, I never demanded $5,000 (or any other amount) during this call, nor did I ever ask Mr. Mobrez for any 11 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 money at any time. In addition, I never made any of the other statements that Mr. Mobrez attributed to me during this call such as informing him that the more money a company made, the more I would charge that company for membership in the CAP program. These statements are simply inflammatory, malicious and offensive lies that Mr. Mobrez and Ms. Llaneras created in order to defame, discredit, and attack me. 44. I understand that according to the phone bills produced by Mr. Mobrez, his bill reflects that the total duration of the call on May 5, 2009 at 1:05 PM was 2.2 minutes which is obviously longer than the 35 seconds of audio recording that were actually captured. The reason for this difference (which is present in each of the six recordings) is that as explained above, anyone who calls the Ripoff Report main phone number must navigate through a series of menus before they are connected to me. This process takes an average of between one and two minutes which is why Mr. Mobrez's phone bills show that each call he made to the Ripoff Report was approximately 90 seconds longer than the amount of audio actually recorded. 45. The first call was made by Mr. Mobrez on April 27, 2009 at 3:21 PM and 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 his phone bill shows the total length of the call was 3.5 minutes. According to Xcentric's recording of this call which was transcribed on pages 271:7273:9 of Mr. Mobrez's deposition, the total amount of audio captured was 1:35 (one minute, thirty-five seconds), but it is obvious from the recording itself that the entire conversation was actually recorded. This implies that it took Mr. Mobrez about two minutes to navigate through the menu system during this first call. 46. The second call from Mr. Mobrez was on April 27, 2009 at 3:27 PM. His telephone bill shows the total length of this call was 1.0 minute. Xcentric's system did not record any audio from this call which I believe is due to the fact that the call was either dropped for some reason, or Mr. Mobrez hung up before he completed the phone menu process. Because Mr. Mobrez never spoke to me, no recording was made. 47. The third call from Mr. Mobrez took place on April 27, 2009 at 3:28 PM. His telephone bill shows that the total length of this call was 2.9 minutes. According to 12 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 8 of Mr. Mobrez's May 3, 2010 declaration, he claims that this third call involved a conversation between he and I in which I talked to him about the CAP program. That statement is false. According to Xcentric's recording of this case, which was transcribed on pages 276:3277:6 of Mr. Mobrez's deposition, the third call was actually a voicemail that Mr. Mobrez left on our phone system. The total duration of this voicemail was 1:20 (one minute, twenty seconds) which again is consistent with the amount of time that Mr. Mobrez would have spent navigating through Xcentric's phone menu system before he could leave a message for me. 48. The fourth call from Mr. Mobrez took place on May 5, 2009 at 11:28 AM. His telephone bill shows that the total length of this call was 2.6 minutes. According to 10 of Mr. Mobrez's May 3, 2010 declaration, he claims that during this fourth call, he asked me for information about the CAP program, including the cost. Mr. Mobrez also claimed that I told him during this call that the Ripoff Report had immunity under the law and therefore could not be sued, and that we have a team of lawyers who would fight any lawsuit and therefore it was best to "just go with the [CAP] program". All of these 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 allegations are completely false. The actual recording of Call #4, which was transcribed on pages 278:12279:10 of Mr. Mobrez's deposition, demonstrates that Mr. Mobrez attempted to engage me in a discussion about how he could resolve a report on our site, and I expressly told him that I could not speak to him about this by phone (as I had previously told him during our first discussion). After explaining that I would not speak to him by phone, I hung up and the recording ended. The total duration of the recording was 51 seconds. 49. The fifth call from Mr. Mobrez took place on May 5, 2009 at 1:05 PM. His telephone bill shows the length of this call was 2.2 minutes. This call is described in 13 of Mr. Mobrez's May 3, 2010 declaration, and this is the call during which Mr. Mobrez claims that I demanded $5,000 from him, plus an additional payment of several hundred dollars each month. These allegations are completely false. According to Xcentric's recording of this call, which was transcribed on pages 280:4281:7 of Mr. 13 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Mobrez's deposition, the entire conversation during Call #5 lasted a total of 35 seconds. The call began with me asking the caller who he was, after which Mr. Mobrez responded: "I spoke to you earlier. Thank you for sending me that e-mail. I tried to understand it, but there's nothing says what I can do there. Hello? Hello? Hello?" This represents the entire conversation that occurred during Call #5. 50. As reflected in this recording, once again I hung up the phone on Mr. Mobrez once I realized that it was the same person who had called me several times before and who I had previously told I would not speak to by phone. As reflected in the recording, I never asked Mr. Mobrez for money, never told him that our fees were based on the size of his company, and never told him that the more money he made the more he would be charged. All of these allegations are completely false as the tape recording of this call clearly shows. 51. The sixth call from Mr. Mobrez took place on May 9, 2009 at 1:36 PM. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This call was another voicemail that Mr. Mobrez left from his cell phone (310-801-5161). Mr. Mobrez did not produce a copy of his cell phone records despite being asked to do so, so I do not know what the length of this call was according to his bill. According to Xcentric's recording of this call, which was transcribed on pages 282:10283:20 of Mr. Mobrez's deposition, Mr. Mobrez accurately describes his previous conversations with me as being very short and ending with me hanging up on him; "I spoken about three times with the same gentleman, but it seemed to me he does not want to stay on the phone or something. He just hangs up very quickly." 52. The seventh and final call from Mr. Mobrez took place on May 12, 2009 at 2:46 PM. This call is described in 14 of Mr. Mobrez's May 3, 2010 declaration in which he states that I told him during the call that if he joined the CAP program and paid the fees, then "all the negative goes away and you see the positive." As reflected in the transcript of the call, this allegation is completely false; I never told Mr. Mobrez during this call that membership in the CAP program would make all the negative go away. 14 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Rather, as with every other call, I specifically told Mr. Mobrez during this call that I would not and could not speak to him about CAP unless he applied for the program. 53. As clearly shown in the recording of this call, even after I told him that I would not speak to him about the CAP program, Mr. Mobrez also continued trying to "bait" me into asking him for money, which again I refused to do. In fact, at one point during the call, Mr. Mobrez apparently became frustrated that I had not asked him for money and he said to me, "Look, if you want to fix this, we can take care of it right away..." suggesting that if I would just request money from him, he was willing to pay immediately. As was true of every other instance that Mr. Mobrez tried to make me ask him for money, I refused to do so. 54. Instead, I responded by telling Mr. Mobrez that I would search for his email to confirm that I had received his application form, but after several minutes of searching I was not able to locate any such emails from him. I then repeated my previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 statements to the effect that I would not and could not discuss the program with him until I could confirm receipt of his application. 55. After our call ended on May 12, 2009, I continued looking for the CAP application form which I thought Mr. Mobrez said he had sent. Eventually, I was able to determine that Mr. Mobrez had never sent me any such form, and I therefore sent him an email in which I expressed my frustration at having spent time looking for something that did not exist. 56. Mr. Mobrez never completed the CAP application, never joined the CAP program, and neither he nor Ms. Llaneras nor AEI have ever paid anything to me or to Xcentric. 57. When I told Mr. Mobrez that he "drove me crazy," in my email to following our discussion on May 12, 2009, I was not angry that he had not applied for the CAP program. Rather, this statement was simply a reference to the fact that I was frustrated that I had spent so much time looking for an email that Mr. Mobrez suggested he had already sent when, in truth, the email had not been sent. 15 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 58. Based on my review of the Complaint and the exhibits thereto, I am aware that there six reports which Plaintiffs allege contain various false statements about them. These reports (as is true of all new submissions to our site) are automatically assigned "report numbers" by our servers which are sequential numbers reflecting the order in which each report was received. 59. In this case, I understand that the six postings at issue are as follows: Report #417493, #423987, #457433, #502429, #564331, and #571232. I understand that screenshots of portions of the report as well as copies of the text of each of each report are attached to the Declaration of David Gingras submitted herewith as follows: Exhibit 1A/B 2A/B 3A/B 4A/B 5A/B 6A/B 60. Report # 417493 423987 457433 502429 564331 571232 Submission Date January 28, 2009 February 13, 2009 June 1, 2009 September 30, 2009 February 3, 2010 February 19, 2010 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 All of these reports and rebuttals were created by third parties, not by me or Xcentric. I had nothing to do with the creation of the six reports at issue in this case, nor did I have anything to do with the comments/rebuttals to each report. I did not create these reports or rebuttals, nor did I alter them in any way. I did not "solicit" anyone else to write these reports or rebuttals. 61. I am aware that on May 20, 2010, Mr. Mobrez filed a "corrected" affidavit I am also in this matter in which he attempted to recant much of his prior testimony. aware that in his "corrected" affidavit Mr. Mobrez testified, "In addition, there were a number of incoming calls to me from Ripoff Report." This statement is completely false and is just another lie by Mr. Mobrez. At no time did I ever call Mr. Mobrez, nor would 16 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 I have contacted him by phone for any reason. If I had wanted to contact him, I would have done so in writing via email. 62. I have been the victim of many false allegations in the past by people seeking to destroy the Ripoff Report. As a result, I am extremely cautious about who I contact by phone. Although I do accept incoming calls to the Ripoff Report, all of these calls are recorded in order to prevent people from lying about what was discussed. However, because my outgoing calls are not recorded, it is never my practice to contact anyone by phone regarding any aspect of the Ripoff Report site (including the Corporate Advocacy Program) unless I have an established relationship with the person I am calling. Because I had no relationship of any kind with Mr. Mobrez, I never contacted him by phone nor would I have done so. 63. Xcentric does not now, nor has it ever, employed, authorized, or contracted with anyone to sell or solicit the Corporate Advocacy Program. In addition, no employee of Xcentric is authorized to call anyone regarding the removal of reports or regarding the Corporate Advocacy Program. As the manager of Xcentric Ventures, I am the only person authorized by Xcentric to engage in discussions about the CAP program with potential members, and I am certain that I never had any discussions with Mr. Mobrez or Ms. Llaneras about the CAP program other than the few emails and phone calls described above. 64. At no time was I aware that AEI had valuable contracts and business 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 expectancies with its employees. As indicated above, I had never heard of Mr. Mobrez or AEI prior to his emails to me in early 2009, and at no time during any of my limited conversations with Mr. Mobrez did he mention anything about his employees, nor did he tell me that employees had quit because of anything posted on the Ripoff Report site. 65. I am not in, nor have I ever entered into any conspiracy with anyone to I do not know who posted the reports about Plaintiffs. Although harm Plaintiffs. Xcentric maintains logs which would have information about the author(s) of each report, I have not personally reviewed this information. I am certain, however, that other than 17 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 Mr. Mobrez, I have never spoken to anyone about Mr. Mobrez or about AEI until this lawsuit was filed in January 2010. Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. EXECUTED ON: May 24, 2010. ______________________________________ Edward Magedson 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW 1 2 3 4 5 6 7 8 9 10 11 12 13 GINGRAS LAW OFFICE, PLLC 4072 EAST MOUNTAIN VISTA DRIVE PHOENIX, ARIZONA 85048 CERTIFICATE OF SERVICE I hereby certify that on May 24, 2010 I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing, and for transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Mr. Daniel F. Blackert, Esq. Ms. Lisa J. Borodkin, Esq. Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Attorneys for Plaintiffs And a courtesy copy of the foregoing delivered to: Honorable Stephen V. Wilson U.S. District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 /s/David S. Gingras 19 AFFIDAVIT OF ED MAGEDSON CV10-01360 SVW

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