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CyberNet Group Timeline: A Progression of Lies, Greed And Corruption
1985: A lawsuit is filed in San Francisco against Barton Watson and his mother, Geraldine Watson, by investors who claim the mother and son duo defrauded them with illegal investments. A year later, the court rules for the plaintiff and awards the investors nearly $1 million in total damages.
1987: Barton Watson pleads guilty to one count of mail fraud in 1987 for scamming an investor while working at brokerage firm E.F. Hutton in Washington, D.C. He is sentenced to three years in prison and forced to pay $230,000 in restitution.
1989: Watson is released from prison in July on parole. He later joins John Straayer to form WS Services, a predecessor to CyberNet Engineering.
1992: Cyberco Holdings is incorporated in the state of Michigan. Straayer later leaves the company after suspecting criminal activity.
Barton Watson and wife Krista are investigated by the FBI on allegations of bank fraud for allegedly falsifying an income statement and tax return. Watson is forced to pay a civil judgment fine of $5,000.
1996: Hastings Public School system in Michigan contacts CyberNet Engineering and orders more than $230,000 worth of new computers, but after delivery and installation, the products are discovered to be remanufactured Compaq desktops.
2000: The FBI investigates the Hastings Public School case, which later results in an out-of-court settlement.
2002: CyberNet's accountant, Guy Hiestand of Hiestand and Co. in Grand Rapids, discontinues his work for the company after discovering discrepancies in CyberNet's financials.
2003: In January, First American Equipment Financing (FAEF) contacts the FBI with a complaint of fraud against CyberNet after the company tries to secure a loan from FAEF.
2003: CyberNet wins a lawsuit filed against the company by Con-Way, one of its biggest clients, after a lengthy contract dispute. CyberNet is awarded more than $600,000 by an Oregon Circuit Court.
2004: In January, Hiestand discovers that CyberNet is providing banks with phony financial documents and accounting statements with Hiestand's name and letterhead attached to them.
2004: On Nov. 17, federal agents raid CyberNet's headquarters and shut the office building down while confiscating financial documents, computers and digital records for the company.
2004: The day after the raid, the first lawsuit is filed against CyberNet by a creditor, Charter One Vendor Finance, claiming damages related to CyberNet's fraudulently obtained loan for $3 million. Several more lawsuits follow.
2004: On Nov. 18 and 19, several wire transfers are made, moving funds for as much as $750,000 from the accounts of CyberNet and its shell companies to Barton Watson's mother Geraldine and brother Karl, company president James Horton, and other executives.
2004: An order is issued in Kent County Circuit Court on Nov. 22, appointing receivership to Management Services Realty Inc. CyberNet officially ceases operations later in the week.
The FBI also begins to track CyberNet's wire transfers and freezes the company's various accounts.
2004: On Nov. 23, Barton Watson, armed and suicidal, calls 911 from his home. The next morning, police find Watson dead of a self-inflicted gunshot wound.
2005: On March 23, CyberNet's assets are auctioned off, including Watson's wine collection. The auction brings in about $1.1 million, which is split up among creditors and banks.
2005: On April 22, Krista Watson appears in bankruptcy court in Grand Rapids and disavows all knowledge of her husband's criminal activity.
2005: On June 28 and 29, the Watsons' home and personal effects are auctioned off by the court.
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