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Friday
Mar182011

Local Tech Darling Jawa & Jason Hope a Big Scam?

This post is a bit off topic, but I can't sit here watching the media's silence on this potentially incredibly large scam pulled by a local tech company, Jawa.

I first learned about Jawa at the Scottsdale "State of the City" address given by Mayor Jim Lane. In his speech, Jim highlighted two Scottsdale-based tech companies as an example of what is great about Scottsdale. He highlighted Axosoft and our work with AZ Disruptors and he also highlighted Jawa, a company that I had never heard of until that point.

During the speech, we learned that Jawa, a local tech company focused on mobile development, went from 50 employees to 250 in 2010. That's a 500% increase in employee count alone. Wow! I thought. How did I miss this incredibly awesome new tech company, which happens to be less than 1/2 mile from Axosoft's offices?

After the Mayor's address, I rushed up to Jason Hope, the founder and CEO of Jawa, to introduce myself and find out what Jawa does. Jason was very brief, seemed very uncomfortable to talk to me and he gave me a quick line that "we're in the mobile apps business" and rushed off. I thought to myself, "that was weird." 

So when I got back to my office, I went to Jawa.com to find out what Jawa does. Unfortunately, except for a couple of Facebook games that were supposedly in beta, I couldn't find much on their web site. I couldn't figure out how Jawa made money. There was lots of information about supposed charity work and philanthropy, but nothing about how to buy something from them. It didn't add up, but I figured I must be missing something and didn't think about it again.

Then, just last week, I saw this article in Network World about how Verizon is suing Jason Hope plus 5 of his associates and a network of more than 20 different LLCs that they have setup to run a fraudulent text message business. WHAT!?!?!

Verizon Wireless claims (from the lawsuit file):

Those are some amazing accusations. So how does Verizon say Jawa did it?

You see, to ensure that you don't get unwanted SPAM and false charges through text messages, the wireless industry has created "Consumer Best Practices Guidelines for Cross Carrier Mobile Content Services" and an organization called "Mobile Marketing Association" (affectionately known as the MMA). This is a good thing. It's the reason you don't get penis enlargement offers, Viagra offers or any letters from your cousins in Nigeria through text messages. To be compliant, an organization wanting to send text messages or charge cell phone users to send premium text messages, the organization must first apply for short codes. You know, those 5-digit numbers you always see on TV to vote for your favorite dance star.

Having friends that have gone through it, I hear the application process is actually very grueling and carriers like Verizon are extremely careful about who they let use their network to send text messages. To get approved, one must comply with a whole set of rules which prevent fraud. Verizon claims to bypass these rules, Jason Hope and his associates set up a network of different LLCs with addresses in different states to appear as completely independent entities. They would then apply for short codes by creating legitimate-looking web sites that seemed to be fully compliant with the MMA Best Practices. To be compliant, you would have to spell out the details of your terms, get double-opt in (with a confirmation text from the user) that they fully understand the charges they will receive.

Verizon claims that once a particular short code and the many associated marketing campaign were live and operational (there were over 120 of them known by Verizon) , they would then change their sites to be non-compliant to obtain cell phone numbers.

For example, if a person searched for the term "Great Quotes" on Bing.com, they might be presented with an ad claiming "Greatest Famous Quotes" like this (from the Verizon filing):

Clicking on the ad, the person would receive a web page that looked like this:

Notice how the entire site is "disabled" with the focus on the pop-up that asks for the user's cell phone number in order to access the quotes. What the user doesn't see here is that to get the "Greatest Famous Quotes" they will be charged $9.99 on their cell phone bill, every single month!

It gets even better. To make sure that they don't get caught, if anybody clicked on such ads from a known Verizon IP Address (such as Verizon's auditors who look for MMA Best Practice compliance), the same ad would redirect to somebody else's web site. In the example above, anybody hitting the ad from Verizon would be directed to:

Unbelievable stuff! Verizon claims they ran these campaigns for a ton of different commonly searched terms. "Food network recipe", "funniest jokes ever" and many others. Each resulting site would scam the user into thinking they are signing up for free text messages, not knowing they are really subscribing to a $9.99 monthly plan.

Because the scams are based on a monthly recurring charge, the charges can add up quick. If 1,000 people per day got scammed, that would add up to 30,000 people after 1 month, but the next month, another new set of 30,000 people might be added to the list. After a few years of this and it could add up to millions of dollars every month!

Who is Jason Hope?

Verizon's law suit claims that the mastermind behind the scams is Jason Hope, founder and CEO of Jawa. So who is this guy? A quick Google Search reveals a number of sites that talk about him, including:

Man, Jason Hope is one hella busy guy! With all his philanthropy work, giving, cures, science and space activities, how does he find time to run Jawa? That is some impressive amount of web sites talking about Jason Hope. What I love about these web sites is that they seem to all have similar content showing what an awesome, amazing guy Jason Hope is. Here is a sampling of the sites:

 

One thing is for sure. Jason Hope is one passionate dude!

He's not shy about spending money either. This article in the Arizona Foothills Magazine claims that Jason Hope is building a 100,000 sq ft house in Silverleaf, Scottsdale's most elite housing community, making his house the largest home in North America! Complete with indoor basketball court and a 3-story club.

For the Jawa Christmas party, this TMZ article claims that Jason Hope spent $500,000 to fill the place with stars. Remember, Jawa has only a couple of hundred employees. The article claims they spent $100,000 for Ludacris, another $17,500 on Snookie and others.

When I first met Jason Hope and heard about the success of Jawa, I couldn't wait to write an article about Jawa and Jason in the AZ Disruptors blog. I assumed that article would highlight the amazing path that he's taken to build a successful software startup. I assumed he would have tremendous insight and knowledge to share and help others get their companies started. Not for a second did I imagine that I would be writing an article that, if true, might be exposing Jason Hope and Jawa's elaborate scams. A part of me still hopes (no pun intended) that Verizon is wrong; that Jawa is legit; that Jason Hope is the good guy. But the cynical part of me has seen too many Enrons and Bernie Madoffs to think this is all just a misunderstanding.

What a shame! What a douchebag.

Back to work.

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Reader Comments (33)

Hamid... sincere thank you for posting this warning about the scum that live around us. It's unfortunate that people like this have to cast shadows on the positive work being accomplished. Jason Hope is not a reflection of the start up community in Arizona.

We must weed out these scam artists and continue plowing a healthy environment for legit start ups to thrive.

March 18, 2011 | Unregistered CommenterMichael Witham

Great post, a friend of mine was thinking about taking a job at Jawa. I'm defiantly going to research this further and send him the info. Thanks

March 19, 2011 | Unregistered CommenterBodie

Great write up. I know a few other notable valley companies that also are built on similar schemes.

March 19, 2011 | Unregistered CommenterSean Coleman

Tthis is the first time I have read an account that encompasses the big picture here with what surrouds Jason Hope. It's about time someone put everything together in a nutshell; great job Hamid. These websites are obviously created to deflect any negativity that might be posted about Mr. Hope. It's nearly impossible to find the local newspaper accounts and articles from 2003 that detail a more primitive scam of his involving an HOA take over in two different communities. Being self appointed President of these HOAs, he got free defensive council for the best defense the insurance money would buy. He ended up getting out of the fraud scheme and forgery charges. They re-tried the case with a new prosecutor in 2006 and by this time he found unlawful errors that were made during the investigative process so the case got thrown out all together. Verizon isn't wrong, but we have seen how money and the best defense team can buy your way out of anything. Verizon will probably settle out of court with JAWA and EyeLevel Holdings LLC. Interesting how Jason Hope pledged a donation to the Japan earthquake relief fund and said that everyone should do their part to help people. So ya see, money billed to Verizon customers helped donate to the earthquake relief efforts. It's not so bad when you look at it that way right?

March 19, 2011 | Unregistered CommenterBob

Thanks everyone!

Bob, it appears that this guy is a professional scam artist. I saw their press release about the "pledge" to donate to the Japan earthquake relief fund, but interestingly, no amount was provided. When you're a scam artist, you can say whatever you want. Who's going to check into whether or not he's actually donated a single cent? It's more than likely that the press release was intended for SEO purposes so when someone searches for his name or Jawa, a favorable article comes up - even though the article is written by them.

March 19, 2011 | Registered CommenterHamid Shojaee

Part of me (and sadly a big part) says he will get out of this mess unscratched, simply because he has money and connections, just like he did with his previous scams. This would be very unfortunate for our justice system. On the other hand, I am still optimistic that justice will prevail at the end.

March 19, 2011 | Unregistered CommenterAl

yea i had never heard of those guys when you mentioned them so that was definitely fishy. sucks to see this but nice sleuthing Hamid. There's big business in burying negative stories associated with peoples' names. FYI a quick "view source" on those sites reveal a common reference in the header -> head profile="http://gmpg.org/xfn/11". Global Multimedia Protocols Group appears to be one of those "reputation management" services. shady.

March 19, 2011 | Unregistered CommenterSean Tierney

Your first impression of this guy was right on. After he loses his business, he will love his lifestyle, then of course end up losing his freedom, ending up in jail where thieves belong. There are no shortcuts.

March 19, 2011 | Unregistered CommenterJEFF

Excellent article, as was the follow-up that you just posted today (crazy that you personally were a victim of this!).

Another thing to note about his "pledge" to donate to the Japan earthquake relief fund is that pledges are made all the time by individuals, companies, and even countries that never actually get made, or at least never get made to the full pledged amount. Many companies and other entities use this tactic all the time for the SEO perks that come along with it.

March 20, 2011 | Unregistered CommenterBMN

Thank you, Hamid, for being brave enough to put these together! Interesting also was that the news of this complaint was all over the net, but IGNORED by our local AZ news channels - they are probably in his pocket too. Also, try looking for these vanity sites through a proxy, wonder if you'll see them. He's a slippery fish, though - he's gotten out of lawsuits and jail time and always comes through unscathed. Sure he will this time too, no matter how many people he screws over to do it.

March 20, 2011 | Unregistered Commenterazsun

Keep digging...you haven't even scratched the Jason Hope surface yet. Investigate Cylon...this guy has been robbing people for years and has made millions doing so.

March 21, 2011 | Unregistered CommenterAnon

Don't forget JasonHopeParty.com

March 21, 2011 | Unregistered CommenterTimmy

http://www.landlineclassaction.com/snackablemedia

March 21, 2011 | Unregistered CommenterAnon

I admit that I'm fascinated with this story. And yeah, why haven't the local stations, papers picked up on this story? This is pretty big, if you ask me.

March 21, 2011 | Unregistered CommenterGuy Reynolds

Congratulations on the recognition from the city! Sorry it had to be with someone so very shady as this guy...

March 21, 2011 | Unregistered CommenterFred von Graf

It would be remiss NOT to mention Jason Hopes partner in crime Wayne DeStefano. Wayne DeStafano is up to his eyeballs in this scam and he along with Jason Hope and has been for years. It is a shame to me that they have duped their staff into expanding and perpetuating this scam - there are more defendants in this scam than there are shareholders in Eye Level Holdings, Jawa, Cylon and all of the other scam entities which they have set up.

March 22, 2011 | Unregistered CommenterScamville

It's not on TV because it's not visual, it's about Internet search (and who really understands how that all works anyway?) and it's yet another scam story - what's news about THAT here in the Valley?

I've had discussions with a few SEO practitioners here who've suggested setting up load of websites to deflect SEO in times of a company crisis. JAWA's team seems to have heeded that advice well.

March 22, 2011 | Unregistered CommenterDave

unfortunately, you are all wrong. Yes..I work here. He treats his employee's very well, and this is the best company I have worked for so far. The people here are very smart and progressive and that is intimidating to people other companies that do not make large amounts of money because of that. This is an outright attack on someone who can not even legally defend himself because of a pending lawsuit. I know we don't scam, and if the ship goes down I will proudly go down with it.

March 22, 2011 | Unregistered Commenterme

hey dude...if you notice the "terms" that are listed at the bottom of the page they are not hazed over, but in the MMA guidelines is suggests that a" reasonable person" would have to be able to read the $9.99 monthly subscription" written to your right next to the cell box. I guess you might not be considered that. ....Oh and don't forget the double opt-in portion...because once you enter a number the subscription process does not end there...you actually have to add another step to be "registered and billed". Get your facts straight.

March 22, 2011 | Unregistered Commenterme

Jason Hope is ***NO** Stranger to the judicial system!!

I was a recent VICTIM of his SCAM and like Hamid (god bless you) want to let the world know all about this guy!

Follow these links and read all about it... it makes for some INTERESTING reading!

Not sure if all these links will work from here... but you all can easily goto "dirtsearch.org" and enter in Jason Hope's name.... all sorts of cases from Arizona Criminal and Civil and Family Courts.

He has been a busy, busy man!

http://dirtsearch.org/cgi-bin/search.cgi?fname=jason&lname=hope&statename=Arizona

http://www.superiorcourt.maricopa.gov/docket/CriminalCourtCases/caseSearchResults.asp
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseSearchResults.asp?LastName=Hope&FirstName=Jason
http://www.superiorcourt.maricopa.gov/docket/JusticeCourtCases/caseSearchResults.asp?LastName=Hope&FirstName=Jason
http://www.superiorcourt.maricopa.gov/docket/FamilyCourtCases/caseSearchResults.asp?LastName=Hope&FirstName=Jason

Jason Randal Hope 13-2310 (F2) FRAUDULENT SCHEMES/ARTIFICES 5/1/2002 Dismd Pros Mot Dismissed By Prosecution Motion 7/29/2003

Looks like he also did not like paying Child Support a few years back (at least according to this)...
State Of Ariz Child Support Enforcement Plaintiff None Attorney General
Jason Randal Hope Defendant Male WARREN LEVENBAUM

He was even accused of FORGERY! Wow... It only gets better!
Party Name ARSCode Description Crime Date Disposition Code Disposition Date
Jason R Hope 13-2002 (F4) FORGERY 6/11/2002 Dismd Pros Mot Dismissed By Prosecution Motion 7/18/2008
Jason R Hope 13-2310 (F2) FRAUDULENT SCHEMES/ARTIFICES 10/18/2002 Dismd Pros Mot Dismissed By Prosecution Motion 7/18/2008
Jason R Hope 13-2002 (F4) FORGERY 9/24/2002 Dismd Pros Mot Dismissed By Prosecution Motion


He has even had SEARCH WARRANTS issued against his residence!
http://www.superiorcourt.maricopa.gov/docket/CriminalCourtCases/caseInfo.asp?caseNumber=CR2007-005391
State Of Arizona - (1)
Plaintiff N/A County Attorney, Maricopa
Jason R Hope - (2)
Defendant M Dichter, Stephen Whitten CR2007-005391-001
Filing Date Description Docket Date Filing Party
5/28/2009 SWR - Search Warrant Return - Party () 7/23/2009
5/25/2009 ISS - Search Warrant Issuance Order - Party () 6/26/2009
5/25/2009 SSW - Search Warrant - Party () 7/23/2009
5/25/2009 ASW - Affidavit For Special Warrant - Party () 7/23/2009

All this and the ULITMATE FU to the world... I WILL BUILD THE LARGEST HOUSE IN AMERICA!

March 22, 2011 | Unregistered CommenterScammed Verizon Cutomer
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