Open Employment Positions | Technical Blog Site Search Virtual News   Citrix Integrator CEO Busted by Feds, Commits Suicide By Steve Kaplan   It was not a surprise to learn that the Feds had finally caught up with Barton Watson, CEO of the CyberNET Group. An extensive FBI report shows that he utilized a Ponzi-like scheme in which he’d borrow increasingly larger amounts of money from banks and other lending institutions purportedly to purchase computer equipment. Instead, he’d use the proceeds from the newer loans to stay current with older loans while continuing to fund his lavish lifestyle. When the Feds finally stopped the music, he was found to owe somewhere north of $95 million against assets of only $4 million. While surrounded by police at his posh home in Grand Rapids, Michigan, Barton ended his life at the age of 44 with a shotgun blast to his head.   My first encounter with Barton (or “Mr. Watson” as his administrative assistant referred to him) was in the spring of 2000 when he came to northern California to talk about an acquisition of my company, RYNO Technology. Barton was recommended to me by a senior VP at Wyse, and he seemed to have impeccable credentials including an MBA from Stanford and a former partnership with Goldman Sachs. During the next six months, we had over a dozen meetings including multiple all day affairs at his opulent headquarters in Grand Rapids, Michigan.   Certainly, the first thing that most people would notice about Barton was his sheer size of around 6’ 2” and 400 pounds. This would be quickly followed, though, by an impression of extraordinary intelligence. Barton had an uncanny knowledge about almost any subject and spoke with authority whether discussing the intricacies of airplane leasing or the finer points of legal issues. A valedictorian of his high school in Belding, Michigan, Barton was said to be without question the smartest kid in the school district.   Jim Cameron, a professor of criminal justice from Maine who is writing a book about Barton’s life, says that he was all about image. Barton crafted a persona that began when he was eight years old playing a fantasy role of corporate CEO. He and his wife Krista traveled first class around the world, staying in the best hotels and eating at the finest restaurants. He drove a Ferrari, Bentley and Rolls Royce among other luxury autos. And while he undoubtedly enjoyed the finer things in life, his main agenda was probably to make the right sort of impression.   While I’ve never been overly impressed by the trappings of luxury, I was beguiled by Barton’s charm and intelligence. He and Krista would frequently fly to San Francisco where he’d meet my wife and me for wonderfully entertaining meals at expensive restaurants. And it was hard not to be somewhat awed by the $180M in sales he claimed to be doing. I met his top executives and spoke with his two largest Citrix clients, UPS and Conway, both of whom gave his organization glowing references.   As time went on and the talk about CyberNET’s acquisition of RYNO became more intense, I began to see another side to Barton emerge. He had a loud voice to accompany his size, and when his charm didn’t elicit the results he wanted, he used his authoritative demeanor combined with his sharp mind to bend others to his will.   Barton exploited his talent of quickly reading peoples’ character in order to throw them off balance…making them more susceptible to his way of thinking. I once was in a roomful of attorneys and Barton was speaking to us by conference phone from his safari in Africa. He managed to actually intimidate the high-powered corporate attorneys through the power of his intellect and business acumen.   As negotiations began to finalize, I became increasingly uneasy, although I couldn’t figure out why. Everything seemed to be going great and falling into place nicely. But the cliché of “gut feeling” became vividly real for me as my stomach started to actually hurt. Still, I had already backed out of an acquisition agreement with a company called FutureLink the prior year, and I ascribed my stomach pain to separation anxiety from parting with my businesses. I determined to stay the course.   It’s ironic that my road to uncovering Barton’s web of deceit began with an off-handed comment he made to me purely in order to impress. We were speaking about the CEO of Citrix, Mark Templeton, when Barton commented that he and Mark knew each other well and that they shared an interest in collecting cars (which I knew they both did). I happened to run into Mark a couple of weeks later and I commented that I understood he knew Barton Watson.   “Who?” he responded.   “Barton Watson.” I replied, “CEO of CyberNET in Grand Rapids, Michigan”.   “No,” said Mark. “I don’t know him”.   For those of you who have seen Mark walking the floors of iForum or Citrix Summit over the years, it is obvious that he must know thousands of people. It would have been understandable for him to have forgotten one Citrix reseller, yet he seemed certain that he didn’t know Barton and, in any case, Barton was not the type of man anyone was likely to forget meeting even one time.   At this point, I decided to do some more in-depth due diligence. I called up Citrix to verify another claim that Barton had made about his company’s certification with them - it turned out to be false. I called back UPS and Conway again to reconfirm their references, and this time I reached someone different at Conway since Barton’s contact was on vacation. The replacement said terrible things about CyberNET and insisted they would never use them again (and Conway in fact later ended up in a lawsuit with CyberNET).   I called up both Stanford University and Goldman Sachs to verify Barton’s claims of an MBA and former partnership respectively...both of which turned out to be untrue. When I politely confronted Barton in an email about the strange inconsistency I had discovered, he angrily retorted, “I will not have my integrity questioned. THE DEAL IS OFF!!!” This was quickly followed by a letter from his attorney demanding the return of every document related to our aborted merger and stating that if I mentioned a word about the details of our transaction to anyone that I would be sued.   Barton managed to keep his charade going another four years. VARBusiness listed CyberNET as #110 out of their VARBusiness 500 with sales for 2003 of $300M, though actual estimates are that they did between $10M - $12M. He continued his attempts to purchase other businesses and was successful in acquiring the majority of a company located in the Philippines. Barton maintained a bank of servers in his headquarters where he purportedly provided hosting for clients, although it turned out that most of the servers were merely shells with blinking lights.   On November 18, after drinking a $700 bottle of Le Tache wine at home, he placed a 911 call to police. “Hi, this is 911 emergency, what’s your emergency” asked the sheriff’s dispatcher. “Well, there’s a gun in my mouth” replied Barton. He repeatedly urged the dispatcher to relax. "The theory is that I wouldn’t call you if I didn't want help. But… I just want someone to clean up the mess." Barton proceeded to lecture the dispatcher about what was necessary to make a good bottle of wine. He was found dead at the age of 44 from a gunshot wound to the head.   With the FBI investigation and suicide, Barton and CyberNET have received a great deal of media attention during the past several months. It turns out that he had a long history of fraud, a criminal conviction, jail time and endless litigation. Although it cost me over $40,000 in attorney and CPA bills not to mention huge amounts of my time and the time of my staff, I have never been at all bitter about my fruitless efforts with the CyberNET acquisition. Barton was such a colorful and interesting character that I realized my encounter with him would be something I’d remember for the rest of my life. I also learned from my dealings with Barton the importance of not taking things at face value, and the importance of digging into the substance behind the numbers.     Copyright 2006-2007 Access Flow Inc. All Rights Reserved.