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Thursday, June 4, 2009

Did Digital Railroad screw you? What are you doing about it?

I was talking to photographer David Robin at PDN’s Photo Annual party last month and the talk turned to Digital Railroad. We both wondered exactly what had happened to bring it down, and why it shut down so quickly, instead of filing for bankruptcy. David lost a nominal amount of money, but we both wondered about the thousands of photographers and thousands upon thousands of dollars lost.

Where did the money go? Does anyone know? Does anyone want to find out? If a company that was basically operating with a fiduciary responsibility to photographers can disappear without official accountability, what’s to say Getty can’t do the same? I know several photographers who lost money and images back when Corbis bought Sygma, so this isn’t the first time photographers have been taken. But why do these things get swept under the rug, with the principals walking away with everything?

I’d be very interested in hearing stories, comments, opinions, inside information (your anonymity will be strictly guaranteed), or any other comments about the Digital Railroad situation.

Right now there are many more questions than answers. I will be trying to do some reporting on this in a future blog posting, but I’d like to hear from the photo community.

Photographers, the ball is in your court.

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8 Comments:

Anonymous Anonymous said...

As far as I am concerned the people who ran it are dead to me. I will never do business with them again. 'nuf said...

June 08, 2009  
Blogger Stella Kramer said...

Won't you tell me your story (in confidence of course)?

June 08, 2009  
Anonymous Veba said...

I'll tell you mine, though not much of a story.
Just like the Anonymous above, I was very angry, and now that you reminded me I am angry again... On Oct 14 I renewed my yearly subscription and one (1) day later I received a letter that they are going down... They took my money (was it around $600?) with them. Plus, minor thing, I was waiting for another payment from a rare client that actually both a photo from me through DRR... there they took another few hundreds...
It is really shocking how nobody did much, or even talked about it much... Everyone, it seems to me, like sheep, simply jumped in a hurry to Photoshelter. I did not and will not for quite some time recover my confidence in online business like that.
In retrospect, DRR was just a distraction... spent too much time online, playing with galleries, what not... Now I am back in the community, talking to real people and doing work with the real people.

June 08, 2009  
Blogger Stella Kramer said...

There are people who want to revisit this through legal channels. I will be writing more about it in a future post.

June 08, 2009  
Blogger David Robin said...

DRR has a contractual and legal obligation as a FIDUCIARY. The Princeton Law School definition of a fiduciary is: "(n) fiduciary (a person who holds assets in trust for a beneficiary) "it is illegal for a fiduciary to misappropriate money for personal gain".

DRR not only breached their contract with photographers but acted illegally by 'misappropriating money for personal gain'.

I am in talks with Victor Perlman, the legal counsel for ASMP, to explore legal options but we cannot proceed without you, the photographers, contributing your stories. Please contact Stella or myself with your detailed stories so that we can work on your behalf.

June 11, 2009  
Blogger Frank Evers said...

"DRR not only breached their contract with photographers but acted illegally by 'misappropriating money for personal gain'."

Those are fighting words, but who are you going after exactly? Charles Mauzy, Evan Nisselson and the board? Are you saying that they stole money? Is there any evidence of this or did the company simply run out of money?

I support the desire to find some resolution to what happened, but I am not sure that legal action is really going to get you anywhere. I expect that the only beneficiaries would be the lawyers. Am I missing something here? Please educate us. I really am very curious as to what else might have occurred here, short of another tech company running out of oxygen.

June 20, 2009  
Blogger Kim Haughton said...

Stella, well done for keeping DRR in the spotlight. I got screwed too.. Signed up fro annual subscription in July and they folded in October, three months for the price of twelve, so I'm down about $415. I was very pissed off at the time, not just about the loss of money but also all the lost time that I had spent building the archive and galleries etc..

June 23, 2009  
Blogger David Robin said...

Responding to Frank Evers...

The dealings of DRR and its executives appear to be a long and sordid story that we (concerned photographers, ASMP legal, myself, trade organizations etc.) are beginning to uncover. The terms "fraud" and "theft" are weighty words but the evidence that is mounting from photographers' direct experiences seems to point to intentional acts of deception that could be prosecuted. There is a disturbing pattern being revealed here that involves everything from deceptive contracts to the unlawful collection and retention of both licensing and membership fees.

Running out of money of course is not in itself illegal. But collecting money while acting as a legal trustee or fiduciary and failing to distribute that money to its owners is indeed a crime. The evidence becomes compounded when we find out that the monies (licensing fees) collected on the photographers’ behalf was not reported as required but instead used by the executives (Evan Nisselsen and Charles Mauzy) to pay off one of their creditors, a creditor that might have had ties to Evan Nisselson’s father.

In short the DRR executives used money that did not belong to them and that they had collected fraudulently to bail themselves out of dept. This coupled with direct evidence that DRR continued to collect fees and dues right up until the day they closed their doors with clearly no intention of providing the services they had been paid to perform would indicate that they had knowingly and with intent committed a fraudulent act.

So far there has been shockingly little if anything written about the DRR fraud with all the financial and legal facts presented in detail. The only stories written have simply regurgitated the DRR talking points without any research or hard questions being asked of the executives. And since the DRR executives never filed for bankruptcy they have never been forced by the courts to reveal their financial dealings truthfully and completely while allowing a judge to make determinations as to distribution of the remaining assets and if there has been any wrongdoing.

The end game here is not about retribution. It is about getting the truth well publicized and disseminated to the photo community so as to educate photographers on how to protect themselves and recognize the red flags of a scam now and in the future.

An uninformed photo community is a boon to future scammers and will only serve to set up the next fraud to be leveled on our colleagues. Whether or not you are directly affected by this situation passivity and in-action are an act of self-deception. As photographers you owe it to yourselves and the industry you draw your living from to get involved and informed. That is why we are asking that if you were a member of DRR and feel that you were ripped-off please tell us your stories (in confidence if you request) in order to help protect your livelihood.

We are currently researching all options open to us through the courts and legal system including filing criminal and civil complaints with the appropriate States Attorney General in order to get to the truth and hold the DRR executives accountable. And in so doing if there happens be a financial remedy available for the victims all the better.

Our industry has a history of successfully going up against corporations that have attempted to defraud us (i.e. Tony Stone Photographers vs. Getty Images). Win or lose historically criminal and/or civil action goes a long way in emboldening our colleagues to stand up against this kind of fraud going forward while serving as a warning to the future Evan Nisselsens and Charles Mauzys of the world that the photo community and its trade organizations are watching.

June 23, 2009  

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