StormPay Executives Talk To Utahn Who Shows Up On Their Doorstep

Editor's note: ABC 4 is following a man from Provo, Utah on a quest for answers in the 12DailyPro debacle. Jeff Johnson not only put into 12 Daily Pro his own money, but convinced many of his family and friends to do the same. The exact numbers are still unknown, but hundreds of Utahns may have also been drawn to the money making scheme. Now millions of dollars are either in internet limbo or frozen in an account controlled by the payment service StormPay. This week, Johnson is traveling to the headquarters of both StormPay and 12 Daily Pro.

Jeff Johnson awoke Monday morning in Clarksville, Tennessee and immediately got two surprises. The first was a call from someone claiming to be Charis Johnson -- the elusive woman behind 12 Daily Pro. He wants to talk to her about claims that she's working on refunds for 12 Daily Pro members caught in the dispute between her and Storm Pay. She told him that's not going to happen. But she left open the possibility that her attorney might be willing to talk to him.

The other surprise also came by way of a phone call. It was an FBI agent from Charlotte. She took down his information and said they are investigating 12 Daily Pro. At this point, no follow-up interview is planned.

All this happened before he could get out of the parking lot of the motel and drive to the worldwide headquarters of Storm Pay -- 12 Daily Pro's onetime online payment partner that now appears to be it's sworn enemy. Storm Pay froze Charis' 12 Daily Pro account at the beginning of this month. That effectively cut off all fund transfers to and from 12 Daily Pro. Within days, Charis was forced to announce that no new memberships or upgrades could be processed -- essentially shutting down the program.

When Johnson arrived at the Stormpay headquarters building, he found it unimpressive. It's an old church turned pharmacy turned office that's currently being renovated. Across the street is a laundromat and car wash. It's flanked on either side by gas station convenience stores. Storm Pay's office is well removed from historic downtown Clarksville or the stately campus of Austin Peay. And yet, it is by some accounts a significant financial player in this town of just over 130,000. It's now the single largest sponsor of the Clarksville Raceway and reportedly the largest single client of a local bank. Storm Pay appears to prove the theory that an impressive "bricks and mortar" presence is not needed for internet successful.

And yet, executives of this growing internet payment service (they claim it is 2nd behind the industry's giant, PayPal) are saddled with a financial and public relations nightmare that by their own admission, they wish would just go away. For an hour and a half Monday afternoon, Jeff Johnson and ABC 4's Brent Hunsaker sat down with StormPay CEO Steve Girsky and owner John McConnell. It was a sometimes cordial, sometimes intense exchange that happened away from the ABC 4 camera that has been following Johnson on his journey for answers. Girsky and McConnell prohibited all photography. Since the scandal began, they say they've received numerous, credible death threats. For that reason, they would not allow us to show them or any of their employees.

As they see it, they froze the core 12 Daily Pro account to protect the money for 12 Daily Pro members. But many members apparently didn't see it that way. Since then, those members have flooded the offices of both the Middle Tennessee Better Business Bureau and the Tennessee Division of Consumer Affairs with complaints. Those complaints have resulted in a continued, unsatisfactory report from the bureau, a state audit and investigation by state agents. Girsky says all the scrutiny is a welcome chance for them to clear the air. "We have nothing to hide," he earlier told The Leaf-Chronicle of Clarksville.

What's more, they say their computer servers have been relentlessly attacked in an attempt to shut them down. Those attacks were somewhat successful. The Storm Pay website has been up and down for more than a week now.

On other aspects of the Storm Pay vs 12 Daily Pro controversy, Storm Pay offered the following explanations:

- While confirming Storm Pay has made "charge backs" to some 12 Daily Pro member accounts, they strongly deny they have gone into any member's bank or credit card account and taken out additional funds. Rumors have run wild on the internet and among many Utahns that such illegal debiting of accounts occurred. But as reported earlier, ABC 4 could find no first hand accounts proving the rumors.

- They claim that the freezing of the 12 Daily Pro account was ordered to preserve the money for investigators. But when pressed, they would not say which agency of the government made the order or if it came in the form of a subpoena. ABC 4 is aware of inquires initiated into the debacle by state agencies in North Carolina, Georgia, Tennessee and Utah. ABC 4 has also been told by Francine Giani, head of the Utah Division of Consumer Protection, subpoenas may be issued requiring 12 Daily Pro and/or Storm Pay to surrender its records.

- They say 12 Daily Pro represented only "3 to 10%" of Storm Pay's business. They say 12 Daily Pro didn't even "pop up on their radar" until November and December of 2005 when it's transactions skyrocketed. They also say in January, 12 Daily Pro was taking more and more time to pay it's members after they completed their 12 day cycle with the auto-surfer.

- They say they are willing to work with Charis and her attorney on organizing and distributing refunds to members, but they refuse to allow her access to any of the money. Still, they remain vague on when the money will be returned to members. They refused to offer a timetable. Nor would they say how it was to be determined who would get what. They call it a huge task and leave open the possibility that an independent, outside auditor might be called on to accomplish it. They also warn that they do not hold in the 12 Daily Pro account enough money to pay everyone what they claim they've lost.

- They say they are holding "millions of dollars" but refused to give an exact number. Last week, a source with first hand knowledge of the preliminary investigations in Tennessee told ABC 4 that they were holding $50,000,000. McConnell denies that. As for who would be entitled to the interested earned while the 12 Daily Pro money is frozen, McConnell said it was in a "non interest bearing" account with their bank.

At the end of the day, Jeff Johnson asked all of the questions he came to ask. But he did not get the hoped-for answers. Nevertheless, he gave credit to both men for their openness and candor. While still frustrated, Johnson says they both now have more "credibility" with him.

He flies to Charlotte, North Carolina on Tuesday.

ABC 4 will follow him there.

Story by: Brent Hunsaker