BBG Communications headquarters in Otay Mesa
  • BBG Communications headquarters in Otay Mesa
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People using overseas pay phones are shelling out $54 and $55 for one-minute calls when using their credit cards, and they say that phone instructions give them no warning of such staggering charges. Understandably, the victims are screaming. That’s one reason there are lawsuits charging a San Diego company, BBG Communications, with business-code violations and exploitation of consumers.

The company’s headquarters is located at 1658 Gailes Boulevard in Otay Mesa, and it also has a San Ysidro office. BBG is 95 percent–owned by the families of Gregorio and Rafael Galicot, American citizens whose father is a prominent promoter of Tijuana’s good life. Gregorio is now president. The company has phones in hotels and airports all over the world, including Lindbergh Field, and processes 300 million minutes of calls each month, according to one suit.

Those who complain are routed to customer-service representatives in Tijuana who insist they must have the victim’s credit-card number before they can consider further action. That demand often aborts the complaint call, says attorney John Mattes, who filed the main suit along with Alan Mansfield. Mattes is a former Fox News investigator in San Diego who has also worked for ABC World News and many other organizations. The plaintiffs are Vlastimil Sajfr and David Keeports, who say they are victims of outrageous credit-card phone charges. There is a similar suit filed by Nicolas Wood in San Diego federal court.

Hundreds of others have complained about BBG Communications to Mattes’s website. His and Mansfield’s suit is intended to be a class action representing the aggrieved. BBG gets an F (the lowest) rating from the San Diego Better Business Bureau, which has handled no fewer than 510 complaints about the company in the past three years and 165 in the past 12 months.

I called BBG and asked to talk with Gregorio or Rafael Galicot. I was told I would have to talk with the company’s longtime law firm, Sheppard, Mullin, Richter & Hampton. But attorneys on the case would not respond to my questions.

The Mattes/Mansfield suit originally went to United States District Court Judge Marilyn Huff. She is often pro-business, but when BBG asked for a dismissal, she rebuffed the company on most counts. Sheppard Mullin argued that Switzerland-based BBG Global AG, not San Diego’s BBG Communications, was the company providing the service. But Huff rejected the argument, saying that some of the conduct may have occurred in California and the plaintiffs are California residents.

Huff also said that the plaintiffs had sufficiently shown that BBG’s practices were unlawful under California’s unfair competition law. Among other things, Huff said that the case should go forward on the plaintiffs’ claim that BBG’s collection personnel and customer service representatives recorded phone calls without the consent of those complaining about the huge charges. Huff did say that plaintiff Keeports didn’t have standing because his wife actually made the call, not he.

BBG petitioned the Ninth Circuit appeals court for emergency intervention in Huff’s decision. The appeals court thumbed down the request. Then, in an unrelated move, court officials decided that Huff’s caseload was too onerous, and the BBG case moved to U.S. District Judge Anthony Battaglia.

BBG is using similar arguments before Battaglia. It is attempting to get summary judgment (the case dropped before it goes to trial) later this year. The plaintiffs should be suing BBG Global, not BBG Communications, insists Sheppard Mullin. California law should not apply to conduct outside its borders.

Sheppard Mullin claims that “No unity of interest between BBG Communications and BBG Global exists…BBG Global and BBG Communications are separate entities and operations…BBG Global plays no role in BBG Communications’ daily operations or vice versa.”

Hmm...let’s look at that assertion. In the case filed by Nicolas Wood, one Irene Fedier, managing director of BBG Global, entered a declaration on behalf of BBG. She claimed that BBG Global “does not have any officers, offices or employees in California.” But in the next paragraph she declares that the BBG Global board includes “Gregorio Galicot [who resides in California].”

Officers are generally considered those who run day-to-day operations, but Money House, which posts corporate information about Swiss companies on the internet, has consistently listed Gregorio Galicot as president of BBG Global. Fedier testified that before each board meeting, she forwards financial documents to Galicot.

Further “the back office administrative duties have been outsourced to BBG Communications…BBG Communications provides certain billing-related, accounting, bookkeeping and database management services to BBG Global.” Even Sheppard Mullin admits that but claims that the companies “keep separate books and records.”

And each day, BBG Communications in San Diego receives phone-billing information from BBG Global and the companies with which it works.

In my own opinion, BBG Communications is going to have an extremely difficult time showing that it is separate from BBG Global.

Mansfield went to Switzerland to view the BBG Global office. The Mattes/Mansfield lawsuit states that BBG Global’s “address is in an apartment building with a BBG Global AG sign taped at the door.” Mattes says that it smacks of an offshore “brass plate” bank in a remote location with few employees and very little capital.

Fedier claimed in her declaration that “the offices are not located in an apartment complex, but rather in a multi-use building, whose first level is dedicated exclusively to commercial use, which is where BBG Global’s office is located.”

Maybe the judge and jury (if the case gets that far) will take a jaunt to Baar, Switzerland — during ski season, of course — to see for themselves.

Fedier stated that the BBG Global office is 460 square feet, with three offices, a conference room, and a supply room. But she asserted that BBG Global provides services in 50 different countries and has more than 300 agents, more than 100 technicians, and more than 50 administrative personnel in 50 international offices. Frankly, an office of 460 square feet sounds awfully small to manage a purported empire that large.

BBG Global “is a shell company used primarily for funneling money out of Europe,” says the Mattes/Mansfield suit. Sheppard Mullin denies the charge.

Sheppard Mullin expects Judge Battaglia to act on the request for summary judgment later this year. There are many more variables in this case for the court to consider.

Meanwhile, we all might ponder this: according to the Mattes/Mansfield suit, no state or regulatory agency has primary, exclusive, or any jurisdiction over BBG Communications’s actions. It’s a wonder more companies don’t enter the business and, without government oversight, charge credit-card customers $54 for a one-minute call. ■

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plaintiff Aug. 10, 2011 @ 12:16 p.m.

I am one of the plaintiffs on the Mattes/Mansfield lawsuit (now regarding only the issue of call recording). Shortly before this lawsuit began, I sent a letter of complaint to BBG Communications, Inc. Six weeks later I received a letter from Sheppard Mullin attorney Jerry Gumpel that stated “Please be advised that you addressed your letter to the wrong party. BBG Communications, Inc. does not provide telecommunication services for calls originating in Europe. The correct party to whom you should address your letter to is BBG Global AG, a Swiss corporation.” Yet the very website of BBG Communications, Inc. (http://bbgcommunications.com/bbg/aboutus.php) states “our interconnect and billing arrangements enable us to directly carry and deliver telecommunications traffic and bill customers in Canada, Germany, Japan, UK, the US and virtually all countries with credit card transactions.”

Somebody is not telling the truth.

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Javajoe25 Aug. 10, 2011 @ 12:21 p.m.

Ha! And people scream about too much government in our lives; too much oversight. This is a perfect example of why lots of government in our lives is absolutely necessary: the "free hand" of the private market often ends up around some citizens throat (and wallet). Great article, Don.

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Don Bauder Aug. 10, 2011 @ 2:05 p.m.

I have written lots of articles extremely critical of regulation, too. Specifically, big law firms control the regulators, particularly the Securities and Exchange Commission. However, laissez faire does not work. The 2007-2009 collapse, and the $13 trillion Fed/Treasury bailout of financial institutions make the case that you can't trust the private sector to behave responsibly. We must have regulation, however weak and corrupt that regulation is. That 2007-2009 collapse and bailout also poignantly show the hypocrisy of private enterprise that claims it must be free of government dominance to operate efficiently, but then depends on taxpayer funds to bail it out. Best, Don Bauder

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Twister Aug. 10, 2011 @ 2:11 p.m.

Context is everything. Except when you are manipulating the strings . . . and the puppets dance accordingly . . . as the moving "hand" thus writes. Supplicate yourselves before the exalted--high upon the bench, berobed in raiments handed down through history, from the Inquisition and beyond . . .

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Don Bauder Aug. 10, 2011 @ 9:31 p.m.

That's what the upper 2% wants: supplication. And that's what it gets -- from Congress, the White House, the Supreme Court. Best, Don Bauder

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Twister Aug. 10, 2011 @ 2:27 p.m.

"Bailouts" are now entrenched as "the way business is done." No, it won't work, but the exalted will ride it, much as Slim Pickens rode The Bomb, all the way down, waving their Stetsons onward, singing "Some Sunny Day . . . don't know where, don't know when . . ." until the Big Crash works its magic. Then, "things" will get back to NORMAL--AFTER, the streets run red and only the meek survive.

Such cries as these, like "REPENT! The end of the world is near," will go unheeded. Well, I guess if its either The World or The Earth, natural law will choose the latter.

Re: dbauder 2:05 p.m., Aug 10, 2011

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Javajoe25 Aug. 10, 2011 @ 7:27 p.m.

This is so crazy; the corporations are doing phenomenally well. Profits are better than ever.

The problem, as I see it, is those profits are not used to address the needs of society by thanks to the lenient taxation laws. It just amazes me that our government is in such a financial bind while all of the biggest corporations, many of whom benefited from tax breaks and other forms of government largesse, are doing great but don't even consider the problems of their employees, as their problems.

That is the essence of it: the haves have it, and those that don't can go fish. The people in London have totally had it with this crap and while much of the strife is being attributed to small groups of looters, the initial action was in response to a cop killing a kid, and that set off the fury. We need that here.

The gap between the rich and poor have grown to a totally unacceptable level and if the politicians can't fix it, then maybe it's time for the citizens to raise holy hell and let the powers that be know that this is not the America we want. Others have asked "Where are the demonstrations?" I wonder too. It's obvious this system of representational government is a con and a scam designed to benefit the wealthy. It's totally ineffective when it comes to doing something that would genuinely benefit those who need the help.

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Don Bauder Aug. 10, 2011 @ 9:34 p.m.

As I have said many times, we have a plutonomy -- an economy designed for the rich. However, even Alan Greenspan warned in his book that the massive gap between the top tier and the other Americans could precipitate violence. And Greenspan helped create this gap, just as Bernanke is doing. Best, Don Bauder

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Don Bauder Aug. 10, 2011 @ 9:38 p.m.

Louis XV said, "apres moi le deluge," or "after me, the deluge." He was probably coached by Madame de Pompadour. As they say, "Cherchez la femme." Best, Don Bauder

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SurfPuppy619 Aug. 10, 2011 @ 11:14 p.m.

As I have said many times, we have a plutonomy -- an economy designed for the rich. However, even Alan Greenspan warned in his book that the massive gap between the top tier and the other Americans could precipitate violence.

Look at Greece, London, that kind if social unrest is going to be happenign here soon......I guarantee it.

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Don Bauder Aug. 11, 2011 @ 7:28 a.m.

The fact that high unemployment will be with us for years suggests you may be right. Best, Don Bauder

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SurfPuppy619 Aug. 10, 2011 @ 11:20 p.m.

John Mattes, who filed the main suit along with Alan Mansfield. Mattes is a former Fox News investigator in San Diego

This was the guy that got attacked when he uncovered a real estate scam for Fox local news, and it went viral, nationwide.

I did not know this guy was a lawyer though. Don, ask MAttes if he got any money out of the guy that attacked him, Assad "Sam" Suleiman. Mattes sued him for assault, and this Sam clown went to county jail for a year as I recall for the attack-he should have been sent to state prison for that attack.

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Don Bauder Aug. 11, 2011 @ 7:29 a.m.

I didn't ask Mattes that question. Maybe I should. Best, Don Bauder

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SurfPuppy619 Aug. 11, 2011 @ 9:47 a.m.

If you talk with him, find out what happened with his civil suit against Suleiman.

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SurfPuppy619 Aug. 10, 2011 @ 11:23 p.m.

The Mattes/Mansfield suit originally went to United States District Court Judge Marilyn Huff. She is often pro-business, but when BBG asked for a dismissal, she rebuffed the company on most counts.

Huff has the brain power of an untrained circus chimp. She is nothing but a right wing moron who will give the gov and Big Business every break in the book.

She has no business sitting on the bench. She has no qualites needed of a judge-especially a federal judge, who should be of a fair, unbiased mind, a judge who rules on the law, not ideology.

Her sorry stupid ass should have been kicked off the bench years ago. Huff is the local version of Clarence Thomas.

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Don Bauder Aug. 11, 2011 @ 7:44 a.m.

I don't agree with your assessment. Before she went on the bench, she would occasionally represent the U-T. When an Orange County lawyer subpoenaed me to testify in a case, she and I drove up there and she convinced the judge that a journalist should not be forced to testify. We had a nice conversation and I thought she was intelligent and thoughtful. Best, Don Bauder

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SurfPuppy619 Aug. 11, 2011 @ 9:46 a.m.

We have very different, and oppposite views of her then.

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Don Bauder Aug. 11, 2011 @ 3:27 p.m.

Definitely. I also thought her ruling in BBG Communications was well laid out and followed the law. Now it is in the hands of another judge. Best, Don Bauder

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