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Court Documents Regarding All Romance E-Books’ Disturbing Business Practices Surface

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“The Conscientious Burglar” Punch Magazine, 1920

Just when you thought it couldn’t get any worse…

In a previous article about the sudden closing of All Romance E-Books, LLC and the owner’s announcement that she was not going to pay any royalties for the 4th quarter sales of books from the over 5000 publishers and authors with books on the site. The ‘conscientious burglar’ said she would pay ARe victims 10 cents on the dollar in exchange for not pursuing legal action against the company. It was also outlined the somewhat suspect behavior of the owner and the company prior to this announcement and detailed the actions taken over the last twenty-four hours. Thanks to some court documents from Florida, it would appear this isn’t the first case of disturbing business practices associated with the company.

In order to see the whole story, you need to go back to 2014 when a dramatic conflict began between Lori James and her business partner, Barbara Perfetti Ulmer. In fact, Ulmer sued James and All Romance E-Books, LLC in the Sixth Judicial Circuit Court of Pinellas County, Florida – where ARe was established as a legal business entity – on March 2, 2015. Ulmer filed a complaint alleging that James had been “denying access to contemporaneous and current financial information related to All Romance, breach of duties (fiduciary, care, and loyalty) unjust enrichment, inequitable distribution, and judicial dissolution of All Romance.”

The information regarding this lawsuit is easily found thanks to the open court records in the state of Florida, and can be viewed online here. Interested parties do not need to have an account, the records cost no money to view, and every document pertinent to the lawsuit (including exhibits) are indexed and viewable. All you need to read these documents for yourself is one name.

Lori James.

The story that emerges is sordid and disturbing, and certainly seems to establish a tendency on the part of James to capitalize and profit off ARe without concern or fear of legal retribution. Ulmer and James established All Romance E-Books, LLC together as full partners in 2006. Ulmer was the Chief Financial Officer, and as she was resident in Florida that’s where the physical address of ARe was established. (Remember the three addresses in Florida? One was in Ulmer’s town, Safety Harbor, and appears to be a post office box, which would be understandable as she was the CFO.) James was the Chief Operating Officer, and under the terms of their original operating agreement (Exhibit A) both partners owned 50% of the company and all decisions were to be made by “unanimous agreement” while all financial considerations –  both contribution and distribution – were to be equally shared.

According to Ulmer’s complaint, in October of 2014, Dominick Addario, MD – a forensic psychiatrist affiliated with the University of California-San Diego – examined Ulmer to determine whether she was “disabled” and unable to perform her duties under the terms of their operating agreement, which stipulated that if a condition was “permanent or expected to be of an indefinite duration” and prohibited one of the partners from performing their duties, the other partner could assume full responsibility for the company, including all financial and operational decisions.

On November 26, 2014 Dr. Addario sent an email (Exhibit B) to both partners stating that: “…I recommended certain treatment and testing for her and suggest reevaluation in 3 to 6 months at which time she may once again be fit to carry out her duties…”

Obviously this was not a permanent or indefinite condition. However, the lawsuit goes on to state the following:

“On or around November 27, 2014 James unilaterally assumed the power and authority and began making all decisions affecting All Romance. James excluded Perfetti (Ulmer) from any further involvement in All Romance. On or around November 27, 2014 James also unilaterally decided to begin paying herself a salary. In the past while the Members of All Romance had made distributions, neither Member had ever drawn a salary from All Romance.”

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Despite the fact that Addario’s expert opinion (and he is, according to his website, a nationally recognized expert in forensic psychology) that Barbara Perfetti Ulmer was not disabled either permanently or indefinitely, Lori James presented her as disabled and completely cut her off from any decisions, policies, input, interaction, and remuneration from ARe. James began to pay herself a substantial salary, promoted herself to CEO of Are, and cut off Ulmer’s access to company websites, bookkeeping, and meetings.

When Ulmer asked to be included in meetings, James told her no and to “stop being a distraction.” When Ulmer asked to return to work, James said no. When Ulmer protested, James told her that “if she did not like what James was doing, that Perfetti(Ulmer) should go get a lawyer.” The following claims were made by Ulmer as James’s breaches of duty and contract against her:

a. Wrongfully declaring Perfetti a disabled member;
b. Locking Perfetti out of the business operations of All Romance;
c. Refusing to provide contemporaneous and current financial information;
d. Engaging in self-dealing by making excessive compensation and/or distributions to herself;
e. Conducting business matters to the oppression and exclusion of Perfetti, so that it is not practicable for All Romance to continue; and
f. Refusing to take the necessary action to dissolve All Romance and distribute to Perfetti one-half of the value.

So take a minute and think about this. Two years ago, James undertook a coup in which she declared her partner disabled without any corresponding medical opinion, refused her access to all information and access regarding the business or its finances, began paying herself an “excessive” amount, and refused to consider closing All Romance E-Books. 

In other words, she was violating her own operating agreement and taking money out of the company’s capital while painting her business partner of eight years as incapable of fulfilling her duties as Chief Financial Officer of the company.

No wonder Ulmer’s suit further avers that: “James is liable for all damage to property or persons resulting from James’s grossly negligent, reckless, willful, and/or intentional misconduct.”
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How strange, then, to discover that ARe is in such financial straits that they cannot pay authors their 4th quarter royalties for 2016 and is closing its doors with only three days’ notice on December 31, 2016. That means in an approximately two-year period from November, 2014 to December, 2016, Lori James was the sole member of the ARe partnership making business decisions and conducting the financial operations of the business.

During that two year period, she unilaterally and without the agreement of her partner, promoted herself to CEO and paid herself an “excessive” salary. And at the end of that two year period, the company has no capital and cannot continue operating – and in the process is stealing thousands of dollars from thousands of publishers and authors.

After our previous article on ARe, authors who are owed thousands of dollars by ARe left comments to that effect. And authors who published through ARe’s publishing program are being told they can get their intellectual property rights back…but only if they agree to take no royalties at all. But for writers, perhaps the saddest thing (aside from being stolen from) is what’s happened to long-time readers. One reader who is being victimized by this debacle left a comment that we felt we had to share, so that everyone can see the scope of ARe’s actions on a personal level.

I am a long time customer who has approximately 2200 books that I have purchased over the years.

When I started pulling books down to back up to another service, I noticed a gradual trickle down of my numbers in my library – I assume this means that books I have purchased are somehow being taken away from my library. Some of those books – they are not for sale anywhere else!!!!

I have only been able to pull down 230 thus far (backing up to another cloud service). I actually have a job so my time to download the remainder of my books over the next two days will be limited. I devastated that I am potentially going to be losing thousands of dollars in books that I purchased.

I won’t even get in to the ebucks and the group-on certificates that I had planned on redeeming after the first of the year. Or the fact that I pre-ordered a bunch of books.

This whole situation makes me sick.

And now we learn that the foundation for this supposed disaster was laid over two years ago, when Lori James manipulated Barbara Ulmer out of any sort of role in the company they owned together.

There are a few key elements to this series of events that I find personally disturbing. First, James denied Ulmer access to the financial books and any knowledge of or input on the company’s finances while at the same time giving herself a salary which is in opposition to the procedures contractually agreed upon by both parties in their operating agreement. I’m not a lawyer, but to a layman writer with a genuine working knowledge of publishing and contracts I can’t help but feel that is suspicious.

In my opinion, this establishes a prior intent on James’s part to extract and exploit ARe’s finances to her sole benefit. After all, there was no one outside of James who knew exactly how much capital the company had accumulated, or how and for what or whom that capital was spent. James was accountable to no one when it came to the financial status of the company, and no one had access to the accounts that could determine whether the money was being handled responsibly and legally.

Second, why would Barbara Ulmer be examined in San Diego by Dr. Addario, who is an admitted long-time associate of Lori James, to determine a disability that would prevent her from fulfilling her duties to ARe? I’m absolutely certain there are forensic psychiatrists in Florida with comparable experience and expertise. It doesn’t make sense that she would fly to California to be examined by a doctor of James’s choice in such a matter, especially if her continued involvement and profit from a company she co-owned was at stake.

Additionally, although Addario didn’t determine Ulmer to be permanently or indefinitely disabled, James went ahead with her plan to oust Ulmer and block her access to the company as if he had. On the very next day, allegedly, Ulmer’s access to the company was completely severed and employees were told she was no longer associated with ARe.

And third, how does this lawsuit and the allegations Ulmer made against James affect the current situation?

Well, for one thing – this lawsuit was dismissed on August 24, 2016 for lack of prosecution, meaning neither party had actively pursued the case for ten months. Why, after the allegations Ulmer made against her former partner, would she not continue with legal action?

Possibly because James reached a settlement with her out of court. If that is the case, it’s entirely possible that Ulmer forced the closure of ARe according to the terms of that 2006 operating agreement. The profits from the 4th quarter of 2016 might have gone to squaring the books, so to speak. Or in other words, Lori James had to compensate Barbara Ulmer in an equitable fashion – as in two years’ worth of an “excessive” salary and compensations plus the normal distribution of profits established in the 2006 contract. If this is what happened, then James’s management of ARe was indeed “grossly negligent, willful, and reckless.”

We called Barbara Ulmer for a comment or interview. So far, we have not heard back.

But if that’s not what happened, the other options are far uglier. At the very least, this is the result of disastrous management on James’s part. At the most, everything from the day Lori James purportedly stabbed her partner in the back to December 31 when ARe will close its doors and defiantly keep the royalties due to thousands of authors, was part of a plan to exploit the company and extract as much money from it as possible, regardless of the people and businesses who would be damaged as a result.

Either option is sickening. Was ARe destroyed as the result of rank stupidity? Or was it the victim of a pre-planned rape of its capital, profits, and contributors? Only the courts, most likely, will be able to decide.

As we mentioned in our previous article, authors who wish to refuse James’s arrogant offer of ten cents on the dollar should file a complaint with the Florida Attorney General’s Office. If authors or publishers wish to work in coordination with other writers, there is a Facebook group for ARe contributors who are already working with an attorney on a potential case. By joining in their effort and expanding the group, the chances are significantly higher that the state of Florida will be forced to examine the whole stinking mess.

If anyone wishes to research or cite the lawsuit between Barbara Ulmer and Lori James (All Romance Ebooks LLC) it’s Case Number 14-001375-C1 in the Circuit Court of the Sixth Judicial Circuit in and for Pinellas County, State of Florida. You can read the entirety of the original operation agreement from 2006, the complaint against James and ARe, the examination results of Dr. Addario, and all pertinent legal documents by doing a search for any of the litigants; names on the Pinellas County Florida Public Records website.

For readers and customers of All Romance E-Books who are losing years of e-book collections and thousands of dollars, some authors are offering replacement copies of their books free as a courtesy to people who once bought their titles. I Don’t write straight up romance, but I do write fantasy. Any readers who lost copies of their library of books at ARe (and not just my books) can get copies of my books this week to kick off their new collection if they contact me through my website. Maybe that will in some small way help until we get all the answers.

But the thing of it is? I think we all already know the answers. As any good forensic psychiatrist will attest, there’s plenty of research out there about behavioral patterns and their likely results. It’s difficult to imagine that the owner of a company who could force her partner out in such a ruthless and cold-blooded fashion has somehow accidentally screwed over all those authors. The thing about ruthlessness and cold-bloodedness is that neither attribute is spontaneous. These types of actions are not accidental. They are planned well in advance, plotted carefully, and executed mercilessly.

Which leads us to a disturbing question:

How does any author or publisher know that the sales numbers reported to them by ARe in the past two years are actually correct? If this is a serious case of fiscal malfeasance, there’s no way to know if the sales the site reported for a book was actually ten sales or sixty. Without the provenance of a CFO or an external source to examine the ARe books, the numbers reported to authors and publishers could have been wholly compromised.. Considering the circumstances and the background of the situation, it’s a legitimate concern.

And a legitimate question for the authors and their attorneys to demand answers to.

Let’s be frank: at this moment, it’s not known exactly what happened at ARe. But the addition of this previous court case and the alleged actions and behavior of Lori James against her former partner certainly raise a number of red flags for victims of ARe and their legal representatives to consider as they ponder legal action. And it’s certainly reasonable to wonder if Lori James, in order to pay an out of court settlement to her former partner, had to find the cash to do so fast. It’s the end of the year, after all. If the capital had already been eaten up by disbursements outside the original agreement (like an ‘excessive’ salary) then perhaps the only ready cash on hand were the profits of ARe in the final quarter of 2016 – the profits that have now been withheld from the rightful recipients.

Red flags, rotten fish in Denmark, alarms going off – the euphemisms all mean the same thing, really. Don’t give in. Join with the other authors and publishers who are already combining their efforts to fight against Lori James and All Romance E-Books, LLC. Sue for the full royalties you are legally owed by ARe. Use the legal system to force an investigation into ARe’s financial operations since the fall of 2014. Take a stand against the predatory actions of this company, and fight against a system that allows companies like this to steal your money and your rights.

Force the answers out of the predator. I bet they’ll be a lot more interesting than the theories racing through the publishing community right now. As of this writing, it’s December 30,2016…and All Romance E-Books, LLC under sole owner Lori James is still selling books when she has already stated the company will not pay the authors and publishers of those books the royalties for those sales.

Not only a thief, but a thief who tells you she’s going to steal your money before she steals it. A conscientious thief. Nice.

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About Celina Summers

Celina Summers is a speculative fiction author who mashes all kinds of genres into one giant fantasy amalgamation. Her first fantasy series, The Asphodel Cycle, was honored with multiple awards--including top ten finishes for all four books in the P&E Readers' Poll, multiple review site awards, as well as a prestigious Golden Rose nomination. Celina also writes contemporary literary fantasy under the pseudonym CA Chevault. Celina has worked as an editor for over a decade, including managing editor at two publishing houses. Celina blogs about publishing, sports, and politics regularly. A well-known caller on the Paul Finebaum Show and passionate football fan, when Celina takes times off it's usually on Saturdays in the fall. You can read her personal blog at www.kaantira.blogspot.com and her website is at www.cachevault.org
  • Fabian Black

    Here’s an odd thing. It’s possible to still access ARe’s publisher dashboard. In a moment of boredom I decided to check my account balance (talk about twisting the knife, lol.) Last time I looked earlier this month my 2016 Q4 commission was shown as $94.22. This morning it’s gone up to $134.83 for the same period. It doesn’t make any difference seeing as I won’t get it anyway, but it just seems odd that the amount has altered!? Wonder if anyone else who published on ARe has noticed similar changes? And why is the dashboard still accessible when nothing else is?

  • Charlayne Denney

    I’m willing to help any reader who lost any of my books in this mess. I didn’t lose a lot of money but going over her accounting of my sales and comparing it to my bank payments, she’s sloppy, if nothing else is wrong. I didn’t have the multi-thousand sales others did, heck, mine’s under three digits. But it’s the principle of this; the need to stop someone who thinks they can rob people and walk away laughing to her new condo on the pier in sunny San Diego and that no one will touch her.

    I would urge her former partner to speak up and tell her story first hand, let us know what went down and help by providing the information up until she was forced out so it can be compared to the records now.

    Thank you for putting out the word on this.

  • Celina Summers

    I was contacted by Al Jazeera–New York and will be interviewed by them this afternoon regarding the ARe shut down and how it affects indie authors. I really hope that I am a strong advocate for authorial rights–AND in this case, reader/customer rights when it comes to predatory business practices in the publishing industry. What’s great about this is that any time the MSM starts to take notice of events like these, we build a platform from which we can become a strong voice protecting our IP, publishing rights, and income. Authors–continue to spread the word. Join in the several groups online who are pursuing legal action against Lori James and ARe, Write blog posts of your own, detailing how you were personally and adversely affected by the events of the past week. And keep the faith. By working together, we can force action in cases like these and protect indie authors, small press, and our beloved and loyal readers from fraudulent fronts or outright theft.

  • LA Julian

    Sarah Madison raises a REALLY good question about where the money could possibly have gone here

    http://www.sarahmadisonfiction.com/2016/12/all-romance-ebooks-pulls-a-fast-one-what-you-can-do-to-fight-back/

    Because she’s right, ARe wasn’t a publishing company, so they had none of the massive costs of that industry – paying editors, copy-editors, proof readers, illustrators, and typesetters/ebook formatters – and they weren’t a bricks-&-mortar bookstore, so they had none of THAT massive overhead, either.

    No physical inventory, meaning no shipping, no rent, no cash registers and barcode scanners, no bookshelves and display units, no HVAC and lighting for 100s of square feet, no cleaning services, etc.

    They were solely an online retailer, so their expenses were webdesign, site hosting, PR and admin. And although a decent retail website and hosting isn’t peanuts, it was profitable enough, allowing them to pay royalties for many years without issue.

    So…what DID all the money go towards, that they ‘suddenly’ ran out?

  • Boruma Publishing

    My question as a fellow publisher is, why did she send out that letter at all? If larceny was at the core of this, why not quietly shut down the site but still keep collecting royalties for several more months? Why alert anyone and raise a ruckus, and offer such a ludicrous and insulting settlement? Better to simply go dark and slide away.

    Several of my authors were stunned and horrified by ARe’s unexpected closure. I have to admit I wasn’t. Any site that (allegedly) only sells one or two of an author’s books every couple of months, and then can’t even manage to pay them the proper royalties for said sales, just can’t expect to stay in business long.

    • LA Julian

      Except they may well have been fudging the sales reports, and just keeping the money, once James took over 2 years ago. A lot of authors are reporting that that’s when their sales started tanking. And other authors & publishers are reporting $1000s in lost quarter sales from this – it’s up to about $100k total reported losses, now.

      • Boruma Publishing

        Oh, I have no doubt whatsoever that the numbers were fudged. Several of my authors were listed there, and a few of them are top-ranked romance and erotica authors. They made zero sales on ARe…ZERO. What are the odds of that when they’re making hundreds of sales every month everywhere else they’re listed? If you’re going to steal, don’t be so obvious about it!

        I listed my own personal romance novels there in 2012. I won’t claim I’m a huge seller, but you’d expect some sales in 4 years, right? Two. They claimed that they paid me for one (more than a full year after the sale was made), though there’s no record of it in my bank records. The other one “accidentally” got discounted to $0.00, and they refused to fix the error even though they admitted it was on their end.

        I’m tremendously sorry so many authors and readers have gotten swindled by her dishonesty…she gives a bad name to all indie publishers. And I hope they nail her to the wall in every way possible!

  • Becky Thien

    TIPS FOR READERS:
    1. File a complaint with the Florida Attorney General. Items that you bought were taken from you. It may help the authors’ case if they hear from readers too
    2. If you pre-ordered books and didn’t receive them, file a complaint with your credit card company. You may be able to do this even if you received the book, especially if it was a recent purchase. Have transaction dates and amounts available. This won’t hurt our beloved authors. If the credit card company gives you your money back, go buy the same book from another outlet. The authors may not get the same commission, but it is better than nothing!

  • InklingBooks

    Take seriously this article’s suggestion to file a compliant, either as an author or a reader, with the Florida AG. The more complaints they get, the more likely action will be taken.

    http://www.myfloridalegal.com/pages.nsf/Main/E3EB45228E9229DD85257B05006E32EC

    Everyone who has been hurt should file, but you’re more likely to be heard if you live in Florida. If you have friends there, get them to complain. Keep in mind that litigation is very expensive. That is why going through the state AG may be the best approach.

    On the other hand, if Lori James has substantial assets, it might be possible to file a class action lawsuit on behalf of all interested authors, with the lawyer getting a slice of a winning settlement.

    Someone might also want to contact the National Writers Union about getting involved:

    https://nwu.org

    They have contacts with lawyers who represent authors in disputes.

  • Locksley Burn

    Speaking as a reader, I can honestly say I’m as disgusted as I am angry. Not only for the publishers and authors who are getting screwed over but for the readers too. I, unlike some, did receive the closure e-mail: yesterday. Guess what I spent a good portion of my New Years Eve doing?

    That’s right: backing up as much of my library (500+ e-books) as I possibly could while battling timeout errors, unprompted logouts, and fluctuating numbers in my library (whether this was due to authors (rightfully) pulling their e-books or skulduggery, I couldn’t say). I would say by the end I was probably able to download 80% of my library but with the fluctuating numbers, who really knows.

    On top of that – and this is something that I haven’t seen mentioned elsewhere so I don’t know if anyone else had this problem – I had about $15 in e-book ebucks I scrambled to spend only for DEFINITE trickery to happen there: unsure if they would still work, I decided to test it by buying 1 e-book for $2.99; it went through fine, ebucks still working, only for me to go check my balance to find out that it claimed I had $0.51 left!

    I know I’m luckier than some – I know of at least one person who lost their entire library because they didn’t know about the closure until I told them yesterday and by then it was too late – but that doesn’t make it any better. Actually, I think it makes it worse because if I’m *this* emotional, I can’t imagine what others are.

  • LA Julian

    OH HEY GUESS WHAT – DOESN’T LOOK LIKE THE ISP TOOK THE SITE DOWN!

    I’m betting that Rackspace doesn’t replace every single page on a site with an ungrammatical 404 retaining the client’s old favicon, when they suspend a domain for nonpayment of bills.

    She shuttered her own site and made up her deadline, as we suspected.

    https://uploads.disquscdn.com/images/29170c87cc27212a7fb850d137e13841cd8d9fd069c9fc3027fd222306bf61c1.jpg

  • Kasey Henton

    This sounds like something the outside publishers could sue over. There seems to be plenty of grounds.

  • lkagno

    I’m not involved as a writer in this, but I am a licensed psychologist. What is meant by the psychiatrist being an “admitted long time associate” of Ulmer? If that is true, it would be unethical for him to evaluate James in the first place. And why a *forensic* psychiatrist? Any clinical psychologist could do this evaluation. There is a reference to “Exhibit B” but I cannot find this in or related to this article.

    • Celina Summers

      Exhibit B is an email from Dr. Addario to Ulmer (Perfetti) and James that reads:

      “November 26 2014

      Dear Ms. Perfetti and Ms James
      As you are both aware I performed a fitness for duty medical exam of Barbara Perfetti. Findings are that she has a medical disability that prevent (sic) from working as chief financial officer. I recommend certain treatment and testing for her and suggest reevaluation in 3 to 6 months at which time she may once again be fit to carry out her duties. I will send a letter in this regard which you should both receive by next week.

      Regards
      Dominick Addario MD ”

      There were no documents relating the exact nature of Addario’s findings, which I assume would be per HIPAA regulations in open correspondence. (Also, Addario has a ‘long standing relationship’ with Lori James, not Barbara Ulmer according to the complaint in the lawsuit). My ongoing question here is why Ulmer would agree to this type of examination in the first place, and why would she travel across the country to undergo it when the doctor is patently invested in James’s side of the issue? (I almost wonder if this “exam” was done over the telephone instead of an actual physical appointment and evaluation) And, like you, I couldn’t figure out why a forensic psychologist was needed for what was obviously a fairly minor condition. Anything substantial particularly in the psychological realm wouldn’t call for a reevaluation in 3 to 6 months, particularly as many medications, for example, would take at least 3 months to begin demonstrating positive effects. I find this whole section of the case baffling, especially since Addario did not state this was a permanent or indefinite disabling condition but James proceeded as if it was and ousted Ulmer anyway. This email was sent almost two weeks after James had already kicked Ulmer out of the company that she owned half of. I did contact Ulmer and request a statement or interview, but received no reply. I plan on trying again after the holidays. Thank you for your insight on this. Any sort of relevant information on this aspect of the case would most certainly be helpful to the thousands of victims in this publishing fiasco.

      • LA Julian

        ‘Fractally dishonest’ is the phrase that keeps coming to mind, regarding Lori James.

      • My guess is that it was probably something like stress or depression, where the assumption might be that once you’ve dealt with the underlying cause (for example, working with Lori James) you’d expect symptoms to become manageable and to be able to return to work. I don’t know how it works in the US, but in the UK it’s common to sign people off for stress for short periods without giving them any significant treatment.

    • Charles Vincent

      Re lkagno  Charles Vincent  4 hours ago

      Charles, the FACT is, research shows that dumber people are more likely to be conservatives, probably because they’re poorly equipped to “think for themselves” in the first place, in addition to lacking the bandwidth to think critically about any issue. They prefer to have someone tell them what to think.

      what facts and what research?

      critical thinking isnt taught in public schools any more so I’m sure that is just a coincidence that public schools are liberal controlled edifices.

  • LA Julian

    Tax fraud is another possibility for the shutdown. You have a certain amount of leeway to run a business at a loss, in the US, before the IRS takes an interest. People who are buying very expensive things, like vacation homes, on which they might have to pay significant tax are sometimes tempted to try to ‘balance it out’ with a business loss…one that didn’t need to happen.

    And the selling of gift certificates and advertising right up to the end reminds me of the last days of Borders Books – they too were offering gift cards that could never be redeemed and yearly memberships that had only weeks of life left in them, knowing that they were about to announce their own shutdown…

    • Kelly Peterson

      I worked at Borders. We stopped selling gift cards and Borders Rewards memberships the minute the bankruptcy committee chose the liquidation over the offer that would keep us intact on July 19, 2011, and kept the stores and website open for months afterward. We worked hard to ensure that the offer included gift certificate redemption up until the last moment: October 7, 2011, when I turned off the website. This is a different thing altogether.

      • LA Julian

        I’ve heard from too many people who worked registers that they were told to keep on selling despite that. It’s not like all those cards evaporated from locations, after all.

  • Cornelia Amiri

    Thank you so much for posting all of this. It is deeply appreciated.

  • Nykk

    I don’t write romance, so I don’t have a dog in this fight, but everything about this situation smells fishy. Not just supermarket fishy either, I’m talking fresh-off-the-boat quayside fishmonger fishy. I hope you all band together and nail this bitch to the wall.

  • Rose McDonald

    I have been following this from the start on the 28th and I am so disgusted by the way it has been handled. I have over the years brought many books from ARe on good faith that the authors have been getting their well-deserved share. I have lost books not as many as some people but a few favourites, but this is small compare to what you wonderful authors have lost. I cannot image my husband coming home and saying his work is now only going to pay him 10% of his salary. We would not survive without any money to pay our mortgage or put food on the table for the kids.
    So what I want to say is THANK YOU to all the wonderful authors I have read over the years, you have all done your job. Made me believe in your stories made me cry, smile, laugh all in one page. So thank you for all the hard work you have done. Take care everyone.

  • Louise Lyndon

    Interesting article. Even more interesting is that one of my publishers stated in an email when this all hit the fan…

    “…we saw a significant decrease in sales there over the last couple of years…”

    Have we just found out the reason why?

    • Fabian Black

      I really do think so!

    • Celina Summers

      The timing is certainly a huge coincidence. Or not.

  • Quinn Anderson

    If anyone ordered “Hotline” by Quinn Anderson and had it disappear from their library, email me your receipt, and I will give you an e-copy of my book in the format of your choice.

    quinnandersonwrites@gmail.com

  • A Freedom Henley

    “How does any author or publisher know that the sales numbers reported to them by ARe in the past two years are actually correct?” I’ve been saying this myself since the BS started. I guess it’s time for an audit.

  • If anyone had a preorder of Ryker & Gavin with me through ARe, please reach out to me with your preorder purchase receipt and I will be happy to make sure you get Ryker & Gavin on release day.
    Also, if you can show me your purchase receipts or screen shot your library with my books, I’ll be sure to replace those for you.
    Email me at adellisauthor@gmail.com with Subject line: ARe replacement books

  • Rachel Leigh Smith

    I opened my account there as an indie publisher in the fall of 2014. Now I’m wondering just how much inaccurate reporting was done on my account. According to them, I never even made $10 (which could be true since I never promoted the fact I was there). But I also could have made $100 and would never know it.

    • Boruma Publishing

      Many of my authors, several of them top sellers on all other sites, had the same experience. Some of them made ZERO sales over the last several years, which is just ludicrous. The rest only made $5-8 at best every few months. And these are authors who are raking in thousands every month through other venues.

      My own personal experience: between 2012 and 2016, ARe allegedly only made two sales on all my books. They claim to have paid me for one, well more than a year after the sale was made, though I have no record of it. The other was “accidentally” discounted to $0.00, and even though they admitted the error was theirs, they refused to correct it and pay me.

      Oh, and you’ll love this: A few months ago, one of my authors queried me about why his books were on ARe when he’d never authorized us to list them there. I contacted James, and she said she got them through Ingram. We never submitted them to Ingram, either. After much steam-tunnel digging, we finally found out they were submitted to Ingram through Lulu, only Lulu refuses to divulge who most of their affiliates are…including Ingram. We told Lulu to delist the books through Ingram. ARe refused to remove them from their site even when we sent her Lulu’s takedown compliance e-mail! And the author…big surprise…never made a penny off those books while they were on her site.

      • LA Julian

        Ingram’s always been sketchy, but I didn’t know that about Lulu. What a kettle of snakes!

  • Patricia Logan

    My royalties from ARe took a desperate nosedive about 2 years ago. It all makes sense now. I just attributed the change to be because of Amazon rolling out KU about the same time (thinking that they must be attracting readers away from ARe). I feel so stupid now.

    • Celina Summers

      You’re not the first author I’ve heard say that honestly. To me, the timing of the ouster of Ulmer by James and the issues with ARe is so suspicious and raises such a huge red flag. Especially the part where she started paying herself an ‘excessive’ salary in addition to the other financial disbursements while denying her partner of eight years her share. At the very least, a lawsuit and investigation by the government would force an open accounting of the sales, profits, and royalty payments at ARe since 2014, including how much of the accumulated capital of the company was taken by Lori James as CEO. Until authors can see that kind of information, we won’t know where our money went and if we received all we were supposed to. Will we ever get that money? No. But by God, if we all work together, Lori James won’t get it either.

      • LA Julian

        Suddenly buying lots of expensive things without a logical explanation of where the money is coming from (aka ‘living beyond one’s means’) are enormous red flags for espionage – it’s how they realized that Aldrich Ames & Robert Hanssen had been turned by the KGB – and embezzling alike.

        ‘Oops! There’s no more money in the company today! Don’t know how that happened, tee hee!’ when the CEO has recently started treating the business like a personal piggy bank AND has been openly displaying her hauls on Facebook? That’s a gift that CIA and FBI only WISH they’d had back in the day.

        There was a recent WSJ article about how auditors and bankruptcy investigators use social media to find hidden assets, and sometimes it turns out to be all smoke and mirrors with the displayed ostentatious wealth either borrowed or costume jewelry, but other times it reveals things like massive collections of valuable antiques or new motor yachts or extra houses, which can be seized and liquidated. Are people saving down all the stuff on James’ pages already?

        http://www.local10.com/money/asset-hunters-find-flashy-social-media-users-often-bankrupt

        Also prepare for a story in which Lori & Maxwell ‘mysteriously vanish’ perhaps leaving behind a drifting sailboat in San Diego harbour – it would be traditional – only to be spotted in a Baja resort…

        • Celina Summers

          For me, the “splitting her time between San Diego and Big Bear Lake” was the beginning of a trail of bread crumbs that I anticipate lawyers and investigators to take a good, hard look at. We’re talking some serious money involved in owning two residences in that part of California. With her business partner claiming the unilateral salary on top of their other disbursements, I have to wonder how many authors’ royalties went to pay for that kind of style of living–and what else is tucked away in other properties, possessions, or unknown accounts. That’s why it’s essential to have a large, coordinated effort to get the state of Florida or the DoJ looking into this matter now. Regardless, for a retailer to announce in advance that they’re going to steal every royalty owed for the past three months is enough to focus a very real criminal case for the owner and any co-contributors to this obviously pre-planned fraud and theft.

      • Boruma Publishing

        Lori James already got it and spent it. The question is, will we be able to get it back?

  • LA Julian

    I’m wondering what happened to Shannon Hull, their Senior Accountant who is still listed in the About page as ‘Controller’ and has a Linked-in page showing her to be a qualified CPA & auditor. Was she ousted in the coup as well but left on the masthead? Or part of the scam?

    https://uploads.disquscdn.com/images/9f80781f131fa87e7b33201e6feff66960cdb66cfd88028ea1a8439beaaa2619.jpg

    • Vivian Lane

      Good question.

      • LA Julian

        Here’s a screencap of the relevant part of the About page (I also saved the HTML) and I really do wonder about Maxwell James, assistant to Lori and second listed employee of ARe:

        https://uploads.disquscdn.com/images/fc521ba294289b524a9cbae5d9329a27768a3d812a738e1090eab207a9563172.jpg

        • Sara Smolarek

          Would Maxwell be Lori’s husband, or son? Keep the corruption in the family?

          • LA Julian

            That’s my suspicion! But I’m not on Facebook and I’m not familiar w this particular group, it’s just the sort of thing that always seems to happen — and as I said elsewhere, it doesn’t ordinarily raise eyebrows because many small presses, like many small businesses generally, ARE family affairs.

            But that doesn’t make it a safe or a good practice for big OR small concerns, and when these outfits go down in flames, funneling cash to family members as overpaid staff or on the board or in some position that doesn’t actually mean anything beyond ‘collects a salary’ is almost always going to show up as part of the post mortem.

          • Celina Summers

            Honestly, it doesn’t matter if they took the site down. Archived screenshots were taken by web bots pretty much weekly for the past two years and can be accessed easily. Pulled up a Yahoo page from 1996 yesterday, so ARe in 2015 or 2016 shouldn’t be a problem at all.

          • LA Julian

            It’s the implicit deceit in ‘OH NO, THE SITE IS GOING DOWN BECAUSE WE’RE GOING OUT OF BUSINESS SO YOU ONLY HAVE 3 DAYS TO GET YOUR STUFF – BUT IT’S NOT OUR FAULT!!’ that bothers me.

            That ‘deadline’ was completely artificial, and they could absolutely have let people check their wishlists and back up their libraries – in fact, they ought to have a way that people can log in and simply pull down their own past purchases by checking off a list, without anyone having to track them down and download individually. (3D model vendor DAZ has had that for years, and I think even most of the smaller 3D stores have it now. So there’s no excuse for a place as big and established as ARe to fall down there.)

            But they let people think that the site was being taken down by external force – only they didn’t even cover their tracks very well! It’s insulting as well as criminal, a staged bit of melodrama. An absolute charade. They could turn it right back on now, unless they completely bollixed their backups. (Which admittedly is a very good possibility!)

          • Boruma Publishing

            If Perfetti forced James into an out-of-court settlement, closing the site at year’s end could have been part of the terms. But if so, that decision was made quite a while back, not last week. She had plenty of time to let people know, and should have done so promptly. She didn’t so she could continue to swindle royalties and advertising money from her authors.

          • Black Serpent Publishing

            I don’t remember how they are related although I think I have it in an email from him. He definitely did work because when I set up my account there as a publisher we had some email exchanges. I will have to go back and find them to see if I can find anything of interest.

          • Fabian Black

            I had a trawl through some page captures on the Wayback
            Machine and found a few references to ARe staff. In 2009 the only people listed on the ‘about us’ page are Lori and Perfetti.

            In March 2010 the staff list lengthens:

            Chief Operating Officer, Lori James

            Chief Financial Officer, Barbara Perfetti

            Manager Marketing and Promotions, Julie Cummings

            Manager Media and Public Relations, Cat Johnson

            Manager Information Technology, John Jacks

            By December 2010 it’s longer still:

            Chief Operating Officer, Lori James

            Chief Financial Officer, Barbara Perfetti

            General Counsel, Stacy Matulis

            Manager Marketing and Promotions, Julie Cummings

            Manager Media and Public Relations, Cat Johnson

            Manager Information Technology, John Jacks

            Community Manager, Kathryn Lively

            Senior Accountant, Shannon Hull

            Senior Publisher Liaison, Brittany Cummings

            Senior Reader/Author Liaison, Audrey Sharpe

            Author Liaison, Andrew Ulmer

            Author Liaison, Emily Johnston-O’Neill

            Maxwell James seems to make his first appearance in Jan 2011
            as an admin assistant:

            Chief Operating Officer, Lori James

            Chief Financial Officer, Barbara Perfetti

            General Counsel, Stacy Matulis

            Manager Marketing and Promotions, Julie Cummings

            Manager Media and Public Relations, Cat Johnson

            Manager Information Technology, John Jacks

            Community Manager, Kathryn Lively

            Senior Accountant, Shannon Hull

            Senior Publisher Liaison, Brittany Cummings

            Senior Reader/Author Liaison, Audrey Sharpe

            Publisher Liaison, Andrew Ulmer

            Publisher Liaison, Emily Johnston-O’Neill

            Publisher LIaison, Jeffrey Ulmer

            Administrative Assistant, Maxwell James

            Between November and December 2014 Perfetti vanishes from
            the list and Maxwell makes the leap to admin assistant to Lori James who is now CEO. The Ulmers, whom I assume were related to Perfetti, disappear from the cast list to speak:

            Chief Executive Officer, Lori James

            Administrative Assistant to the CEO, Maxwell James

            Controller, Shannon Hull

            Manager Information Technology, John Jacks

            Manager Marketing and Promotions, Julie Cummings

            Administrative Assistant to Manager Marketing and
            Promotions, Dawn Vaeoso

            Media and Public Relations, Cat Johnson

            Community and SEO Manager, Kathryn Lively

            Senior Reader/Author Liaison, Audrey Sharpe

            Senior Publisher Liaison, Sheri Alves

            Publisher Liaison, Brittany Cummings

            Publisher Liaison, Seth Grigas

            Publisher Liaison, Kali Celedon

            Screen captures peter out in April 2016.

          • LA Julian

            Excellent work! I notice they also lost their in-house lawyer around the time of the coup…

          • Fabian Black

            Maxwell James’s LinkedIn profile states that he has worked for ARe from 2012 to the present day. Maybe Lori forgot to tell him that she shut it down and skipped town so to speak! Note as well that his job description is ‘Publisher/Author Liaison’ – a bit of a step up from a mere admin assistant.

            https://www.linkedin.com/in/maxwellhjames
            I love that his ‘cares about’ list claims an interest in civil rights, social action and human rights. Shame that his employer/relative doesn’t appear to have the same ideals.

          • Boruma Publishing

            I’m not saying this is true, but it could have been her using a different name to make it look like she had multiple employees.

          • Jayne

            I believe Max is her son.

          • LA Julian

            So it’s going to end up like the Affluenza Mum & Son getting caught at a resort in Mexico…

      • Fabian Black

        There was also a lady called Julie Cummings who was at one time a manager of marketing and promotions at ARe, or at least that’s what was stated on her emails.

        • LA Julian

          Making up extra employees to make it look like the company is larger? Or to pay fictional people an extra salary that goes into the puppetmaster’s pocket – that’s an old, OLD embezzling trick!

          (The reason I was making jokes about ‘Meredith McIver’ is that McIver seems to be a fictional ghostwriter who exists solely to be blamed for mistakes made at Trump Tower – there’s one dubious proof of her independent existence on social media, and we know that DT has posed as different people on the telephone, claiming to be his own publicist under the name ‘John Barron’ in the past, to assure the media that he was the hottest, sexiest man in the city…)

  • Charlayne Denney

    ‘How does any author or publisher know that the sales numbers reported
    to them by ARe in the past two years are actually correct?’

    That’s been my question throughout this thing. I’m amazed at many parts of this horror story and I’m beginning to wonder if we really need to band together and do a class action on this one. Of course, Lori James will complain that we’re all out to get her and that she is the victim here, but I can bet a nice condo in San Diego would go a long way to paying the authors who have been wronged.

    Quite frankly, the malfeasance that she has shown in this should, if I was Queen, lead to a jail sentence for fraud, and since it’s not just Florida or California, I would think it would be a federal fraud suit.

    I didn’t make anything out of them, and with sales in other places, I should have something. I placed my first book for sale in their site in August 2013. But how do I know that their reporting is correct? I can’t. And I don’t think we really know the true depth of the criminality in this situation.

    Wow.

    • We have a fb group “P*ssed Off (former) ARe Authors” and are collating information for an attorney to look at. All authors who have been affected are welcome to join. No matter if Lori owes you just a dollar… its YOUR dollar!

  • Linda Mooney

    I filed a complaint with the Florida AG’s office. There was a button I could check for “over 60 years of age”. The statement beside the button that said that additional penalties could be levied for “targeting seniors”. Well, I am, so I did.

  • Fabian Black

    ‘How does any author or publisher know that the sales numbers reported to them by ARe in the past two years are actually correct?’

    We don’t. I do know that prior to 2014 I was regularly seeing good returns from ARe sales, but after that my reported sales nosedived. Could be nothing to do with malpractice of course, but this whole thing has made me wonder. 🙁

  • Brenda Cothern-Books

    Thank you for sharing the link to the group we formed on FB.

  • Tiuri Elvander

    How is it legal to make authors choose between getting their rights back and giving up on their earnings??? To me that reeks of blackmail???

    • Celina Summers

      It is blackmail. For writers to have their rights tied up means they will not be able to re-issue or re-publish their books, in effect stealing their intellectual property for years. That’s why the bankruptcy threat is a strong arm tactic. In a bankruptcy case, those books published through–not distributed through by published by–ARe will be tied up by creditors as potential profits. Not until the case is settled will those authors get their rights back, meaning the work of months or years basically went right down the tubes. I know authors whose rights are still tied up from publishers who went bankrupt almost ten years ago. And in order to prevent that, Lori James gave the writers a choice of no choices. Get 10% of their royalties and not get their books back OR get 0% of their royalties and get their rights back. Honestly, though, agreeing to anything with James at this point is a fool’s decision. Why anyone would believe she’d ACTUALLY remit the 10% royalties or revert IP rights is beyond me. She wouldn’t…but she would still try to hold anyone who agreed to that ‘do not sue’ part. And that’s what makes this whole affair stink to high heaven.

  • Jenni Jacobs

    This whole thing really makes me sick. As of right now, you actually can still buy books on the website (Dec. 31, 2016 4:23 Central European time). While the “buy now” buttons might not be there, you can still add books to your cart and checkout. I started using ARE.com several years ago, a little after they first opened. Because of this, I have lost several books (some of whom I tried to download and I repeatedly got an “error” message) and I am out a couple of dollars in ebucks. While I’m mad about losing the books and money, I’ve very pissed off about the fact that the writiers I thought I was supporting are not going to get what was owed to them. The business of romance writing is already hard enough without publishers and people like Ms. James screwing readers, writers, and publishers over.

    • Celina Summers

      Yep. I personally know writers–self-published writers–who are owed over $5000 by Lori James and ARe for 4th quarter royalties. And that’s assuming that the numbers ARe reported for sales were not falsified in some way. At this point, it’s the small, indie authors who are losing their livelihood, while Lori James lives in one of the most expensive cities in the US…and has a vacation home at Big Bear Lake. She also plans to continue to write fiction, and you can damn well bet that SHE expects 100% of the royalties due to her. It’s disgusting.

      • LA Julian

        Need to keep track of her nyms and make sure she doesn’t profit off readers further…

    • Charlayne Denney

      I was able to pull all three of mine down by deleting them from my dashboard. I took all of the excerpts and blurbs down at that time as well. Once this came to light, I pulled it all.

      Like other authors, if you did purchase my books through ARE, let me know and I’ll make it right.

      We love the readers (and I have books I bought through them myself) and I want to not lose readership over this.

      • Fabian Black

        I’ve tried deleting excerpts and blurbs on titles i’ve been unable to delete, but it doesn’t work. It won’t save the changes.

        • I couldn’t either so I changed the wording where my blurb was. It should allow you to save it that way. A lot of authors are putting “Not for Sale” or something similar in place of the blurb and/or excerpts.

        • Charlayne Denney

          Sounds like she locked it so no changes could be done. A way to keep selling without payment.

          Given the information given in this article, I’m thinking we need to class-action and go after her condo and other assets.

  • Carol Cobun

    They have actually stopped selling books. The buy buttons disappeared sometimes before noon Pacific time on the 30th.
    Which is good for the authors that still have books there, but bad for the customers that still had ebucks to spend. Lori James may be in for another legal battle if the customers can get together and file a class action against her for theft of the ebuck monies and any pre-order monies.

    • Stephani Hecht

      Start a group for the readers. The more action coming her way the better

      • LexValentine

        I agree with Steph. And I too noticed a huge dive in sales 2 years ago. After the EC debacle, I started to wonder if I could trust anyone to report my sales honestly.

        • Stephani Hecht

          That is why I started to self-pub. As this situation shows, it’s not perfect, but things are a bit more transparent.