Day: August 6, 2009

Company behind data center has little history and is part of Ohio telemarketing firm with checkered past

Data Knight 365 LLC, a new company with so little history that it doesn’t even show up in most public database searches, says it will spend millions of dollars and put 20 people to work building a data center in the Floyd County economic park on Christiansburg Pike, joining truck-recycler Dex and Dreaming Creek Timber Frame Homes in the mostly-empty complex.

DK3, as it is known, says on its two-page web site: "Data Knight 365 is a design/builder and operator of world-class data facilities," yet it does not list the location as any such data facilities and an extensive search of public databases does not point to a single facility built or operated by DK365. The company’s web site also says:

For the past 15 years, DK3 senior management staff has operated and managed Data Center storage and management facilities, collocation facilities, and private fiber networks providing connectivity services that ensure clients are able to run their businesses with maximum efficientcy and reliabiliy.

This "senior management staff" is not identified nor are the companies they woked for to give them all this experience. The company is also strangely vague in describing just exactly what data its proposed "data center" will be storing. Reports today’s Floyd Press:

“DK3 is pleased to announce its growth in the SW Virginia market,” Don Sabin of the company said. “We are very excited to announce our plans to expand into the state of Virginia. We will be constructing several buildings over the course of this project with an investment in excess of $25,000,000, and we will employ a variable workforce that will be in excess of twenty employees during the next twelve to eighteen months.

“The choice in location was easy based upon our business infrastructure needs and after working with the local community, the Economic Development Authority and Floyd County officials it is evident that not only did we want to be in the chosen Floyd County location but we were welcomed. Over the next several years DK3 will invest millions of dollars, but that will pale in comparison to the revenue dollars being generated with the State of Virginia and within the County of Floyd.

“Again, we would like to thank all Local and County officials and the Economic Development Authority in allowing our business to realize its immediate and long term goals.”

Sabin told the Press the company would seek local employees during the construction phase and thereafter. The company employees would be technicians and security personnel. He explained, “It is the kind of facility that requires 24-hour security, and a certain amount of technical support is needed to make sure everything is functioning properly.” Data storage is the function of a data center, he added.

Data Knight 365’s web site only went online recently. The domain name was registered in April not by a company with that name but by Bill Byler of Middlefield, Ohio. The street address for the domain registration is listed not to a company called Data Knight 365 but to Cherokee Hardwoods, an Amish wood products firm.

Don Sabin of DataKnight 365 was part of B-Telecom, Inc. (Bti), which the Ohio Secretary of State shut down in March of this year.

DK365 may not have much of a history but its parent company, Power Direct, a telemarketing call center operator, has a checkered past of legal problems and run-ins with the Federal Trade Commission for violating "Do Not Call Registry" rules.

In 2004, the FTC went after DirecTV and several telemarketing firms the company employed for calling people on the "Do Not Call" list. DirecTV in 2005 paid the largest fine in history — $5.3 million — for breaking the law.

In 2006, the FTC obtained $100,000 judgments and a permanent injunction against other telemarketers involved with DirecTV, including DRD, Inc. — a dba (doing business as) name for Power Direct of Cleveland.  The FTC settlement also penalized Daniel R. Delfino, the President and CEO of Power Direct.

Complaints against DRD and Power Direct continue to appear on web sites that deal with telemarketing abuses. Who Called Us and 800 Notes report many annoying calls from phone numbers that trace back to Power Direct.  Those who post on the web sites report receivng multiple calls startng at 7:30 in the morning and running until 10 at night from the company.

Complaints continue to be filed filed with the Better Business Bureau in Cleveland and the FTC in Washington.

All this leaves us wondering if anyone in Floyd County’s governmental apparatus bothers to check out those who want to locate here. While DK3 should be welcomed as a new business that will bring a non-polluting company to the county, its ownership by a telemarketing firm with a questionable history has to raise eyebrows. In addition, a brand new company that claims to be "a design/builder and operator of world-class data facilities" does not appear to, as yet, have built or operated its first facility.

The county government has a history of jumping into bed with partners they know little about. The Branwick Center, built by fast-talking Virginia Beach developer Robert Smithwick, loomed as a big potential liability for the county when the deadline approached that would have forced the county to pay for construction of the facility if a tenant could not be found. Dex, a subsidiary of Volvo, stepped in at the last minute only after the county agreed to pick up the company’s rent for the first phase of the lease and pay for changes to the building. If Dex does not renew its lease, the county is still on the hook for the cost of the building. Yet Floyd made the deal even though other Smithwick projects failed to deliver on their promises.

As Roanoke Times reporter Tonia Moxley reported on her blog in 2005:

Radford taxpayers, who have seen their city’s budget shrink in recent years, may have to shoulder up to $2.2 million in debt to pay for an empty industrial shell building Branwick built there in 2002.

Blacksburg taxpayers have paid Branwick nearly $70,000 since 2002 to help bring retail businesses to downtown, but officials can’t point to a single business that has opened because of Branwick’s work.

Branwick opened a new shell building in Floyd County in June, but so far does not have an interested tenant or a buyer. If it’s not filled by April 2007, the county will have to buy the $2 million building from Branwick.

Two other NRV projects listed on the company’s Web site portfolio, titled “Snapshots of Success,” do not exist.

A shell building slated for Giles County was proposed in 2002, but never was built because financing fell through – yet it was listed on the company’s Web site until Monday.

A “Blacksburg, Virginia Main Street” project that’s still listed on the site never existed, even on paper.

(UPDATE: Sun., Aug. 9, 2009 – Fellow Floyd County blogger David St. Lawrence uncovered some interesting information about the address in Cleveland, Ohio, used by Power Direct and Data Night 365. In addition, I’m getting a large number of emails and phone calls from residents not only of Floyd County but also from readers around the country who providing information about the companies and those involved in their operation. Some report the folks behind Data Knight 365 have made some incredible claims about who they are and what they have done. We’re checking those stories out.)