Once upon a time, there was a Washington state-based ghostwriting studio/publishing house "hybrid" (read vanity publisher) called The Empty Canoe, LLC (a bizarrely appropriate name, as it turned out). Here's how the company was decribed by founders Mike and Kristina Canu (a.k.a. Kristina Valocchi) in a 2004 press release:
The Empty Canoe's growth has been attributed to the fact that primarily, it is a publishing house. By offering the service of ghostwriting, the company is able to get a quality of both idea and client which otherwise would be missed. For centuries the art of ghostwriting, writing eloquently on another's behalf, has been used. Until recently though, only the rich or famous have been able to afford such a service. The Empty Canoe has implemented a business plan that enables a lower initial ghostwriting fee in exchange for the right to publish. The studio gets into the proverbial storm of publishing with its clients.
There was a storm, all right, though possibly not the one the Canus intended. The company first came to my attention in September of last year, when I began receiving complaints from The Empty Canoe authors. They told me about unpaid royalties, books contracted and never published, fees paid for "ghostwriting" that was never done (authors paid between $5,000 and $10,000), misrepresentations of the company's ability and/or willingness to market and promote its books, and ghostwriters and editors whom the company never compensated for their work. This rash of complaints was precipitated by the fact that in August 2006, probably as a result of increasing pressure from angry clients, the Canus did a bunk. They suspended their email accounts, shut off their phones, and put their house up for lease. They also allowed their corporate standing to expire.
Fortunately, defrauded authors were pro-active. They organized a network so they could stay in touch with one another, and filed complaints with local law enforcement and with the Washington State Attorney General's Office. And their efforts were effective. On November 19, the Attorney General announced a settlement with the company.
As is often the case in these situations, the defendants have no assets, so they are unable to pay substantial fines or provide restitution to their victims. The total judgment is $10,000 (which represents the legal and other costs of prosecuting the case), with $94,000 in civil penalties suspended on condition that the Canus comply with the injunctive provisions of the settlement, by which they are "permanently enjoined and restrained" from the following acts in the State of Washington or directed at Washington residents:
- Making misrepresentations in the sale or marketing of any product or service
- Operating, owning, or otherwise participating in a publishing, ghostwriting, or book marketing business without first providing restitution to the 21 victims identified in the settlement and establishing a reserve account of no less than $50,000
- Failing to perform promised services
- Representing that they can perform services they can't actually deliver
- Representing that they can complete work in less time than the work will actually take
- Representing that they'll promote books in ways they don't actually intend to promote them
- Falsely representing that they've received offers from third-party companies
- Violating any provisions of the Unfair Business Practices-Consumer Protection Act.
The Canus are also required to waive their right to assert a statute of limitations defense in answer to any restitution claim brought against them by any consumer (which means that they can be sued by victims at any time). If they violate any of the settlement provisions, the suspended civil penalty will be enforced, and they will be liable for the costs associated with enforcement.
Sadly, the many boxes of material the Canus left behind when they absconded were destroyed by a cleaning company, so authors won't get their materials back.
In one sense, the judgment against The Empty Canoe is only a limited victory for writers, since it won't result in restitution, and doesn't prevent the Canus from starting up a similar scam in a state other than Washington. It's a huge victory, however, in that the Washington State Attorney General found this case worth pursuing. As I've noted before, it's tough to get law enforcement to pay attention to literary fraud. Hopefully, the judgment against the Canus will be another step on the long road to change.
There are two other lessons here. First, while a single complaint filed with the police or the Attorney General probably won't have much impact, a volume of them may--and the volume may be smaller than you think. In this case, just 21 complaints were enough to cause the Attorney General to take action. Second, where action occurs, it's often the result of scam victims working together. The network established by The Empty Canoe victims, who encouraged each other to gather together their documentation, file complaints, and not give up, was crucial to the Canus being brought to justice. Similar victim networks brought down Commonwealth Publications and the Deering Literary Agency. This should give hope to the authors who are currently uniting against Airleaf.
Believe it or not, The Empty Canoe's website is still online.