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A Provo-based company shuts down amid controversy and fraud complaints

SHARE A Provo-based company shuts down amid controversy and fraud complaints

PROVO — "They had a great potential," Catherine Wilson said, looking down as if she were trying to gather the right words. "They had competent people, people there who were really excellent."

Wilson was describing the hundreds of employees who are now jobless after Provo-based HIT Web Design shut its doors last Tuesday.

Wilson, who was a home-based contractor for HIT, didn't find out she, too, was out of a job until she got an e-mail from one of her clients.

"A client had e-mailed me and told me 'your company closed yesterday,' " Wilson said. "I worked all day Tuesday. My phone system stopped working, and I thought that's a little weird but it's not uncommon for us to have server problems."

Wilson says the company she used to work for owes her $2,000 in back wages. She doubts she will ever get the money from HIT.

"They owe us about $90,000," said Lee Livingston, the chief financial officer of Fibernet Corp., an Internet hosting company. "We also have an outstanding contract with HIT three times that amount."

"I had customers tell me they were being inaccurately charged for things that they hadn't ordered. At first, I didn't believe it. I thought they bought it and it's buyer's remorse — something like that. But, I heard it time and time again," Wilson said.

She also says that she heard stories from customers that they spent up to two hours waiting on hold in order to speak to someone in customer service — a route the client had to take in order to cancel services with HIT.

Fibernet is getting roughly 700 calls a day, the vast majority from former HIT customers.

"It's been a mad scramble. I can tell you that. I haven't slept much in the last few days here," said Lane Livingston, CEO of Fibernet.

The scramble began when HIT closed down March 8. A recording left on HIT Web Design's voice mail instructed callers to contact Fibernet. Fibernet executives said they had no knowledge that HIT was going to shut down and, subsequently, forward HIT's roughly 15,000 customers to Fibernet.

"We were clearly aware that they were struggling. On the other hand, we were not expecting this overnight and without warning," Lane Livingston said.

Another issue that must be addressed: Fibernet is hosting HIT customers without charge. Fibernet executives suspect that will probably be the case for another 30 to 60 days until they can get a handle on the number of HIT customers out there and sort through which clients need Web hosting and which ones require Web design — something Fibernet doesn't do.

"We are very frustrated," Lee Livingston said.

Tax lien documents show others may be just as frustrated. Utah County records show Aetna Health Inc. filed a tax lien against HIT Web Design for $44,788. However, HIT owes the IRS much more — $17.1 million, according to Utah County records.

"We would just ask that the customers be patient another day or two while we formulate a solution," Sonny Olsen, attorney for HIT Web Design, said in an interview.

"HIT's management team is hard at work collecting revenues and pooling assets to satisfy its obligations and will continue focusing all of its efforts to this task," Olsen later said in a statement

But former employees suspect those efforts may also be focused on building a new, separate company. Eric Davis, the former marketing and brand development director at HIT Web Design, says he believes HIT is changing its name again as it did a few years ago after customer complaints mounted.

"I was tasked with helping them transition names from Heritage Web Design to HIT Web Design," Davis said. "At the time, they were suffering from issues of reputation where they had received so many complaints that they couldn't, I guess for lack of a better word, escape the name that they had built."

KSL discovered the very day HIT Web Design closed its offices in Provo, a new Web design company started up in American Fork — ISO Web Works.

Davis directed us to ISO Web Work's landing page. He points out the page looks nearly identical to HIT's landing page.

"Exact same, even the code is the same. Nothing's been changed," Davis said. Davis should know. He says he designed the page for HIT.

"The software that they're selling on isowebworks.com is the same as what they were selling on HIT Web Design. The fulfillment promises are the same and it appears the people working on it are the same," Davis said.

Business registration for ISO Web Works is dated March 8, 2011, the same day HIT closed. The registration lists Kevin Morrill as the registered agent and Carrie Patterson as manager No. 2. Davis and other former employees of HIT have confirmed both Morrill and Patterson worked at HIT the day the doors closed. They also say Morrill and Patterson have a relationship with President and CEO of HIT Web Design David Aitken.

"I just know that Kevin Morrill is David Aitken's cousin and Carrie Patterson is David Aitken's little sister," Davis said.

In a written statement, Kevin Morrill admitted that he has hired former HIT Web Design employees.

But Morrill said, "The owner's of HIT Web Design are not employed by ISO Web Works or Remote IT Resources, nor do they have any ownership interests in either entity." HIT's attorney also echoed that sentiment.

Meantime, Catherine Wilson continues to get e-mails from former HIT clients.

"I am still receiving e-mails from clients and customers asking, 'When can you have your designer call me?'" she said. "It's only a fraction of the people out there who don't have live websites who haven't figured it out yet. They don't know that the company shut down."

The Utah County Attorney's Office is investigating HIT Web Design. Should any former HIT employees or clients wish to file a complaint, contact Jennifer Nakai, paralegal for the Utah County Attorney's Office Investigations Division, at 801- 851-8069. HIT's attorney also says anyone with past claims should contact the company via e-mail at: ceo@hitwebdesign.com.

e-mail: lprichard@ksl.com; lwilliams@ksl.com