Man Convicted for $11 Million Fraud Touts Verkada PartnershipBy John Honovich and Charles Rollet, Published Jan 29, 2021, 07:49am EST
A Pennsylvania man convicted of a multi-million dollar fraud has become a security systems integrator touting his partnership with Verkada two years after his release from a five-year federal sentence.
The man remains on probation after being convicted of "mail fraud, wire fraud and loan fraud" of more than 50 of his clients, even earning a segment on the TV show American Greed.
This raises concerns about who should be selling security systems and what practices manufacturers should take in vetting and choosing their partners.
Burns Runs Integrator
Timothy D. Burns is the founder and CEO of Reliant, Enterprise IT Solutions which his LinkedIn describes as "a full-service IT Consulting firm" providing Network Security & Infrastructure and Electronic Security":
Prior to founding Reliant in 2018, Burns was in prison.
Burns was released on January 15, 2019, per court records:
Burns told IPVM that "My official sentence ended 7/18/2018 then followed by 6 months supervised release". He confirmed that he is currently "under probation which will be ending shortly".
In 2015, Burns was sentenced to five years in prison for "mail fraud, wire fraud, and loan fraud" after pleading guilty in 2013; between "at least" 2007 and 2012, Burns used money "entrusted to him by more than 50 clients" for his "personal gain", including "more than $4 million" to "buy a shore home in Avalon, New Jersey", the DOJ said:
Facebook Shares Issue
FBI Agent Chris Philips described Burns in an episode of American Greed:
Tim Burns is in a difficult position himself, a desperate situation. He had been embezzling money from his clients. He needed to repay this money and he also wanted to make money for himself.
The 7:34 minute American Greed excerpt highlights Burns' case:
Burns Response On Prison
Burns told IPVM that he wanted to ensure that IPVM is aware of the facts, specifically:
These opinions especially the 9th Circuit clearly explain the circumstances of my matter. Outside of that I have no comment. Anything that is written to the contrary will be responded to you by my counsel.
Burns sued Stratos for the fraud Stratos committed, with the 3rd Circuit Court opinion explaining that:
Burns sought to recover $60 million dollars, the amount he claims he would have earned in commissions and fees if the transaction had closed.
The 9th Circuit Court opinion has many other details including noting that:
Throughout the negotiations, managing agent Burns communicated with “Dennis” through Stratos’s email@example.com email address
And the 9th Circuit Court opinion differentiated the frauds that occurred:
Although managing agent Burns did spend investor money, it was not the same investors or money at issue here; managing agent Burns did not participate in the wrongdoing alleged here but defrauded a different group of investors with respect to a separate and unrelated investment fund. [emphasis added]
Burns Business Post Release
Burns told IPVM that 'my businesses currently do $15 million' and that 'ReliantIT is less than 30% of my businesses'. Burns's LinkedIn profile also lists "Reliant Group of Companies", "an early stage Venture Capital Firm" as well as Burns Construction.
Burns is active on LinkedIn, repeatedly posting about Verkada, for example, writing this month he was "look[ing] forward to expanding our partnership with Verkada to much greater levels":
In response, a Verkada salesperson commented "it's been a pleasure working with you on this project" and that he was also "looking forward to seeing what the future has in store":
Here is another Verkada project touted by Reliant last week:
Reliant, Enterprise IT is small, reporting 5 employees on its LinkedIn:
Prison Time Obscured
In a speaker profile for Penn State's 2019 Smart Campus Summit, Burns is described as a "consultant for over 20 years" omitting mention of the 5-year sentence:
Note: Reliant IT was previously named / marketed as ZenaniIT.
Penn State told IPVM that they were not aware of Burns' background:
Penn State was not aware of this speaker’s background and notes that he was one of 22 speakers at this annual conference, which rotates among various universities. As is common for academic conferences, background checks are not typically conducted for speakers visiting areas open to the public, and speakers are generally selected from broadly publicized calls for presenters.
Meanwhile, Burns' LinkedIn profile makes no mention of his prison time, instead stating that while incarcerated he founded and ran a company:
Burns emphasized to us that:
I do not hide from my past. I look forward to working with my very close contacts who run major enterprises and organizations.
We noted to Burns that his bio on Reliant IT's website does hide the prison sentence, claiming that:
Tim founded a successful family office for a network of affluent Philadelphia families
By contrast, the DOJ determined that:
[Burns] converted money entrusted to him by more than 50 clients and would-be investors for his personal gain [...] [including] to buy a shore home in Avalon, New Jersey, for more than $4 million
Burns replied to IPVM that:
I stand by my previous comments to you and look forward to growing the 3 companies we are today with our trusted customers and partners and the 4th that we will be announcing shortly.
Verkada Cites Ethical Business Practices
We previewed our findings and concerns with Verkada, Verkada responded generally with a link to their ethical business practices page, saying:
Thanks for raising this to my attention. You can find the terms of our ethical business practices on our partner application page here, which we expect all partners to abide by in their dealings with Verkada and end customers.
Verkada's ethical business practices center around complying with laws but Verkada offered no clarity about this situation or about partnering with felons, convicted of fraud, on parole.
Question of Manufacturer Partnership
One question the Burns case raises is what responsibility should manufacturers have for the companies and people they partner with?
Security System Integrators As Felons?
In particular, the issue is what responsibility do security system manufacturers and integrators have to partner with or be run by felons? This was discussed in a recent IPVM forum: Should We Hire An Ex-Con?
Criminal convictions can run a wide range of offenses, many of which many will find to be minor.
However, a fraud conviction plus being on parole for that conviction is clearly a more serious concern for those who specify, sell and maintain security systems, especially for large enterprises and government clients who are aiming to mitigate security risks yet could be exposing them to greater ones that are obscured by their providers.
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Update February 2021
A Verkada salesperson posts a LinkedIn update touting a 'great partnership' with Burns:
Update Mary 2021
Verkada and Burns are co-sponsoring a Nascar race car this weekend, says Burns:
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