San Antonio Express-News (Sunday)
Vysk seems to have gone stealth
only technology in the world that works to prevent eavesdropping and hacking of mobile phones at all times, that has been tested by governments all over the world (on four continents), and no one has been able to penetrate our system.”
He added, “As with any start up, we have faced tough decisions at times when financial constraints became tight. Ultimately, in time, we have always taken care of our obligations.”
Vysk has spent “tens of millions of dollars” developing the QS1 Quantum Security case in San Antonio and is now manufacturing cases in Asia and selling them for the iPhone 6, 7 and 8, Cocchia said. Vysk doesn’t make cases for Android phones.
The company’s customers are governments and businesses, but Cocchia said he can’t publicly identify any because of confidentiality agreements. On Friday, he emailed to say the secretary of defense of an unnamed major U.S. ally had certified Vysk’s case “break proof ” and would be purchasing it for troops and national defense.
“Vysk is extremely close to really taking off,” Cocchia said.
The company employs more than 25 people, with 15 to 18 in San Antonio, Cocchia said. But some former employees contend the staff now numbers no more than a handful.
Three former Vysk employees and a contractor expressed skepticism that the company is doing much. They base their doubts on Vysk’s inability to pay them and others.
The Texas Workforce Commission has received eight wage claims against Vysk since the beginning of the year, agency spokeswoman Lisa Givens said in an email. The state has filed a lien against Vysk for half of the claims, which total almost
$8,100. An investigation is pending on the four remaining claims that total about $86,000.
A former Vysk contract worker said he’s owed more than $10,000 in back pay. He did not want to be identified for fear that Cocchia would take him to court.
Cocchia, 53, vowed in a phone interview “to go after” any exemployees who violate their nondisclosure agreement. He called some ex-employees “disgruntled.”
“There are a couple that are just off the reservation that we let go because they’re off the reservation,” he said.
Cocchia added, “Do we have a few employees who are owed money? Yes, absolutely. I don’t deny it. It’s a choice we had to take to make sure we got production done and out.”
Mechanical engineer David Santy worked at Vysk for six months before he said he was let go in November. About two months later, he said he learned the group health insurance coverage he had at Vysk lapsed in September even though the company continued to collect premiums from him.
Santy said he is on the hook for $83,000 in medical bills incurred in October when his wife had knee surgery. He said he has an open case with the U.S. Department of Labor. Agency spokeswoman Chauntra Rideaux said in an email she could not provide “any information on investigations that may be underway.”
Santy has sought to “cause havoc” since “his firing for poor work performance,” Cocchia responded. “Vysk has fulfilled all of its obligations to Mr. Santy.” Santy disputed that he was fired and said he only became “disgruntled” when he got stuck with the medical bills.
Meanwhile, Cocchia said
Vysk has paid more than $1 million on about $2.2 million in delinquent payroll taxes owed to the IRS. As proof that payments have been made, he provided a partially redacted spread sheet that he said came from Vysk’s law firm. The Express-News asked for IRS account transcripts, but he did not provide them.
No lien releases have been recorded in public records. In fact, additional payroll tax liens covering the first three quarters of last year and totaling about $72,500 have been filed against Vysk since December. Cocchia said the new liens are actually “filing deadline penalties” caused by a “glitch with our payroll service.” It’s contesting those liens, he added.
The cash constraints have surfaced even though Vysk had received a capital infusion from two investment groups — an affiliate of Mexico City conglomerate Grupo Salinas and Dubai’s Linarus FZE, according to three people who spoke to the Express-News last year. None wanted to be identified because the terms of the deal were confidential.
The groups invested a little more than $20 million, but that included money previously contributed. Danield McCosh, a Grupo Salinas spokesman, said in an email he had no information to share on Vysk.
Cocchia had cited confidentiality agreements in declining to discuss the source of the money but said proceeds went to developing the privacy case.
Vysk has had to play catch-up each time Apple has rolled out a new iPhone model, Cocchia conceded. Now, though, Vysk has gone to “something that’s modular,” allowing it to quickly adapt cases to new iPhone models, he said.
“We’ve now streamlined our process, which is what we’ve invested in,” he said.
The case is a product for its times, Cocchia added.
“Privacy is a very important issue and you see companies scrambling each day to try to mitigate the damage caused by it,” he said. “Vysk helps solve the problem.”
Vysk investor Izzat Hanna of Michigan last month sued the company and Cocchia, charging that statements and documents given to him to get him to invest “turned out to be false.” Hanna bought almost 343,000 Vysk shares in 2015.
Marc Whyte, Hanna’s San Antonio lawyer, said the false statements and documents relate to the “financial viability and the financial status of the company, in addition to (its) future prospects.”
Vysk agreed to pay Hanna $500,000 to buy back his shares in 2016, but failed to follow through, his suit alleges. Vysk then offered to pay him the $500,000 plus 150,000 Vysk shares by Jan. 31, 2017. Vysk never paid, Hanna alleges, so he sued for breach of contract.
It’s one of a handful of lawsuits that have been filed against Vysk this year:
Iceman Softworks, a company based near San Francisco that was hired by Vysk to develop a suite of apps to work with the privacy case, sued Vysk in March to collect at least $186,877.
Move Logistics Inc., the moving company that moved Vysk from 200 E. Basse Road near the Alamo Quarry Market to subleased space in downtown’s Bank of America Plaza last year, says in a May lawsuit it’s owed about $12,300.
Former Vysk COO Eli Porat, who also was a director, sued the company in California for unpaid wages. He obtained a more than $80,000 judgment against Vysk, court records show.
Vysk’s former sales executive in Latin America, Santiago Reyes Retana, alleges in a lawsuit filed Tuesday in San Antonio that he helped bring in investors and customers but never got paid. He accuses Vysk and Cocchia of fraud and seeks at least $200,000 in damages.
Cocchia said the lawsuits are either being settled or contested. Vysk paid Iceman more than $1 million and disputes that anything else is owed, he said.
“The others are either small or frivolous suits, which unfortunately happens when you have a commodity that is as valuable as Vysk has,” he said. He added he has “serious concerns about the truthfulness of the allegations” made by Reyes Retana.
Other court judgments against Vysk include one for $475,000 obtained last year by a company affiliated with Notre Dame University. Vysk had entered into a contract to have its logo appear on the headsets worn by the school’s football coaches during games, according to Gregory Sapire, an Austin attorney representing Play by Play Sports, which does business as Notre Dame Sports Properties.
There’s a common theme among some of the court matters. Some of the plaintiffs have been unable to locate Vysk or Cocchia to serve the lawsuits or collect on the judgments. In hopes of collecting on Notre Dame’s judgment, Sapire said a Bexar County constable went to the Basse Road and the Bank of America Plaza addresses in February. Vysk was not at either location.
Vysk had vacated the subleased space on the 19th floor of the Bank of America Plaza for a Monte Vista house owned by a company controlled by Cocchia.
“We were running (Vysk) for a couple of weeks out of that address while we transitioned from one place to the other,” Cocchia acknowledged. “That was a very big location, over 6,000 square feet.”
Nevertheless, in January an anonymous caller lodged a complaint with the city’s 311 call center about a business operating at the Cocchia property in the 200 block of West Mulberry Avenue, a tony residential street lined with homes valued at more than half a million dollars.
The city sent a letter to the property owner informing it that zoning doesn’t permit a business to operate from the address, according to city spokeswoman Ximena CopaHiggins. A code enforcement officer visited the property in January and April but didn’t find anything. No further action was taken, she said.
Process servers for Iceman Softworks and Move Logistics tried to serve their lawsuits on Cocchia at that address, too, but had no luck, court documents indicate.
The Mulberry house was posted for the June foreclosure auction but Cocchia’s company sold it May 11, property records show.
Last month, Vysk’s website still listed the company’s headquarters as in the Bank of America Plaza. The phone number on the site was a nonworking number. Cocchia said he had been too busy to update the website.
A new, toll-free number has since been posted on the website, but there’s no address listed now. Cocchia answered when a reporter called the phone number.
“When I’m on the road or someone’s out to lunch, or something like that, we have it ring to different people,” he explained.
As for where Vysk is operating now, Cocchia would only say the company is in Schertz. He will reveal Vysk’s new location on Northeast Loop 410 “upon approval” of the lease, he said.
“Creating such a powerful technology does not come without its hurdles, but Vysk has succeeded in developing this technology and is now manufacturing it, despite the obstacles we have, as a group, collectively faced,” he said. “This amazing group of people has done what others could not.
This is what should be the focus.”