Dot1web CEO says company strong, employees being paid back

INCLINE VILLAGE -- Bob DeMaio, president and CEO of Dot1web, defended his company this week against claims of shaky finances and unfair labor practices.

The Incline Village dotcom company was evicted from its offices Friday for not paying rent, and still owes wages to many workers it laid off.

The Nevada Labor Commission said 11 unpaid wage cases had been opened by employees against Dot1web and that several more had been filed but not yet opened.

"They come in continuously," said Lois Kelly of the Office of the Labor Commissioner. The office must investigate the truthfulness of worker claims before it opens cases.

Layoffs that came just before Christmas added to the hardship of some employees. DeMaio said the layoffs were necessary to guarantee Dot1web's survival.

"I have a responsibility to the company shareholders," he said. "The cuts were made across the board, in technical, management and customer services."

DeMaio said he explained the situation to company managers, and he assumed they had told the laid-off employees why the step was necessary.

"It was always my intention to hire back as many as I could once the company got back on its feet," DeMaio said.

Some employees say they were never told this when they were laid off.

"It's a horrible thing to lay off all those people, especially just before Christmas," DeMaio said. "I'm just sorry I had to do it. But when a bank takes control of your account for three weeks, it can cause problems."

Despite these appearances, he says the future is bright.

"Our balance sheet is strong," DeMaio said. "We didn't file for Chapter 11 (bankruptcy protection), and never intended to."

He said the company, which had plans to open a customer-service center in Carson City, will stay in Incline Village and has several prospects for new office space.

DeMaio said the recent difficulties arose from problems with the company's bank, not because of financial instabilities.

"I'm not denying that there was an issue," he said. "I'm denying the cause of the issue."

DeMaio said information he obtained from Nevada Security Bank proves he had sufficient funds to cover all the checks the bank returned for insufficient funds.

"I'm leaning toward a lawsuit (against the bank), " DeMaio said. "But all I really want is an apology and repayment of fees incurred by those whose had checks bounce as a result of this."

DeMaio said the difficulties with the bank started a week after the company account was opened. He contends that the problem appears to have been caused by employees who wanted cash for their paychecks, which apparently caused a shortage of cash at the Incline Village branch.

The bank would not comment on DeMaio's comments or accounts, citing federal banking regulations.

DeMaio bristled when asked to comment on his expensive yellow Lambroghini sports car with the vanity plate, "DOT1WEB." Some employees said he should have sold it to help pay wages.

"I'm not denying that I own it," DeMaio said. "But I've loaned a lot of my personal wealth into the companies to keep them going."

He said much of his personal wealth, which totals more than $1 million, had been poured into Dot1web and its subsidiaries during the last three years to keep them going. He said most of his worth is from private stock sales in his companies.

Adding to the financial strain, he said, is the large sum spent prosecuting a suit against a group of former employees and a law firm that he says conspired to ruin his companies. He said he intends to see it through to a jury trial to recover expenses totaling more than $250,000.

Laid-off employees left out in the cold

by Merry Thomas, Appeal News Service

INCLINE VILLAGE -- Former Dot1web employees say they could better accept their layoffs if company officials had been straightforward.

A group of about 10 former employees went to the company's Incline Village office Friday hoping to pick up wages owed them.

When they got to the building at 926 Incline Way about noon, however, they found a locked door with an eviction notice taped to it.

"The employees were unaware this was going to happen so they were caught off-guard," said Washoe County Constable Joe Kubo, who presided over the eviction earlier that day ordered by the 2nd District Court in Reno.

"We met with (Dot1web president and CEO) Bob DeMaio, and he was extremely cooperative," Kubo added.

The eviction resulted from nonpayment of rent to the building's owner, Bear Ridge Developers.

Former receptionist Lee Ziegler said she called the office early Friday morning before the eviction, and a new receptionist told her no one in management was there.

"This is the fourth time they've put off issuing paychecks," said Gary White, a lead shift supervisor in the customer service department.

Employees were promised paychecks for Dec. 24, but the checks were postponed three times. "Now, it's indefinitely," White said.

Matt Reiner, a supervisor on the graveyard shift, said Dot1web owes him $2,800, plus his final paycheck.

Former employees said in some cases, company shares were offered in lieu of paychecks.

Tracie Ferreira said she was called the morning of Dec. 16 and told not to come to work because of the snow.

"Later on they called and said I was laid off," said the single parent of two who also has health problems.

"The most irritating thing is the dishonesty," White said. He said employees received a letter from Chief Financial Officer Colin Quinn that said their checks were not good.

White added that Lowestbids.com, a partner company, claimed to have lost employees' paychecks about 1 1/2 years ago.

"When you talk to Bob (DeMaio), everything's a smoke cover," Ferreira said.