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The hazards of outsourcing/homeshoring

I cannot attest to the veracity of this story but it looks like an interesting one. This got my attention because Marc did an interview with the CEO of the company for PTB months ago. Here’s how I understood what happened in a small SEO outsourcing outfit (HarvestSEO) based in Cagayan de Oro (CDO):

i) A businessman in the US (Michael Turner) hired someone from the Philippines to run an outsourcing company of around 40 people.

ii) The Filipina partner (Marisyl Castillon) runs everything as the General Manager under the guidance of the American businessman. The American gets all payments (of undisclosed amounts) from clients and only remits a portion thereof to the Philippines.

iii) Both had a fight with each other (The Filipina claimed to have been physically and verbally abused) while on a US trip for SES (Search Engine Strategies) Conference. The Filipina reports the incident to the police sought the help of the Philippine Emabassy to get back home.

iv) The American businessman emails the team back in CDO that he is immediately terminating his affiliation with the company in the Philippines. The team, in desperation, emails their existing clients that the CEO has reneged on his position and claims the company is still in operation and asks them to remit payments directly to them.

v) The CEO files for RICO Act (Racketeer Influenced and Corrupt Organizations) with the US courts and alleges that some members of the CDO team are terrorists — specifically the Filipina and her dad along with the finance guy.

The best way to really get the meat of the story is to read this document (PDF) about what really happened from both sides. I can partly relate to this because at one time in my career, I was in a similar homeshoring activity.

Though we can’t really say who’s telling the truth about what, I always tend to side with the aggrieved party — it’s the one who is affected the worst that’s usually the victim.

Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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15 Responses

  1. The Ca t says:

    a mestizo type of outsourcing.

    the lady claimed that she is the owner of the firm in the philippines and the Caucasian is merely a contractor for their firm. What is obvious is that the lady is just a dummy which always happen when some unscrupolous people in this side of the globe advertise for wanted FIlipina for business or life partnership.

    A real outsourcing operation is between two firms, one abroad and the other in the Philippines.

    The contract stipulates the length of the contracted services for example two years, the scope of responsibility and the price of the services.

    The company in the Philippines quote a price per hour that is enough to cover the salaries and the overhead plus the target profit margin.

    It should also cover for the recovery of the capital expenditure which include the acquisition of the necessary equipment for the said contract.

    The contract also stipulates the manner of payment and the bank to which payments may be remitted.

    From the deposition of the defendant, I can gauge that this is more of personal business between the two that went awry at the expense of the employees.

    It cannot be categorized under outsourcing. It is more like a dummy business thing where the dummy is usually a naive and clueless Filipina.

  2. The Ca t says:

    Why the foreigners resort to dummy operation of outsourcing.

    1. as a partner in the Philippines he will be subjected to income tax from outside the Us
    2. as a contractor, he merely pays the invoices sent to
    him to the US which is covered under the business expenses.
    3. he can deduct the acquisition of computers as business expense.

    from the internal operation side, he is the CEO but businesswise, he is not in anyway connected with the
    local company.

    HarvestSEOphils. is a single proprietorship wholly-owned by the lady. I do not see anything that shows partnership.

    The withdrawal of the American from the philippine operation is merely expressed in terms of business position which could be interpreted as contractor/consultant but since there is no contract, then it is just the latter.

    Haay buhay and what is this Filipino aspiring to become one of the owners. Puwede bang lecturan yan sa mga types of business organization. Hmpp maisulat nga ito sa aking blog na Business Recipes. hirap sa comment box.

  3. yuga says:

    hahaha! thanks for the insight. Yeah blog mo na lang, haba na comments mo. :)

  4. The Ca t says:

    o isa pang hirit yuga for fyi of the ladies.
    here if you have superior-subordinate relationship or employer-employee relationship, the superior cannot touch the subordinate, man or woman without the risk of being sued for sexual harrassment.

    Hawak ng buhok yan ha. Buhok sa ulo hindi sa baba, ekkk.

    Eh ito bugbugan nangyari when it could be just be done in one simple sentence ala Donald Trump, you’re fired. ahehehek

  5. jun says:

    the perils of business….

    Any good success stories of how things were done right? It can also serve as a plug for that company/individual….

  6. Migs says:

    I have not read a single document. I just checked back on Marc’s interview and it says… they met in filipinofriendfinder? Uhoh…

  7. Jason says:

    may post dito ang kano: http://www.michaelturner.us/marisyl-syl-castillon/ . Nagbabayad kaya ng income tax yung Kano sa ngayon? sa wari ko nag ooperate pa rin daw yong harvestseo dito sa Pilipinas, basahin nyo yong blog ng kano.

  8. William says:

    Having known both Michael and Marisyl personally I can honestly tell you that Marisyl without doubt is the true victim here. I have been close to the entire situation. Mr Turner has proved to me and others on several occasions to be a liar and a manipulator. I have never worked for him nor Miss Castillon but know both of thier characters very well. I do not hold a grudge against either of them I am just offering my viewpoint from a independent point of view.
    Just because this man is a American, people want to believe him or accomodate him. DON`T BE FOOLED!! Believe me when I tell you THIS IS NOT A RICH MAN ! He is a man with a very, very questionable background. Have you ever wondered why he lives here in the Philippines rather then in the USA? Is he hiding from something in the USA ? I have discovered the truth and that info will all come out in time.
    Can you really trust a man who can`t even be faithful to his own wife ?
    Miss Castillon, If you ever read this blog I sympathize with you. You have truly associated yourself with a very dishonest man.

  9. SEC. 11.
    No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.

  10. Sean Baker says:

    Yes, this Michael Alan Turner guy is in another business mess… still in CDO… You’d think the SEO community in that city would have learned their lesson by now. It’s so easy for Filipinos to get blindsided by foreigners when it comes to business. It’s not that all foreigner businessmen are cheaters and bullies, but when a true bully does come along, the naive and trusting party always gets a heavy blow.

    The present conflict is between Turner and an Agustin Rodano. The issue with Ms. Castillon is still mentioned, among others. I tried giving Turner the benefit of the doubt, but he seriously seems to be a serial bully. Personally, I applaud the latter for standing up for himself.

    You can read more about this issue here: http://michaelalanturner.wordpress.com/2012/06/09/a-warning-to-the-general-public/

  11. HarvestSEO says:

    “I am rude, and quite unfinished. Blunt to a fault. For some reason I lack the discretion to use the manners I was taught. For those who I will offend, you probably had it coming. For those that simply find me offensive, get your own blog.” – MT

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