You've probably never heard of Eren Niazi, but you've certainly heard of his friends.
Anyone who has ever met Niazi has heard the stories about them. They include the two most important Steves in Silicon Valley: Apple co-founders Steve Jobs and Steve Wozniak. Jobs, the inventor of the iPhone, took the young Niazi under his wing and made time for him just one week before his death from cancer in 2011. Facebook founder Mark Zuckerberg is also a friend; he invited Niazi to accompany him to the Nasdaq on the day he rang the opening bell to mark Facebook's IPO and was devastated when Niazi told him he couldn't be there.
If you're a football fan, you also know of Niazi's business partner, Patrick Willis, the All-Pro linebacker who suddenly and shockingly left the San Francisco 49ers in 2015 to pursue a career in tech working alongside Niazi at his startup, Open Source Storage. Willis said working with Niazi at Open Source was a bigger honor than anything he had accomplished on the field.
San Francisco 49er Patrick Willis during 2013's Super Bowl XLVII.
CREDIT: Getty Images
You've probably never heard of Niazi, but you know the companies he's helped build. He helped code the websites of companies like Facebook and eBay, and his company, Open Source Storage, counted as clients a who's who of tech companies, ranging from Yahoo to Sony to AOL.
"I only like to take tough jobs," Niazi said in a promotional video from 2012. "The harder the job, the most demanding applications, the newest of innovation is what I've always been involved with, and that's what I love and have a passion for."
These were stories Niazi told, anyway. Those who spent enough time around him often found they didn't check out, but not until too late.
Niazi is a skinny man with black hair who typically wears thin, frameless glasses and flashy clothes. Niazi was known for his charismatic and engaging manner. He charmed the women around him and impressed the men he worked with. He could connect with anyone and gain their trust.
It didn't hurt that Niazi often mentioned his family's vast fortune. With his flashy clothes, his shining jewelry, the huge checks he wrote, his roaring BMWs and Ferraris, and his imposing NFL sidekick, Niazi had the accessories to match the image he sought to project.
He cut an unlikely figure, to be sure, but anything is possible in Silicon Valley. It's a land of meritocracy, those who work there always say, where the only thing that matters is your talent, not your pedigree. In this world, investors and executives don't care where you came from; they care only where you're going. They have money to spend, and they want to bet on the next big thing. The shorter the resume, the fresher the ideas might be.
Who would question Niazi's bona fides? Who even cared?
Most didn't. Not until September 29, when Niazi was arrested for shooting up a home he was living in, piercing multiple bullets through a football helmet worn in a Super Bowl and putting the life of a child in danger. That's when Willis, the owner of that helmet, began to question Niazi, the authenticity of his larger-than-life tales, and what the tech executive had done with his millions.
Earlier this month, a lawsuit filed in Santa Clara County Superior Court on Willis's behalf. The lawsuit accuses Niazi of fraud and breach of fiduciary duty. The suit seeks more than $2 million in disputed real estate and yet-to-be-determined monetary damages. A second, previously unreported lawsuit was filed by Willis farther south, in the Superior Court of San Benito County. The lawsuit raises the same allegations and seeks at least $1 million in disputed real estate damages.
To more than a few people in Niazi's past, what he did to Willis was not as surprising as much as it was the culmination of a career, a career that was not spent coding and cutting business deals, but rather, conning, scamming, bilking, over-charging, shortchanging, and lying to those around him. At least two former business associates have gone to the FBI with information about Niazi, although the agency can neither confirm nor deny the existence of an investigation.
These people knew Niazi was not what he made himself out to be, not remotely. But even they didn't know the full extent of what he was capable of.
Now that they know, they are afraid. A number of sources Inc. approached for this story agreed to speak only on condition of anonymity or declined to speak altogether, citing the fear that Niazi would seek to retaliate after his release from jail, which took place Thursday.
The idea that he would go after people he once called friends is all too plausible, says one such source. "He has no feeling for any of these people. There's no guilt or remorse there."
Heir to the turtleneck
The article told of an ambitious entrepreneur who had founded Open Source Storage in 2001, when he was in his mid-20s. The young company's customers ranged from Friendster to Facebook and NASA, the article claimed. With Facebook alone, "Open Source Storage's efforts for the social media giant fetched $5.5 billion in revenue for open-source storage and commodity hardware," the article said.
It was a company on the fast track to success, but its run stalled as the Great Recession arrived, the article said. "Investors fought to control the enterprise, yet it went bankrupt. Niazi was out."
But like Jobs, his mentor, Niazi did not give up on his company. In 2013, he relaunched Open Source Storage, and quickly, the second iteration of the firm picked up where the original had left off. "Since its re-entry last year, the Silicon Valley-based company has sold 50 million shares to private investors (with no valuation disclosed), launched 12 new product lines, and exceeded its revenue targets in six months," the article said.
The story described a company with all the trappings of Silicon Valley success. It was exactly the kind of company that would spark the interest of an NFL superstar living in the tech capital of the world and nearing the end of his football career.
Inseparable partners
Willis and Niazi met each other sometime in late 2014, according to Willis's lawsuits and public accounts previously given by both individuals
in the press. The two met by chance while both were living in Santana Row, a trendy shopping center and residential complex in San Jose.
Whenever he met anyone, Niazi was quick to reel off his outsize accomplishments as a tech entrepreneur and scene-maker. To a football player with no experience in business or tech, those stories were intriguing. "Patrick was easy," the source said. "He was looking for someone to mentor him in business as he prepared to walk away from football."
The two neighbors quickly became friends, and after just a few months of knowing each other, they also became business partners.
From left: Gracie Gato, Patrick Willis, another Open Source Storage employee, and Eren Niazi.
CREDIT: Courtesy Anonymous
Willis joined the company in early 2015, within weeks of his retirement from football. During his decorated career with the San Francisco 49ers, Willis had racked up 950 tackles, been named the Defensive Rookie of the Year, and been selected to the Pro Bowl in seven of his eight seasons in the NFL. His highest accomplishment was helping lead the 49ers to a Super Bowl appearance. Yet all that paled next to the pride he felt upon joining Open Source Storage, Willis said in an interview in September
with CNBC.
Willis came in as an investor of Open Source Storage, a board member of the company, and its new executive vice president for partnerships. In his role, Willis was in charge of interviewing job candidates,
Mashable reported. And as he had been by his teammates in football, Willis was well liked by his new colleagues.
"Patrick is the greatest guy I've met," said Gracie Gato, an employee of Open Source Storage from March until May. "He's the sweetest guy in the world."
Getting to know Willis, however, was not easy. Anytime Willis was in the office, Niazi kept the retired defender isolated from everyone else. When someone addressed Willis, Niazi and he would whisper in each other's ears before Niazi finally spoke for his business partner.
Willis rarely left Niazi's sight. Where one went so did the other. The two friends and business partners even had matching white gold and blue-jeweled rings on their fingers. Niazi showed off his new friend to everyone he knew as avidly as he had retailed his anecdotes about Zuckerberg and Jobs -- albeit from a distance.
"The way Eren treated Patrick was sort of like a pet. He would parade him around like 'Look at me, I'm with a celebrity,' " Gato said. "It was truly disgusting. It was disgusting. He exploited the hell out of Patrick."
Eventually, word of Willis's joining Open Source Storage reached the tech press. On May 18,
Mashable published a glowing profile of Willis and the company. The story went viral and dozens more articles were written about the football legend's second act in Silicon Valley. Just one day later, word of the story reached another, more serious entity: the Federal Bureau of Investigation.
The whistleblower
After being hired as an engineer in March and working at Open Source Storage for more than two months, Gato had become suspicious of her company. In all of that time, she had not written a single line of code. And Niazi treated everyone around her, with the exception of Willis, with an unpredictable temperament. He would hire and fire employees on a whim, several sources said, and he was just as likely to cut your salary as he was to give you a raise or promotion.
Gato herself had experienced that erratic behavior. Shortly after being hired, she was promoted (with no raise in salary) to director of customer support, but she never did anything. There were no customers to support because there was no product to sell. Never mind the 12 product lines Niazi claimed in his interview with
TheStreet.
"He wasn't interested in making money or getting any type of sales whatsoever. It seemed like he was riding out whatever money he was on," Gato said. "It seemed like he just kept us on the payroll to look legit."
Suspicious, Gato set up a conference call, asking a friend to ask her colleagues basic sales questions about Open Source Storage's services. She suspected Open Source Storage wasn't legit, but she needed to find out, Gato said.
"When [my friend] asked them, 'What exactly do you guys do?' everybody was stuttering over themselves," Gato recalls. "That's when I found out this whole thing was a lie."
As far as Gato could gather, Open Source Storage's only source of income appeared to be Willis's NFL fortune. Gato quit on May 6 and never cashed her final check.
"I knew my paycheck came from Patrick. I refused to accept another dollar," Gato said. "I knew his fate, another broke NFL player -- I couldn't deal with that."
While the rest of the world was excited to see how Willis would do in the tech industry, Gato grew worried for the NFL star.
"Everything about Eren Niazi is fake," Gato wrote in a note sent to the FBI. "He is a Venture Capitalist [sic] worst nightmare. He defaults on debts, never pays them. He is now using a retired NFL player's money, and he has no product."
Along with the FBI, she reached out to news outlets. No one heeded Gato's warnings. She gave up. For months, she stopped trying to warn people until November 4, the day she saw the Inc. report about Willis's lawsuit, at which point she took to Twitter to contact this reporter.
Gato, however, was not the first person to contact the FBI about Niazi. In 2015, Glenn Carnahan had done the same.
'He could sell snow to an Eskimo'
Carnahan is the chief financial officer at Ridgeline Entertainment, a TV production company based in Auburn, California. Carnahan, along with his business partner Doug Stanley, had come up with an idea to create a TV channel based right in Facebook's News Feed.
As the two scouted for a development firm that could build out their vision, they were referred to Dodecahedron, a company owned by Niazi. As he did with everyone he met, Niazi quickly swept the pair off their feet. He told them about the supposedly pivotal role he'd played in Facebook's early days: Years earlier, before the company went public, Niazi had helped Mark Zuckerberg get the social network back online after his own engineers messed up its code, he said.
Niazi also promised to introduce Carnahan and Stanley to Wozniak, the guy who created the first Apple computers. With all of his connections, Niazi struck them as just the right guy to build out Smackdab, the name they gave to their idea.
"He could just sell snow to an Eskimo," said one source who worked for Niazi at one of his companies in the early 2010s. "He had a way with people of connecting with them and getting them to believe things."
Ridgeline Entertainment entered into an agreement with Dodecahedron. Niazi's company would be responsible for putting together Smackdab, take care of the hosting, file pertinent patents, and deliver subsequent updates for the site.
"There was flattery," Carnahan said. "We were a priority to him and that made us feel better and trust him."
Dodecahedron delivered the site. In a promotional video from 2012, Stanley can be seen claiming his company hired "the chief architect of Facebook, Eren Niazi," to oversee its creation.
"I've helped architect some of the world's largest websites, including Facebook, Shutterfly, eBay," Niazi says
in the video.
But after the release of the website, Niazi's firm failed to provide the promised updates, Carnahan said. As time passed, the relationship became strained. Ridgeline wanted its updates, and as Carnahan looked more closely into the matter, he started seeing red flags he'd missed earlier.
One early sign was the hosting. Dodecahedron was charging Ridgeline $10,000 a month to host Smackdab, but after delving into the specifics, Carnahan found the hosting provider Niazi was using charged just $1,500 a month.
More alarming was Niazi's handling of the patent filing. Rather than list Carnahan and Stanley as the applicants, Niazi put his own name down, a copy of the document dated July 2012 shows. Carnahan was able to catch and correct the filing after a meeting with the patent lawyer that did not involve Niazi.
"He tried to make himself the owner of the intellectual property," Carnahan said.
Niazi had kept himself at the center of information flow to mislead them and charge inflated prices, and he had written the contract in a loose enough way to justify his actions, Carnahan said.
"He bled us in a very deliberate manner, and he managed it very well by shielding us from the people we should've been talking to," Carnahan said. "He preyed on our ignorance."
All in all, Dodecahedron charged Ridgeline almost $700,000 for its services. "We overpaid Eren by $500,000. That's a lot of content that we could've developed with that," said Carnahan, noting that although Ridgeline continues to operate, it is a shell of what it could have been. "We could've done a lot."
Carnahan wanted to sue, but Niazi had already wasted so much of their money that the partners chose not to squander their remaining resources on a distracting lawsuit. Instead, he put together a thick folder and went to the FBI's Sacramento office, Carnahan said.
The FBI said it can neither confirm nor deny the existence of an investigation. However, many of the companies and people Niazi claims to have worked with deny any involvement. Facebook and eBay both said they have never been clients of Niazi or Open Source Storage. As to whether Niazi and Zuckerberg ever had the friendship Niazi claimed, a Facebook spokesperson did not respond to a request for comment. Wozniak, however, denies ever having met Niazi. "I do not know, nor know of, this person," he told Inc. via email.
Family feud
Another company Niazi claimed to have worked with is Yahoo. Niazi brought up Yahoo when he met with Swee and Ozkan Niazi, his aunt and uncle, one day in April 2007, according to court documents from 2009.
At the time, Niazi was still running the original Open Source Storage. Niazi told his aunt and uncle of the "rapid growth" the company was experiencing but he said that it was "short of cash" as it sought to fill a "significant order from Yahoo." Niazi needed their help in the form of a $200,000 loan.
Niazi promised Swee and Ozkan that he would quickly return them their money. The next day, Niazi stopped by his uncle's office to pick up the check. Weeks and then months passed without Ozkan and Swee getting any of their money back. Finally, on September 4, Niazi paid them a portion of their loan, a check for $30,000 listed as "loan-partial." Three weeks later, Ozkan contacted Niazi.
Eren Niazi.
CREDIT: Courtesy Anonymous
"Hello Eren, were you able to get that line of credit?" asked Ozkan in an email. "I am MAXed out on my credit cards. I need the funds back ASAP."
"Hello Uncle, I will call you tomorrow," responded Niazi later that day. "I am trying my best and do not have any credit lines available to me......"
For more than two years, Ozkan haggled with Niazi seeking the remainder of the loan. In the meantime, Open Source Storage filed for bankruptcy. The company listed about $1.5 million in assets and nearly $6 million in liabilities, according to bankruptcy filings from 2007.
Finally on December 7, 2009, Ozkan and Swee filed a formal lawsuit against Niazi. Emails included as evidence in that lawsuit showed that Open Source Storage never made a sale to Yahoo; the Sunnyvale company did take delivery of some OSS servers but returned them without making a purchase.
Like Willis would years later, the couple sued their nephew for breach of contract and securities fraud. They sought damages of $170,000 plus interest and legal fees. At the trial, Niazi alleged that the transaction was a business deal between Ozkan and OSS, not a personal loan.
Ozkan and Swee won their case and later won a challenge brought forth by Niazi. Collecting their money, though, was a different story.
Reached by phone in November, Swee said she was not able to speak as she and her husband were still going through legal proceedings. This reporter asked if Niazi had yet to pay back the $200,000 he had borrowed from his relatives. Quickly, before hanging up, Swee said no.
A trail of destruction
The lawsuits from Willis accuse Niazi of misleading the football player into investing his money into companies registered in Nevada. The plan was for Willis and Niazi to grow their fortunes as co-investors, combining their assets. The lawsuits allege that while Willis upheld his part of the agreement, Niazi did not.
Willis is now seeking full ownership of six properties that Niazi purchased throughout Santa Clara and San Benito via the Nevada companies. Some of the properties were purchased by companies that name both Willis and Niazi as partners. One of the properties -- a stately house in Hollister, worth more than $1 million, according to the county assessment -- was purchased through a Nevada business that lists Niazi as the sole member, one of the lawsuits alleges.
"Niazi made that property his home, representing that he owned it and purchased it with his own money," the San Benito lawsuit claims. "Of course, he never paid Plaintiff anything in rent for the months he lived there."
Aside from the $3 million in property disputes, Willis's lawyers said they do not yet have exact figures for the monetary damages they will be seeking. One of Willis's attorneys told Inc. they have hired forensic accountants to investigate but anticipate the damages sought at trial will be significant. One source who worked with Niazi in the past year said the amount may be between $13 and $14 million.
Earlier this week, Niazi retained a new attorney, who addressed the football player's allegations against her client on Tuesday. "I'm bothered by the idea that there are people who are saying and speaking ill of some of his business dealings," said Katy Young, a partner at Ad Astra Law Group.
Young met with Niazi for the first time on Tuesday and spoke with him for a number of hours. After the meeting, Young said that she reached out to the lawyers who are representing Willis.
"Eren is interested in coming to an amicable resolution as possible," Young said. "He genuinely cares for Patrick Willis and certainly never meant to harm him. It's a delicate case because there is a friendship that hangs in the balance. Unclear whether they'll ever be able to rectify that."
As to the claims made in Willis's lawsuit, Young said, "Mr. Willis's complaint is very general in its fraud allegation, and the rule regarding pleading fraud in a civil context is that fraud has to be pled with particularity. The plaintiff, Mr. Willis in this case, would have to articulate the who, what, when, why and how of the alleged defrauding that took place."
Shooting spree
Eren Niazi appears in court at San Benito County for his criminal case.
CREDIT: Courtesy Anonymous
The incident that resulted in Niazi's jailing took place at a house located 50 miles south of San Jose, in a tiny California town of 35,000 people called Hollister. It is a huge, eight-bedroom home with a brick driveway the length of a football field. The home sits on a vast, 16-acre lot. There is a large American flag that waves in front of the home's four-pillared entrance. The mansion is nicknamed the White House, and it is unlike any of the small homes that surround it. It's one of the properties under dispute in Willis's lawsuit, the one Niazi allegedly bought with Willis's money while listing himself as sole owner.
Residing in the house with Niazi was a woman who has subsequently obtained an order of protection against him from San Benito Superior Court. (Another woman has also obtained such an order.) The woman's young child was with her in the house that night as well, according to a source who has spoken with her subsequently.
That night, Niazi permitted a child "to suffer and to be inflicted with unjustifiable physical pain and mental suffering," according to the case brought against him on behalf of the state of California. He used a Smith and Wesson 10mm handgun, and he "willfully and unlawfully discharged a firearm in a grossly negligent manner which could result in injury and death to a person," the documents read.
"He just freaked out," said the source who spoke with the woman who was in the house with Niazi that night.
"He grabbed his gun and then started shooting holes in the wall like a commando up and down the hallways," adds the source, who visited the house following the shooting. The source noted the black scuffmarks and dark bullet holes on the walls that were left by Niazi and were still visible a few days after the shooting.
Niazi took several shots at the walls and out of the windows of the home. He then went into a room in the home where Willis kept several bits of memorabilia from his eight-year NFL career. Among the articles was a 49ers helmet that the source said he believes is the same one worn by Willis during his Super Bowl XLVII appearance against the Baltimore Ravens in 2013.
"He killed that helmet. There's several bullet holes in it," said the source. "It's not replaceable."
Escape plan
On Thursday, November 17, Niazi was released from jail after pleading no contest to gross and negligent use of a firearm and agreeing to post $50,000 in bail. The other charge against him, child endangerment with use of a firearm, was dismissed. Under the conditions of his release, Niazi must take medications for bipolar disorder and cannot possess a firearm.
Thomas Worthington of the Worthington Law Centre, the attorney representing Niazi in his criminal case, said his client had had a mental breakdown. Earlier that night, Niazi had been taken to the hospital on a so-called 5150, an involuntary psychiatric hold. The shooting spree occurred only after Niazi was released, Worthington said.
"I'm convinced from everything that I reviewed that he really had no intent to harm anyone whatsoever, on that particular day," said Worthington.
"What he thought he was doing was protecting his family, and in my opinion, it was a product of his impaired mental functioning at the time," Worthington said. Worthington said he has objected to findings that Niazi is incompetent to stand trial. Niazi has the right to a jury trial, and that is what they have demanded, Worthington said. Niazi's sentencing is set for December 15, and felony probation has been granted, the lawyer said.
"Going back further, these issues about investments and whether he intentionally cheated any investors -- from what I have learned about this man is that he is a good person. There is no record that he has ever been in trouble in his life in a criminal way," Worthington said.
"I believe that as we continue to explore this we will learn that his mental condition contributed to the decisions he made and the actions that he took probably in all those years," Worthington said. "I do not think that he intentionally bilked people of money."
Given Niazi's long history of manipulation and deceit, however, those around him are unwilling to write off all of his actions to factors beyond his control.
"He got found out, and he didn't have a way out," said a former colleague who has known Niazi for close to a decade. "The escape plan was to go nuts. But he's not nuts. He's a very smart man."
