Multiple AGs speak out against Leasing Company Fraud!

Note this Memorandum of Law placed out in the public domain listing our wonderful leasing friends and how they scam small Mom & Pops.

A Judge in Nebraska, the Federal Trade Commission, Vermont’s AG and Pennsylvania’s AG all speak up against this practice of fraudulent business practices.

Scamming Leasing Companies:  Patriot Leasing – Pennsylvania, Preferred Capital – Ohio, Landmarks Financial – Colorado, IFC Credit – Illinois, Frontier Leasing- Iowas, Dollar Leasing – Ohio, CFC Investment – Ohio, C & J Leasing – Iowa, Pawnee Leasing – Colorado, Susquehana Patriot Commercial Leasing – Pennsylvania, Preferred Leasing

Process: Sell them a deal that doesn’t actually exist, go bankrupt, put a hell/highwater clause in the lease, make them sign over rights to venue to the state of the leasing company, file in a state the small business cannot afford to commute to (most leases were not sold in the state of the leasing company) & finally use the court to extract every dime from the victims even though there are multiple states with summary judgments and/or remands in favor of the victims.   But how would the other small businesses know?

Wake up people!  These companies are not strong unless you make them strong by continuing to buckle under their idle threats!!!!!!!  This is not an isolated incident. This is rampant and if you’re reading this, you’re most likely a victim.  What if everyone just stood up and refused to pay?  Again, you are continuing to empower them when you pay money against an illegally constructed contract!!!!

Frontier Leasing was really “Liberty”

All defendants defaulted under their respective lease agreements by failing to make required monthly payments. In 2004 Frontier, Liberty’s successor in interest, filed suits against Acevedo, Bishop’s, Vista, and JMM. In each case it sought damages for breach of the lease agreement. The defendants failed to file answers or otherwise appear, and in March 2005 Frontier requested that default judgments be entered against all defendants.

http://www.precydent.com/citation/IA+App/05-601

To save you from the legal gibberish, Frontier is going after people some 8 years after they supposedly defaulted on Liberty leases – in reality, Liberty screwed all of these people out of their money on an ATM leasing scam.  The marketer of the scam went bankrupt, the organization that designed the machines, Tidel went public and members of its board got filthy rich! (See more below.)  The judge threw Frontier out on their asses as they smelled what they were trying to do.  Good Job Ed McConnell!  I’ve heard of personal injury lawyers, but not law firms that chase victims and kick ’em while they’re down!

So why the importance?

Well, you see Liberty was one of many leasing companies involved in a scam that went like this:  (taken from a court document – not from the press)

Credit Card Company (“CCC”) is an equipment vendor that developed an aggressive distribution program selling, installing and servicing ATM’s. CCC’s market included convenient stores, gas stations, and other similar businesses.  Appellee and CCC entered into a “Vendor Finance Program and Remarketing Agreement” whereby CCC would sell, distribute and service ATM’s and appellee would provide only financing to qualified CCC customers. Pursuant to their agreement, CCC would obtain all of the credit information from the customers buying the equipment, as well as their signatures on the credit applications and lease agreements.

So CCC made a deal with NCR and Tidal to sell their ATM machines (read about NCR and Tidel here.)  Tidal was obviously involved as executives in the company ( used the inflated revenues to make themselves rich.  They preyed upon unknowing store owners by coercing them into signing a lease for $269/month for 60 months ($18,000) for a machine that cost approximately $2,000.

The saga continued. Three members of its Board, including Rash, filed Form 4 reports with the Securities and Exchange Commission showing open-market purchases ofthe company’s common stock in October. Clay purchased 40,000 shares, and Rash and Raymond P. Landry purchased 10,000 shares each.At that time, Tidel also reported that Britton, who had served as a member of the Board of Directors since 1990, had tendered his resignation on Oct. 11. Britton had acquired 100,000 Tidel shares for $81,500 through the exercise of warrants on July 12, 2000. He then sold 133,800 shares for a profit of $1,556,494 over the next 12 days. A month earlier, Rash had sold 250,000 shares for a profit of $2,917,839 over an eight-day period beginning on June 13. Levenick also sold 105,000 shares from June 14 to 16 for $1,246,070 in proceeds. But Tidel claimed that at the time of the stock sales, no one in the company anticipated future problems with CCC. Let’s wait a moment for the laughter to die down. Read More here

Then CCC went bankrupt after selling all of the leasing paper.  Liberty was one of the original leasing companies in bed with CCC.  With this type of arrangement, CCC probably got a big chunk of money from the sale of the paper, walked away bankrupt and the left all the marks to the predatory behaviors of the leasing companies.

Fast forward to 2005 – NCR who was in bed with Tidel on the ATM deal, bought them out hiding more of their dirty little secrets.

NCR agreed to acquire the ATM business of Tidel Technologies in 2005; the deal closed early the following year. – Hoovers (from NCR history page)

Frontier Leasing is digging up every contract it can find and suing the holders for every dime it can get.  Search on “frontier leasing” and Iowa and see how many cases are out there in the public domain.  Not to mention hundreds that haven’t yet made it to the light.

Summary:  Today’s framework provides little to no protection for the little guy.  With the cost of legal representation (due diligence added to hourly wages exceeding $200/hour, there is no affordable option for defense).  With corporate bankrolls supporting the top legal firms and lobbyists on Capitol Hill, once again the behemoth is going to win. Look at GM, Chrysler, B of A and Citigroup!  So how is the little guy to make it?  Get bloody angry and call your congressman, your attorney general and make it known that you’ve been taken! (Chances are, they have heard from others and your voice might be enough to put the AG over the edge to stand up for what’s right in his state.  After all, if you go out of business, he loses tax money, jobs and all types of other revenues he relies on coming from small business, not big business!) If we lay down, the lion doesn’t go away!  He bites!.  But if we huddle up with our tusks outward, we can fend him off!  What little bit of corporate America that was trustworthy (banks, insurance companies, Wall Street) as we know it is gone.  It’s time to stand up and scream “We’ve had enough and we’re not going to take it anymore!”