Headlines:

   PinnFund/Leasing Founder Skips/Judge Issues Arrest Warrant

    eLeasing Companies---Up-dated Report

     Yahoo.Com Reports Major Loss

        Heller to Redeem Shares

         GE Profits Up 16% First Quarter

           Lakeland Bank ( leasing ) Reports Earnings

       Bob Rodi " ReVisits the question of ethics and standards in our industry."

######## denotes press releases, written by the subject of the press release

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  PinnFund/LeasingArrest warrant issued in fraud case

By Mike Freeman

STAFF WRITER San Diego Tribune Union

A federal judge issued an arrest warrant yesterday for Michael J. Fanghella, founder of

Carlsbad-based PinnFund USA,( PinnLeasing USA ), who is accused along with others of bilking

investors out of more than $300 million.

Believed to be among the largest securities frauds ever in Southern California, the case has

stung investors with stunning losses. Tom Frame, a Bay Area investor who attended yesterday's

hearing, said afterward that he invested $8 million in the scheme -- money that's apparently

gone.

In a PinnFund trust account that was supposed to contain as much as $330 million in investor

money, just $1.5 million remains, according to a court-appointed receiver. ( yes, this

may exceed the leasing scandals of OPM and Bennett.editor )

"There are people who lost everything. There are people selling their homes," said another

investor who attended the hearing. He asked to remain anonymous, explaining that he was

frustrated and depressed.

Fanghella hasn't been seen since the Securities and Exchange Commission filed sweeping

securities litigation against him and others on March 21. Attempts to reach Fanghella for

comment were unsuccessful yesterday.

According to the SEC, about $107 million of investor money supported Fanghella's "extravagant

lifestyle." Among the purchases he allegedly made with investor funds are houses in Rancho Santa

Fe, a yacht, Jaguars, BMWs, Corvettes and other vehicles -- as well as a house and other gifts

totaling $10 million for his ex-girlfriend, onetime porn star Kelly Cook.

Meanwhile, 200 PinnFund employees in Carlsbad lost their jobs when the company folded March 22.

Branch offices in more than 40 states also closed. Employees, who totaled 450 nationwide, have

not been paid.

Over eight years, the SEC contends that Fanghella, PinnFund, Oakland-based Peregrine Funding,

James L. Hillman of Oakland and three partnerships controlled by Hillman engaged in a Ponzi

scheme.

According to the SEC, Hillman raised millions for PinnFund. The money was supposed to finance

mortgage loans that would be bundled and sold to outside investment companies at a markup,

providing profit for PinnFund and its investors.

Court documents allege that "not a single dollar of investor money was ever used to fund a

loan." The company relied on credit lines to finance its mortgages.

Instead, the SEC contends investor funds paid for Fanghella's lifestyle, covered $95 million in

losses at PinnFund and provided millions in commissions to Hillman.

And, as is typical in Ponzi schemes, new investor money was used to make interest payments to

all investors, the agency alleges.

Investigators believe Fanghella invested $2.9 million in Moomba, a chic New York restaurant. An

occasional nightspot for celebrities, Moomba opened an outlet in Los Angeles on March 31.

Fanghella also used PinnFund money to buy a $27,000 Volkswagen for Cook's maid, along with other

expensive vehicles and art, according to report from the court-appointed receiver, former U.S.

Attorney Charles La Bella.

What's more, lawyers working for La Bella found $350,000 in PinnFund money deposited in the

Paris bank account of a "madame," apparently for call girl services, they contend.

U.S. District Judge Marilyn Huff held Fanghella in contempt yesterday for failing to respond to

previous demands to produce records.

Also yesterday, Huff set aside a request by the SEC that Hillman and his legal counsel, the

Sheppard Mullin law firm in Los Angeles, be held in contempt.

On Monday, the SEC charged that Hillman transferred $1 million to Sheppard Mullin after Judge

Huff had frozen his assets. Later, Sheppard Mullin revealed that the total transfer was $6

million.

The law firm returned all but $250,000 in attorney fees, as Judge Huff required.

In court documents filed yesterday, Hillman's lawyers contend that "the fraud committed by

Fanghella came as a complete surprise to Hillman." The filings say Hillman's 89-year-old mother,

30-year-old daughter and other family members invested in his companies.

Hillman's lawyers added that he is one of the few people associated with the case who is

cooperating with the SEC. Others -- including former PinnFund president Keith Grubba of North

County, former PinnFund in-house lawyer Samuel Kelsall and Fanghella's ex-girlfriend Cook --

have invoked their Fifth Amendment right against being compelled to testify against themselves

during depositions with SEC lawyers.

The SEC contends Hillman knew, or should have known, about the Ponzi scheme. He hid that

knowledge from investors so he could continue to collect commissions, which totaled more than

$19 million from January 1999 to October 2000, said the SEC's Tom Zacarro. ( there is also

much evidence from the divorce proceedings of Michael J. Fanghella, where his wife has

plenty to tell, and Fanghella testifies that PinnFund was "smoke and mirrors."

Meanwhile, PinnFund has been forced into involuntary Chapter 7 bankruptcy by Hillman's

fund-raising companies, which include Peregrine Funding, Grafton Partners, Allied Capital and

Six Sigma LLC. All of these companies also filed for voluntary bankruptcy in San Francisco.

  eLeasing Companies

   aggregate funding sources

         ( Soley eLease brokers/online brokers/super brokers )

  This is from our website and can be better read in html at:

     http://www.leasingnews.org/elease/elease.htm

Top eLeasing companies as ranked by employees and volume

*From Website

a—according to a highly reliable source, the company is down to three employees

N/R No Response

The eLeasing List above was compiled by Joshua Boucher, LeasingNews intern, who

is now working on a list of  eLeasing software companies.

Leasing News published the first report on "eLeasing" in August, 2000.  There have been many

changes in the last nine months, with three no longer in business, others changing to more

established methods of obtaining sales, and others in great financial trouble.  It

appears this niche of "Dot Com" business is going the way of many other "Dot Com"

companies.  *

The internet appears to be a viable business for captive vendors, those that control the

placement of leases, and other financial institutions, including many in the leasing

industry, who control the placement of leases. Most leasing companies today have

a web site, and either a simple or "portal" application "on line."

These "eLeasing" companies aggregate, collect and connect funding sources with lessees. They are

intermediaries. They may be considered "online brokers" or "online super brokers." They do not

fund leases "direct." Most of them have an "auction" type format ,"matching" lessees with the

lowest cost lessor. They also claim to offer a one-stop-shop for all credit and equipment types.

Many of them do not "credit score" but introduce or match lessee and equipment to lessor. Most

do not have "auto approval" or make so-called "instant decisions." Although they may make

claims, they do not live up to them.  Most make mention of the leasing industry in various forms
of "negative selling."

 Very few have come from the leasing industry itself.

What has changed is that the eLeasing "dot comers" are going the more traditional methods of

other leasing companies, who hire salesmen, telemarketers, send out faxes, mail letters to

businesses, including "pre-approved" plastic leasing cards, seeking business from "lease

brokers" , pay fees to sellers of equipment, and of course, make direct calls on end users. The

World Wide Web is not bringing them enough business to survive as a sole "dot com" attraction of lease applications..

In its short "hay day," LeaseExchange was "burning" $300,000 a month, according to the former

president Aaron Ross, on  sales managers, sales offices in both Northern and Southern

California, and salesmen, who were primarily calling on sellers of equipment. There was also

much promotion on the internet to attract end users to the web site, and a sales team to attract
funders of

equipment to approve the credit.  Overhead has been dramatically scaled down and a

small crew is able to complete the "on line" auction process.

In addition, one of the advisory board was an officer of  a major seller of computer equipment,

who was trying to have most of their sales go through LeaseExchange.

He is no longer employed at this company.  For the record, I serve as a member

of the advisory board; however, there was only one initial meeting and it was my

impression advisory board members were chosen to contribute "vendors" or "money".

None of my advise was ever taken, for whatever that was worth.  The leading Dot

Com magazine, "Red Herring," singled out LeaseExchange as a leader in the

new eLeasing industry, often quoting former president Aaron Ross. He appeared

at a United Association of Equipment Leasing Conference in San Francisco.

This company has learned much, built a following, and continues to survive.

It has a lot of positive things going for it. What  I have communicated is public information.

eLease lost a round of management as reported on the Leasing News list. They then

lost their main round of funding at Primestreet.  Employees were let go.  While their

site offered many software programs, American Leasing attempted to obtain a

demonstration, wanting to buy the program, but was told they were "still in beta,"

meaning not available.

The web site is still up, and there are advertisements in the Daily Monitor, yet we have

conflicting reports from ex-employees and from our own direct reporting.  The fact

is, once the website is created, any e-lease company can be run from the bedroom

of your home as the website may be hosted elsewhere.

TotalFunding made a very big splash, first at the National Association of Equipment Leasing

Conference last April in Nashville, at the United Association of Equipment Leasing Conference

last May in San Francisco, with "lavish" no host parties, the hiring

of top leasing industry sales managers, such as Dennis Doyon and Steve Warren, among

others.  The idea was not only to impress funders, but to attract brokers, who would

split points based on volume and points to vendors.  Many brokers were signed up, obtaining

TotalFunding business cards.

As a member of the TotalFunding advisory board, I am not privy to any financial information,

 nor have I ever attended an advisory board meeting ( to my knowledge,

there has never been one. )  There have been a number of changes at TotalFunding.

The leader, Allan Collier, is a former lease broker, and experienced in the industry.

He is very knowledgeable.

My personal experience as a lease broker attracted six vendors to utilize the program, none of

whom were every successful with the on line application process. One a major

national seller of software in the small dollar range, $800 to $2,900, by the time it was about

to start, TotalFunding eliminated the small lease plan as not being profitable for the time

involved. No application was ever processed, and the system on the sellers website

was never put into place, after several months of effort.

The original sales personnel are no longer at TotalFunding, as they found out many of the

transactions needed relationship selling, meaning the broker had to be involved in much of the

process, therefore the low commission was not paying for the time needed.  While many brokers

were given SalesForce software in the beginning, this was abandoned as not being effective. Too

many people were telemarketing to lessees and vendors.  As a funny side note, American Leasing

looked at a Silicon Valley list from Dun and Bradstreet,

and in course of the proposed sale, were told "…over thirty equipment leasing companies

were using the list, so it must be good."

TotalFunding does direct selling, as Alan Collier did in his old days as a lease broker. They

also supply "backroom documentation" for brokers who send them business via

their website, or direct by e-mail, fax, Federal Express.  They have become more a

"traditional" leasing company with a website for receiving leasing applications. They

are surviving, and all indications are the company is learning, growing, and adapting

to the marketplace.

The internet is great technology with the ability to process data at tremendous speeds,

but in the end it is still a communication tool just like the cellular telephone or fax machine. It has

tremendous capabilities and possibilities, but the selling of leases is not done by

telephone or fax or by the computer connected on the internet . It is still a people business.

This niche of the leasing industry that started out with the attitude they were going to change

the way financing was done, that everyone was "out of date," and "we are the

World," is now struggling to survive, perhaps more so than the rest of the leasing industry.

*80 percent of San Francisco-area dot-coms are expected to go out of business during

the next 18 months.

75,500  dot-com employees laid off nationwide since December 1999

25,000  dot-come employees laid off in Silicon Valley and the San Francisco              

                 Bay Area since December, 1999

30,000  dot-come layoffs, expected in the San Francisco Bay Area this year.

S.F. Chronicle, 4/07/01

Source: Cox Newspapers, Rosen Consulting Group;

Cushman & Wakefield; Chanllenger, Gray and Christmas

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Executives Starting Leaving Yahoo the first Quarter, and Google.Com growing, yesterday

Yahoo.com announced a "hard core" section, citing that pornography sells well on the

internet, and today they post a major loss.    

      Yahoo Posts Loss in 1st Quarter, Plans to Cut 12% of Staff

By CHARLES PILLER, Los Angeles Times Staff Writer

     SAN FRANCISCO--Yahoo, owner of the most widely used Internet search site, posted a

first-quarter loss as advertising sales declined, and said it will fire 12% of its work force to cut costs.

     The company posted a net loss of $11.5 million, or 2 cents a share, in the first quarter,

contrasted with net income of $67.6 million, or 11 cents per share, a year earlier.

     Yahoo narrowly bettered Wall Street's diminished projections for the quarter on a pro forma basis by

earning $7.6 million, or 1 cent per share, excluding one-time gains and losses.

     The company also saw its revenue fall 22% to $180.2 million in the latest quarter, compared with

revenue of $230.1 million a year ago.

     Analysts had expected disappointing results, given Yahoo's strong warning last month that

its primary revenue source--advertising--had nose-dived in recent months. About 30% of Yahoo's

advertisers are other Internet companies, and many of them are short of cash to spend on ads.

     A consensus of analysts polled by First Call/Thomson Financial had projected a break-even

quarter for Yahoo on a pro forma basis.

     "The current period we are navigating through is challenging, but it's temporary," Yahoo

Chairman Tim Koogle said in a conference call. He noted that financial cuts also will come in

marketing, travel and other areas. Yahoo will take a $40-million to $60-million charge in the

current quarter for the layoffs of 421 staffers.

     The work force reduction "may not be enough" given continued uncertainty in the ad market,

warned Safa Rashtchy, an analyst with US Bancorp Piper Jaffray.

     And others suggested that Yahoo's core business shows increasing signs of weakness.

     The Santa Clara, Calif., company's shares fell 16 cents to close at $15.86 in regular

Nasdaq trading Wednesday. In after-hours trading following the announcements, Yahoo shares rose

as high as $16.38.

     Yahoo's stock has been hammered by investors during the last year as the Internet stock

bubble has burst, with Yahoo losing about 90% of its value since hitting a high of $216.

     On Wednesday, Yahoo warned that its revenue this year would slump by about one-third--to

between $700 million and $775 million--compared with a year earlier.

     "The company continues to fault the U.S. economy for slowing media budgets, yet there's no

one else out there seeing sequential declines in ad revenue [at the magnitude] Yahoo is," said

Scott Reamer of SG Cowen Securities. Yahoo's ad revenue from traditional companies--that is,

other than "pure-play" Internet firms--declined 35% in the first quarter compared with the

preceding quarter, the company said.

     Analysts say that any turnaround at Yahoo will have to combine an improvement in

advertising and new sources from pay-services such as auction listings, real-time stock quotes,

sales of pornographic DVDs and video tapes and a planned move into music subscriptions.

     Yahoo's efforts to convert its vast audience of about 190 million worldwide into paying

customers have shown meager progress so far. "None of their new alternative revenue

opportunities are gaining any meaningful revenue or traction so far," said Frederick Moran, an

analyst with Jeffries & Co.

     Meanwhile, the company is dealing with important transitions in its management ranks.

Koogle stepped down as Yahoo's chief executive last month, and the company is searching for a

replacement.

     "We're looking for a strong and proven leader of a multibillion dollar company, who can

manage a global work force," preferably from a technology or media company, said Yahoo President Jeff Mallett.

     A year ago, when Yahoo's stock was sky high, any number of such candidates would have been

available. Now it will be an uphill battle, analysts say.

     In recent months, Yahoo also has lost five of its top international managers. The latest

departure, announced Wednesday, was Senior Vice President of International Operations Heather

Killen, who left to pursue other business interests.

     "The morale can't be good," Rashtchy said.

     All these factors suggest that despite anti-takeover measures taken by Yahoo's board, a

takeover may be likely in the next year by a large media company such as Viacom or Disney,

analysts say.

     Merrill Lynch analyst Henry Blodget agrees that the company's independence is in doubt.

     "We believe that if that company can't turn itself around, it will sell to a large media or technology

company for $10-$15 [per share] within a year," he wrote in a research note on

Tuesday. Blodget suggested in a recent interview that Microsoft might be another likely suitor

for Yahoo.

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  Bob Rodi " ReVisits the question of ethics and standards in our industry."

 Since this was such a hot topic in the leasingnews a couple of

weeks ago I have had several discussions with colleagues regarding the issue

of ethics.  The leasingnews has a wide readership so I thought I would pose

a few questions to see what kind of response, if any, we would get. 

I discussed the issue of ethics with several funding sources and posed the

following question. "Would you continue to do business with a source, who

you knew was conducting business in a manner that could be construed as

unethical, but who was providing $3 million a month in volume"?  "If so, how

far would they have to go with questionable ethics before they would be

terminated?"

While some may be surprised at the answer I was not. Most of the funders

stated that as long as their portfolio was clean and the business that a

particular source provided, was clean for them, then they would not

particularly care how that person competed in the marketplace. Many funding

sources feel that the brokers who complain most about standards are the ones

that are getting their butts kicked in the marketplace. These brokers are

confusing tough competiton with unethical behavior.

I further argued that the first standard of the UAEL standards pretty much

states that it is our responsibility to adhere to ethical practices and to

encourage others to adhere to them. My argument was that by not

"discouraging" unethical behavior one could be seen as violating the

Standards of Professional Practice and therefore, a complaint could be

brought against the funding source for violating the first standard.  The

basic answer, pretty much across the board, was that would be allowing the

association to "dictate" business practices, which would not be acceptable.

As always, it comes down to a question of profit.  Many people are willing

to look the other way, if there's enough money in it.  How therefore do we

"enforce" ethics and standards if profit is the only motive that drives our

businesses?  If the guys who control the money are only going to enforce

ethics when it becomes a Reps and Warrants violation, how are any of the

associations going to effectively enforce a code of ethics and standards.

The second question that I posed was to several third party colleagues.

This question stemmed from our work on the Standards Task Force last year.

Many of the funding sources wanted a line inserted in the standards that

"beefed up" the obligation of a broker lessor to disclose information, even

after the deal was assigned.  Pesonally, I thought that this was already a

part of the standards but evidently there are many who disagree with me.

The additional language would obligate the broker to disclose any material

facts on a transaction even after the deal was assigned.  These material

changes, happening now, would not have altered the decision to buy the deal

because the occurred after the transaction was done and had nothing to do

with the original credit investigation. 

I was surprised that adding this language was so objectionable to so many

people.  Evidently the obligation to disclose ends with the assignment of

the transaction and would only be covered if some material fact would have

altered the decision and was present but not known or present but hidden

from the lender.

These are just two questions.  There are many more.  I hope to have the

opportunity to discuss these an others in Scottsdale.  If we are ever going

to really tackle the issue of ethics we have to be willing to submit to a

set of rules that we can all live with and then we would have to agree to

allow the UAEL, NAELB,EAEL, or ELA enforce that code against us when we sign

up as members.

Most people, when really pushed to the wall, will not sign because of the

awesome power that they would give their association to police their

business.  If we did adhere to these types of standards and gave the

enforcement power to our associations, then how would that alter the public

perception of our industry?  Would it be a powerful enough message that we

could discourage the public from doing business with someone who did not

belong to an association that had strict enforceable standards?  These are

interesting questions and I would like to hear the responses.  I would also

like to hear about other violations or perceived violations.  Hopefully we

can have a stimulating debate with the permission of our esteemed editor,

Mr. Menkin.

Bob Rodi, CLP

LeaseNOW, Inc.

www.leasenow.com

drlease@leasenow.com

1-800-321-LEAS (5327) x101

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Heller Financial to Redeem All Shares of 8-1/8% Cumulative Perpetual Senior Preferred Stock,

Series A

CHICAGO, April 11 /PRNewswire/ -- Heller Financial, Inc. (NYSE: HF) today announced that all of

the 5,000,000 outstanding shares of its 8-1/8% Cumulative Perpetual Senior Preferred Stock,

Series A, will be redeemed on May 15, 2001.

The redemption price will be $25.00 per share, plus accrued and unpaid dividends to the date of

redemption payable to holders of record thereof on May 1, 2001.  Dividends will cease to accrue

on the Redemption Date.

The Company is sending a notice of redemption and letter of transmittal to registered holders of

the shares.  EquiServe is the paying agent for the redemption price and may be contacted

directly at 781-575-3400.

Heller Financial, Inc., is a worldwide commercial finance company providing a broad range of

sophisticated, collateralized financing solutions. With $20 billion in total assets, Heller

offers equipment financing and leasing, sales finance programs, collateral and cash flow-based

financing, financing for healthcare companies and financing for commercial real estate. The

company also offers trade finance, factoring, asset-based lending, leasing and vendor finance

products and programs to clients in Europe, Asia and Latin America.  Heller's common stock is

listed as "HF" on the New York and Chicago Stock Exchanges.  Heller can be found on the World

Wide Web at http://www.hellerfinancial.com .

SOURCE  Heller Financial, Inc.

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GE Reports Record First-Quarter 2001 Results - Ongoing Earnings Up 16% to $3.017 Billion -

Industrial Revenues Up 11%

FAIRFIELD, Conn.--(BUSINESS WIRE)--April 12, 2001--GE achieved record earnings for the first

quarter of 2001, posting a 16 percent increase in ongoing earnings, GE Chairman and CEO John F.

Welch reported today. Ongoing earnings exclude the one-time, non-cash impact of adopting new

accounting rules.

"GE's broad-based portfolio strength was again demonstrated in the first quarter. Long-cycle

businesses grew operating profit 36%. GE Capital Services had a strong quarter with ongoing

earnings growth up 16%. Our short-cycle businesses, impacted by the U.S. economic slowdown,