Special April Fool’s Edition     

 

                     Kit Menkin’s Leasing News

                   www.leasingnews.org  Monday, April 1, 2002

Accurate, fair and unbiased news for the equipment Leasing Industry

 

           Headlines----

 

             William Gates Buys GE Capital and CIT

                  Gazelle Leasing—Tom Depping Returns

                        GoodRodi Financial---East to West Coast      

                           Mike Fleming Retires

               ELA, EAEL, NAELB, UAEL Merge

                   Newell Runs Away with Britney Spears

                         Investment Tax Credit Tax Law Signed

 

________________________________________________

 

William Gates Buys GE Capital and CIT

 

William Gates buys GE Capital, CIT and the State of New Hampshire for undisclosed dollar amount. To call the new company Cit-GE. The logo will be a Snauzer with a large dog collar with medal with GE on it. Curt Lynse has been hired to train the dog and run the company. 

 

Gates announced he is moving Microsoft to Portland, Oregon, as he

likes the climate better than Seattle.  He added it was time that companies

came to Oregon, rather than left.  It is reported that he is negotiating

the purchase of the City of Portland. 

----------------------------------------------------------------------------------------

 

Gazelle Leasing—Tom Depping Returns

 

Tom Depping starts Gazelle Leasing, selling his tobacco farm and

cigar manufacturing company in Costa Rica, moving back to Houston,

Texas.  He will specialize in ATM machines, tanning booths, and

owner-operator trucks. Charlie Lester was hired as sales manager.

“ I am really looking forward to working with Tom again, “ he said.

http://www.chron.com/cs/CDA/c100story.hts/special/chron100/553482

--------------------------------------------------------------------------------------------

 

GoodRodi Financial—East to West Coast

 

Ken Goodman and Bob Rodi have joined their operations together,

with Goodman to run the West Coast Operation and Rodi the

East Coast Operation.  Rodi claims  he did not form a family

trust and charitable trust “ Police Retirement Fund of Baltimore”

to protect his assets and has full confidence in the new operation.

It is reported they will be using Ken’s old computers on the

West Coast.  They are so old, they operate by “gas.”

--------------------------------------------------------------------------------------------

 

Mike Fleming Retires

 

Reaching 64, Mike Fleming takes early retirement from the Equipment Leasing Association.   He has moved to Wyoming, where he plans to

drive his Hummer freely, tired of being restricted in Virginia and

Washington, DC, due to its size.  He also plans to take up snowboarding

and ball room dancing.

---------------------------------------------------------------------------------------------------

 

ELA, EAEL, NAELB, UAEL Merge

 

The new organization will be called the United Equipment Leasing

Association and Do We Have to Include Brokers.  New membership

fees have funders at $295, service providers $125, and brokers doing

business under $1 million, $1500, and for each million dollar of volume,

another $500 yearly dues, until $10 million, when they receive a

$1,000 rebate and free registrations at all conferences.

 

Dr. Ray Williams was chosen to replace Fleming.

New Cit-GE president Curt Lynse said, “ I hope he likes dogs.”

 

---------------------------------------------------------------------------------------------------

 

Newell Runs Away with Britney Spears

 

In a very private wedding, Jerry Newell and Britney Spears were married

in Fairfax, California.  The ex-vice-president of Bank of the West Leasing

said they met when his department was considering a lease of new

recording studio equipment..

 

“We just hit it off, “ he said. “ We both like to have fun.”

 

_______________________________________________________________

 

Investment Tax Credit Tax Law Signed

 

President George W. Bush signed into law the 15% investment tax

credit and 50% first year depreciation initiative for lessors “...to stimulate

the equipment leasing industry. “  The proposal was headed by Cit-GE

president Curt Lynse who visited the White House often, and along

with the combined income and assets of both GE Capital and

Microsoft, got the president’s ear. He even got to bring his Snauzer

with him, who also stayed overnight in the Woodrow Wilson room.

 

 

 -------------------------------30------------------------------------------------------

 

 

           THIS IS NOT THE APRIL FOOL’S EDITION

 

               Kit Menkin’s Leasing News

                   www.leasingnews.org  Monday, April 1, 2002

Accurate, fair and unbiased news for the equipment Leasing Industry

 

            Headlines----

 

   Amex Biz Finance Out  of Third Party Originations

                   The Week Ahead  April 1st---5th/Economic Indicators

                     Pro and Con GE Capital/Colonial Pacific Merger of Operations

                       Golf Handicap System Explained

                          "Job Creation and Worker's Assistance Act of 2002

                                  and It's Affect on Equipment Leasing”—April 4th

                           One Year After the  PinnFund/Leasing Collapse

Pure Markets & CIT  e-Financep-it.com Nominated for eLNA Web Award

    Excessive spending, debt seen as abusive—Money Abuse by Ann Perry

 

### Denotes Press Release

 

 

 

 

 

 

---------------------------------------------------------------------------------------------------

 

Amex Biz Finance Out  of Third Party Originations

 

American Express  Business Finance is shutting down all third party origination channels. This includes private label, any remaining broker relationships, and

referral fee sources. 

 

 Sales force has been told to find an industry to focus on or move on. 

 

Several vendor programs have been analyzed for risk and over reserved delinquency and have been terminated.

 

             AMEX to stay with core programs.  More to lose jobs if conversion to core SIC

            codes is not immediate. 

 

(Names withheld)

 

Confirmed from three separate very reliable sources.  This is not

an April fools Joke.  Leasing News attempted to reach American Leasing Express

Business Finance by telephone and e-mail, but no response to date.

 

Small ticket funding sources are getting very rare and the ones still

standing know it and acting accordingly..

 

Basically, it appears the only major very small ticket players Manifest, Marlin (who I hear are doing tons of business), Microfinancial and perhaps Republic Leasing of South Carolina  ( I say perhaps because we were trying to reach Dwight Galloway on Friday as we are told the finalization of the purchase of the leasing company was to happen Friday.

 

We are also told there is going to be a new implementation policy toward

private label and “program” leasing on a more “wholesale basis” than

retail basis and wanted to clarify that as it most likely means less small

broker business and more “qualified broker and discounter business”

with the key being the “buy rate.”

 

There may be some other regional players in the very small ticket

marketplace, but definitely less funders and very, very few, if any,  “story

credit sources.”

This applies to small ticket companies, such as Marlin, who go down

to $1,000 as does Microfinancial.  Financial Pacific as well as Pawnee were

not included in this market. Compaq Leasing is also actively soliciting business

from leasing broker in the small ticket market place, but computer and software

committed. . We did not mention Capitalwerks, although we should as they are opening offices and expanding, but do not know if they qualify in this small ticket marketplace.  Mark McQuitty in “Meet the Leasing Newsmaker” said “ story credits” were dead; of the credit wasn’t there, no one wanted it.

 

If you think you were not mentioned and are a high volume very small

ticket leasing company, or the classification needs more “identification,” please let me know at your earliest convenience.

 

Leasing News would be very much interested in your opinion about the

small ticket marketplace.

 

Kit Menkin, editor

___________________________________________________________

 

The Week Ahead April 1-5

 

 

Economic indicators:

 

April 1 Monday

 

Hiatus on Enron/Andersen hearings continues as Congress remains in recess.

 

Institute for International Economics opens two-day conference on proposals

for an international bankruptcy process for countries. Speakers include IMF Deputy Managing Director Anne O. Krueger and John B. Taylor, undersecretary of the Treasury.

 

Economic indicators: Institute for Supply Management manufacturing index

 

April 2 Tuesday

 

Circuit City issues quarterly report.

 

Economic indicators: February factory orders

 

April 3 Wednesday

 

Treasury's Taylor talks about global economic outlook at Downtown

 

 

 

Economic Club in New York, while Institute of International Economics releases its own global forecast in Washington.

 

Liberty Media issues quarterly report.

 

April 4 Thursday

 

National Telecommunications and Information Policy Administration opens

 

two-day Spectrum Management and Policy Summit at Commerce Department and Reagan Building. Speakers include Commerce Secretary Donald L. Evans and FCC Chairman Michael K. Powell.

 

Securities and Exchange Commission takes roundtable on reforming financial disclosure to Chicago.

 

Presidents of Federal Reserve Banks of Kansas City, Mo., Richmond, New York and St. Louis give speeches at various locations around the country on the economy and monetary policy.

 

American Enterprise Institute hosts discussion on unintended consequences of recently passed economic stimulus package. Speakers include Ben Bernanke of Princeton, Charles Calomaris of Columbia and Allen Meltzer of Carnegie Mellon.

 

April 5 Friday

 

Economic indicators: March unemployment rate and payroll employment.

 

-------------------------------------------------------------------------------------------

 

 

Pro and Con GE Capital/Colonial Pacific Merger of Operations

 

 

More to the Colonial dilemma.....Systems between(Platinum CPLC vs. PMS &

Cheetah GE) are not compatible. GE was behind 195 fundings as of 3/25.

GE extended retention to several key employees at CPLC to help with the

situation. No one will return phone calls to CPLC from GE Chicago in

order for CPLC to help.

 

 They were supposed to send back the deals so Colonial could get them caught-up. Nothing arrived.

 

No one is trained in Chicago to handle the business.....on and on and on......wow. If this were any other company they would be black listed and down the tube.....

 

Now ex, or soon to be ex-Colonial employees who have dedicated many

years of excellent service are very frustrated and sadly disappointed

over this and for all the brokers and customers that are affected.

 

This is not the way Colonial ever had conducted business before...sad

memories of the last days at Colonial.

 

( Name With Held )

 

My name is Daniel L. Dew of Suncoast Equipment Funding Corp. located in

Tampa, FL.

 

We have been a CPLC broker for 14+ years and have always had great relations

with all the people, high and low, at CPLC in Portland.  Like any broker and

funder relationship, we have had our ups and downs, but overall they have

been more helpful to us than harmful.

 

We were initially concerned that the move to Chicago would be difficult for all concerned, and we were right. But patience should be the operational term here.  I had no illusions about this transfer and have planned accordingly.  Give it some time.

 

> We reported on Wednesday that two CPL employees threw up their hands

> and returned to Oregon.

 

My understanding was that they agreed to go to Chicago to help with the

transition.  When the were done, they went back home.  I have spoken with

the people who went to Chicago and are now back in Portland.  Not once did

they indicate that they

"threw up their hands".  It hasn't been an easy transition, but based on the

size of the operation they were transferring, the transition has not been as

bad as I thought it would be.

 

> evidently is either the "GE Way or the Highway."

 

This statement tops the cake!  I have had great conversations with most of

the employees and management at the new office and they have been helpful,

courteous and eager to help in any way possible.  The employees are at times

hard to get on the phone, but once contacted, have been eager to please.

 

I will gladly post my name.

 

 

Daniel L. Dew

Suncoast Equipment Funding Corporation

a division of Ervin Leasing Company

http://www.dandew.com/

ddew@tampabay.rr.com

 

___

 

 Hey, Kit, they are getting their stuff together quickly. 

 

The complainers are the same people that complained when they had over 200 staff processing the business.

 

 ( Name With Held )

 

 

 

 

 

 

 

Golf Handicap System Explained

 

According to the USGA the following applies for posting of scores.

 

 

 

ESC is an adjustment of individual hole scores (for handicap purposes) in

order to make handicaps more representative of a player's potential. ESC is

used after the round and is only used when the actual score or the most

likely score exceeds his/her maximum number. ESC sets a limit to the number

of strokes a player can take on a hole depending on his Course Handicap. ESC

applies to all scores, including tournament scores. Below is the maximum

number a player can take:

 

Course Handicap   Maximum Number

9 or less   Double Bogey

10-19   7

20-29   8

30-39   9

40 and above   10

 

There is no limit to the number of holes one may take the above maximum

strokes.  There previously was a limit under the old system but that was

done away with several years ago.  Anyone desiring information on

handicapping as recommended by the USGA can go to the web site www.ghin.com.

 

There one can find all the proper information on handicapping as well as

much other valuable data.

 

JW

 

Jerry Withrow

Jerryw@viawest.net

 

__________________________________________________________________

 

#####   ##############################   #################

 

ExecutiveCaliber - Global Lease Training Announces

             Jeffrey Taylor To Participate in EAEL Teleconference Series

 

Bountiful, UT -  Jeffrey Taylor, Founder of ExecutiveCaliber - Global Lease Training, will  conduct an Eastern Association of Equipment Lessors teleconference on April 4, 2002 on the "Job Creation and Worker's Assistance Act of 2002 and It's Affect on Equipment Leasing"

 

 (Open to members and non-members. editor)

 

             Mr. Taylor lectures worldwide on a variety of leasing topics and specializes in advanced sales training.

 

             He frequently writes on leasing subjects and has been published in the Molloy Monitor, Asian LeasingJournal, Journal of Equipment Finance, Practical Cash Management, Asset Leasing Digest, Handbook of             Equipment Leasing and E-Trucker Magazine.

 

             He earned his MBA from the University of Chicago and a BA in Finance from Washington University in St. Louis. He studied overseas at the University of Strasbourg and the University of Grenoble in France. He is a licensed CPA in Utah, California, and New York.

 

             Topics To Be Discussed

 

             What is in the Law and What Didn't Make It?

 

             Details and Implications:

 

               o Changes in MACRS

               o Change in Net Operating Losses with Carry-Back Provisions

 

             How the Law Impacts Pricing

 

             How the Law Impacts Lease vs. Buy Analysis

 

             How the Law Impacts Estimated Taxes for the First Quarter of

                   2002

 

             Registration Must Be Received by Monday, April 1, 2002

             Members $15.00 per call

 

             Non-Members $35.00 per call

 

             Time: 12:00 PM Eastern Standard Time (approx. 60 minutes)

              ExecutiveCaliber - Global Lease Training Announces

             Jeffrey Taylor To Participate in EAEL Teleconference Series

 

learn....................

 

             About ExecutiveCaliber - Global Lease Training

             ExecutiveCaliber - Global Lease Training specializes in training equipment leasing companies in the areas of advanced sales, lease accounting, lease taxation and back-office administrative functions.

 

             Company Website: http://executivecaliber.ws

 

             EAEL

             The Eastern Association of Equipment Lessors (EAEL) is a non-profit trade association serving its members in  the equipment leasing industry. The association is governed by an elected Board of Directors with various committees that administer to its overall operation. Member firms are committed to a philosophy of  professionalism and integrity and subscribe to a Code of Ethical Standards as an expression of this

commitment. Although EAEL is primarily a northeast regional association, our members are located in 31 states and Puerto Rico.

 

             The mission of the EAEL is to serve the interests of its members in the equipment leasing industry and to provide educational, professional and networking opportunities by:

 

               o Providing opportunities for the exchange of ideas and information concerning leasing industry

                 management for study, discussion and publication

               o Developing efficient methods, procedures and techniques for managing common interests of

                 independent lessors

               o Developing and encouraging the practice of high standards of personal and professional conduct among

                 executive serving in the equipment leasing field

               o Holding meetings and conferences for the mutual improvement and education of members

               o Exchanging and compiling information with respect to all new case law and other legal and legislative

                 developments at state and federal levels which affect the leasing industry

               o Collecting and disseminating statistics and other related information helpful to its members including

                 accounting reviews, lease forms and other documentation

 

             Each of these activities substantially contributes to the overall success and accomplishments of the EAEL.

             They also provide the mechanism for future EAEL activities.

 

             Company Website: http://www.eael.org

 

To register for this very important teleconference

 please contact:

Alison Pryor

email: amfnyc@eael.org

voice: 914-381-5830

 

 

-------------------------------------------------------------------------------------------------

 

 

Too Serious????

 

Your newsletter has been a little too serious lately.

 Here is some humor if you want to use it.

 

Richard

 

 

 

Date: Sat, 30 Mar 2002 15:05:18 -0800

To: joanie@uael.org

From: Richard Walker <RWalker@CELeasing.com>

Subject: Telephone # for Caesars

 

 

Joanie,

 

I just called the 800 number provided for Caesars Palace in the UAEL

Spring Conference Brochure (800-634-6681) and was redirected to a

900 number that was charging $1.95.  Is this a new

membership benefit or perhaps a new revenue generating device for

the Association?  Please don't keep your membership in the dark

about these great UAEL benefits.

 

Seriously, Joanie, I asked Caesars' operator about the number and

it is not part of their system.  You should alert the membership as to

the correct number: 800-634-6001.

 

Richard Walker

 

========================

Richard C. Walker

Capital Equipment Leasing

President

========================

http://www.CELeasing.com

e-mail: rwalker@CELeasing.com

tel:  (858) 551-1214

fax:  (858) 459-9394

========================

 

========================

Richard C. Walker

Capital Equipment Leasing

President

========================

http://www.CELeasing.com

e-mail: rwalker@CELeasing.com

tel:  (858) 551-1214

fax:  (858) 459-9394

========================

 

 ( Sorry, you think Leasing News has been too “heavy.”  Thank you for sending the correct telephone number for those who would like to attend the joint Eastern

Association of Equipment Lessor and United Association of Equipment

Leasing Conference in Las Vegas. Editor)

 

---------------------------------------------------------------------------------------------------

The PinnFund pinch

 

 

One year after the Southern California mortgage/equipment leasing firms spectacular collapse, investors and employees are struggling to rebuild their lives

 

 (the equipment leasing subsidiary PinnFund Leasing is not covered in

this article, but was located at most of the mortgage offices and was

active in the same type market the mortgage industry, but for

“personal property” rather than “real estate.” This story re-caps

a full year of events,  emphasizing employees and investors and is

certainly worth reading. Editor )

 

By Mike Freeman

SAN DIEGO UNION-TRIBUNE STAFF WRITER

 

 

In the morning of March 22, 2001, the phone rang in the office of a Texas real estate developer. It was his banker.

 

"What she told me was, 'It's so bad, I can't tell you on the phone. I'll fax it to you,' " he said.

 

Minutes later, he read a newspaper article about a massive fraud at PinnFund USA, a Carlsbad mortgage company. Over the past four years, he had invested millions – much of it borrowed – in partnerships that supposedly provided capital to PinnFund to make home loans.

 

Now the U.S. Securities and Exchange Commission was charging that PinnFund was at the center of one of the largest scams of its kind ever in Southern California, burning through nearly $330 million.

 

"In my case, I knew in an instant it was all gone," said the developer, who asked to

remain anonymous so as not to hinder efforts to dig himself out of financial quicksand.

 

Over the next six weeks, he lost 25 pounds. His wife, who was thin to begin with, also lost weight. Neither could sleep more than a few hours each night. He said he thought about suicide "plenty."

 

"It's not like I'm 42 years old going through this thing. I'm 60," he said. "It absolutely dominates all your thoughts – 30 years of your work down a rat hole."

 

This month marks the one-year anniversary of PinnFund's spectacular collapse. Not only did the company's demise saddle 160 investors with millions in losses, it also left 200 workers in Carlsbad and another 200 across the country looking for jobs as the economy tumbled toward recession.

 

Michael Fanghella, PinnFund's chief executive, pleaded guilty a little over a week ago to fraud and tax-evasion charges. He faces up to 14 years in prison.

 

Investors and employees, meanwhile, are struggling to rebuild their lives.

 

Fanghella's attorney, Ezekiel Cortez, said Fanghella is now cooperating with authorities and accepting responsibility for his actions, while maintaining that he was not the ringleader of the scam.

 

Investors and employees, meanwhile, are struggling to rebuild their lives.

 

On the surface, PinnFund was a thriving mortgage lender that specialized in loans for home buyers with poor credit. It operated more than 40 branches nationwide. Fanghella, 50, and PinnFund's money raiser, Oakland lawyer James Hillman, told investors to expect annual returns of 17 percent.

 

But investor money actually went to cover $95 million in losses at PinnFund, pay for Fanghella's lavish lifestyle and provide millions in commissions to Hillman, the SEC said.

 

Typically, complex financial fraud cases take years to untangle. But the PinnFund saga has progressed remarkably fast.

 

In just over a year, the SEC settled with Hillman, who maintained his innocence and agreed to turn over as much as $47 million. It also settled with Kelly Cook, a former porn star who dated Fanghella for six months and received $14 million in

 

PinnFund assets.

 

The case had a lurid side – exotic dancers, a $120,000 dinner, at least $1.4 million spent on a wine collection – that grabbed headlines. In one instance, Cook transferred the title to a $5 million Orange County home purchased with investor money to a holding company she controlled, moved in with a companion, Charles Spagnola, then broke up with Fanghella and ordered guards at the gated community to keep him out.

 

The risque details tended to overshadow the human toll of PinnFund's downfall that still lingers – for employees, for family members and particularly for investors.

 

In the Bay Area on the morning of March 22, 2001, another investor, who also asked to remain unnamed, sat at his computer, scanning the news and drinking coffee, when he came upon the article on the SEC's action against PinnFund.

 

The investor, a retired managing partner of a major accounting firm, had $2 million in the deal. More devastating, though, was the fact that he had convinced friends to invest $25 million.

 

Like many investors, he initially believed the SEC was wrong in calling PinnFund a Ponzi scheme, where new investor money is used to pay returns to earlier investors.

 

He believed investor money flowed into a PinnFund trust account and was restricted for use only to fund home loans. Investor money was supposed to be secure, backed by deeds of trust on homes throughout the United States.

 

He was further assured by an audit from RINA Accountancy in Oakland saying everything was fine. The audit, ironically, arrived that very morning.

 

The realization that he was terribly wrong came a few days later at a meeting at a San Francisco law office. There, former U.S. Attorney Charles La Bella, appointed by a federal judge as PinnFund's receiver, met with investors for the first time.

 

"La Bella showed me something," the investor said. "It was a quick-and- dirty, handwritten schedule of money coming in and out of the trust account. I knew within seconds this was a Ponzi."

 

It turned out that PinnFund never used investor money to fund mortgages. Instead, it secured lines of credit from finance companies.

 

A couple of weeks later, the investor's despair was so great that he said he pulled his car to the shoulder of Interstate 680, got out and began "looking for the right truck" to step in front of.

 

"I was at such a poor point in my life," he said. "I had 20 investors. Telling every one of them was painful. Personally, I lost $2 million, which for me is a lot of money. But my reputation .

 

.

 

. I've got to get that back." Patrice Fanghella was driving with her children on the afternoon of March 21, 2001, when her attorney called to warn her of the SEC charges against PinnFund and her estranged husband.

 

"I was frightened," she said. "Shock really wasn't the right word. It was anger and fear more than anything."

 

She had met Fanghella in Del Mar, when she was working as a fabric artist and Fanghella was a money raiser for a New York real estate company. They married in 1983 and had three children.

 

Fanghella founded PinnFund in 1993. The company had all the signs of success, including sponsorship of various charities, such as the Multiple Sclerosis Walk in San Diego.

 

"Up until the time I found out he was drinking, I trusted that he was working for his family," she said. "And we were proud of what he had done."

 

In September 1999, she and PinnFund President Keith Grubba attempted an intervention at PinnFund headquarters to convince Fanghella to seek treatment for drug, alcohol and sexual addiction, according to divorce records. Cortez, Fanghella's attorney, acknowledged that Fanghella had a drug and alcohol problem.

 

Fanghella went into rehabilitation, and was asked to leave the Scripps McDonald clinic in La Jolla after about three weeks. A few months later, Patrice Fanghella, 49, filed for divorce.

 

It was a nasty split, but fortuitous for investors. Fighting to track down her husband's assets, she and her attorneys got court orders restricting bank accounts in Barbados and the United States. They also froze PinnFund assets transferred to Cook and received an inventory of what Cook had been given – including the Orange County house, a $350,000 promise ring and several luxury cars.

 

That inventory proved valuable to authorities earlier this year when Cook violated her settlement with the SEC by attempting to keep $323,000 in jewelry and household art that she had pledged to hand over.

 

Patrice Fanghella also discovered her husband had purchased a $1 million yacht. Her attorneys got a court order to chain the boat to the dock and prevent a scheduled trip into foreign waters. The yacht was later sold by authorities.

 

But the SEC action meant her lifestyle was about to change. She had benefited – unknowingly, she says – from investor money over the years. The SEC wanted those assets back.

 

"I understand why," she said. "I'm an honest person. But it's quite a shock to find out everything you have is not yours."

 

In a deal with authorities, she gave up the family house in Rancho Santa Fe valued at more than $1 million, savings accounts, a Mercedes, a Jaguar, a Ford pickup, artwork and jewelry. In recognition for her efforts to preserve assets, she was allowed to keep a 1997 Toyota Land Cruiser, furniture and some of the family's savings. The settlement also covered some of her legal fees.

 

She is now renting a house in North County. She's not working.

 

"I did get a settlement from the SEC, and my support is coming strictly from that," she said. "It won't last too long. .

 

.

 

. "What I'm really trying to do is get my kids on track. I will probably go back into the art field, and we'll probably stay in the area as long as I can afford it, because of my kids."

As employees arrived at PinnFund's headquarters on March 22, 2001, word quickly spread about the SEC action.

 

"I was in shock," said Cho Chomjinda, 26, who worked as an underwriting assistant at PinnFund. "This was like Jerry Springer or something. This was my first job out of college. I was thinking, 'Is this what corporate America is like?'"

 

The company shut down that day. Workers were owed more than a week's wages. In addition, payroll withdrawals weren't deposited in their 401(k) retirement plans for the first quarter of 2001.

 

But unlike Enron and some other recent corporate collapses, PinnFund's retirement plans remained intact. Most employees rolled their funds into individual retirement accounts or other investments.

 

In addition, authorities say employees will get what's owed to them through PinnFund's bankruptcy.

 

"One group that has a priority, both morally and legally, are the employees," said La Bella, the court-appointed receiver. "It is very much part of our plan to get them dollar-for-dollar what they're owed."

 

The bankruptcy trustee is expected to file a distribution plan within the next two months.

 

Many employees had hard times finding jobs in a weakening economy. Moreover, they lost their health insurance.

 

Jules Jones, a diabetic, worked for the PinnFund receiver before finding another job, so she was never without employment. But she was left without health coverage, so she cashed out her 401(k) – which involved a substantial tax penalty – to pay bills.

 

Karen Thornborough also worked for the receiver, but had to get expensive individual insurance to cover the costs of a needed operation.

 

Chomjinda waited tables, lived off his tax refund and shared an apartment with his parents after losing his job.

 

"I would go to job fairs, look at the North County Career Center," he said. "But from what I could tell, there weren't that many good jobs out there."

 

After six months, Chomjinda landed a job with the North County mortgage center of a well-known bank. Jones and Thornborough also work there, as do several other former PinnFund employees.

 

Investors and former PinnFund workers praise the work of La Bella, his staff and the SEC's lead trial attorney, Thomas Zaccaro, for moving the complex case forward with surprising speed.

 

So far, La Bella has collected about $9 million, and is in the process of liquidating bank accounts and selling a condominium in Barbados that will provide roughly $2.5 million. In addition, Hillman turned over $17 million in cash and is in the process of selling off other assets.

 

Investors, La Bella and others are preparing lawsuits against accounting firms, banks, law firms and PinnFund insiders whom they say should have recognized the scam. Accountants involved include PricewaterhouseCoopers, RINA Accountancy, Levitz Zacks & Ciceric and A.V. Arias.

 

Investors think their chances to recover funds improved in the wake of the scandal involving Enron and its auditor, Andersen LLP. How much will be recovered and how long it will take, however, remain unclear.

 

Meanwhile, investors are trying to piece their lives back together.

 

In the Bay Area, the investor who lost $2 million didn't step in front of a truck. He got angry. Along with others, he's using his accounting expertise to help recover as much as possible.

 

To make ends meet, though, he's been forced to subdivide his house and rent out half of it.

 

"I've had to sell stuff. I don't go out anymore. But look, nobody is going to sorry for me," he said. "I've talked to people who had their entire life's savings, their only income, in this mess."

 

Li Juen Melton, a Virginia resident who invested $13 million, asked to take out all of her money six months before PinnFund's collapse. She said Hillman convinced her to keep her investment in PinnFund. Since she borrowed much of the money she invested, she now faces heavy debt.

 

Thomas Frame, 59, a Northern California investor and former business partner of Hillman, lost $8 million.

 

"On the bright side, I'll never pay taxes again," Frame said, since tax laws allow write-offs of losses due to fraud.

 

In Texas, the real estate developer has worked out a deal with his banks to pay off over time the money he borrowed and invested in PinnFund. He estimates that he'll have to sell 50 pieces of real estate over the next few years to satisfy the debt.

 

"It's hard for me to feel good about things," he said. "What we do now is spend most of our time making money to pay off this bank debt, and our carrot at the end is if we put in four or five years, which will put me in my mid-60s and my wife in her early 60s, we'll have managed to pay it off and still have a decent estate vs. being totally bankrupt."

 

Mike Freeman: (760) 476-8209; mike.freeman@uniontrib.com

 

 

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Pure Markets and CIT  e-Financep-it.com Nominated for eLNA Web Award

 (Lessors.com, Inc.) - Atlanta, GA - The eLessors Networking Association (eLNA)  announced  Friday the Pure Markets (http://www.puremarkets.com) web site has been nominated to receive the 2002 eLNA Web Award.

 
CIT - "eFinance-it.com" Nominated For eLNA Web Award

 

- (Lessors.com, Inc.) - Atlanta, GA - The eLessors Networking Association (eLNA) today announced the CIT - eFinance-it.com (http://www.eFinance-it.com/) web site has been nominated to receive the 2002 eLNA Web Award.

 

 

Others nominated include:

 

MonitorDaily

 

 Orix Financial Services

 

 

 WiredCapital

 

John O. Semon, eLNA Chairman, said, "The eLNA Web Award will be presented at our Annual Networking Conference to the company nominated and voted by our membership as having the most dynamic and content relevant web site serving the equipment leasing industry Each of the nominee's web sites represent the high standard of excellence we expect the eLNA Web Award to recognize."

 

 

 

About the eLNA Web Award

The eLNA Web Awards program recognizes outstanding contributions and innovations in the field of technology and finance services. The eLNA Web Award is presented annually at the eLNA Annual Networking Conference to the company introducing new concepts, techniques and content in their web design with enduring value to the eLeasing community. For additional nomination and voting information, visit http://www.elessors.com/awards.html.

About the eLessors Networking Association

eLNA represents a proactive eLeasing Industry, a national network of industry leaders and smaller pre-IPO companies and professionals from the technology, commercial finance and manufacturing business sectors. For additional information about the eLessors Networking Association, visit http://www.elessors.com.

 

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Excessive spending, debt seen as abusive

 

Ann Perry

 

 

Drug abuse. Alcohol abuse. Money abuse?

 

Yes, money abuse.

 

More than half of all Americans are struggling to control

 

excessive spending and debt, according to a new survey sponsored by Myvesta, a Rockville, Md., nonprofit organization that calls itself the nation's only comprehensive financial health center.

 

One in four surveyed are potential money abusers, says Myvesta President Steve Rhode.

 

"Money abuse is the inability to control excessive debt or spending," Rhode says. "It is a recurrent, often unconscious, use of money to overcome underlying issues. Our society recognizes that people abuse alcohol, drugs and food and that they need help to overcome those issues, but what about people who abuse money?"

 

Olivia Mellan, author of "Money Shy to Money Sure: A Woman's Road Map to Financial Well-Being," says excessive spending is a serious problem that is under-recognized and often treated as frivolous. Just consider all the women's "shop 'til you drop" jokes.

 

Mellan, a Washington, D.C., psychotherapist, says overspending can become an addiction or compulsion in our consumer society.

 

"It's indulging yourself on the surface versus nurturing your core," she says. "We're used to filling up every hole in our lives by buying things."

 

Myvesta, which offers a variety of counseling services for people with money troubles, including a residential treatment center, based its survey on the following nine statements of negative money behaviors.

 

The organization says respondents who answer yes to two or more are likely to be money abusers:

 

1. Repeated, unsuccessful attempts to control, cut back or stop excessive money use.

 

2. Experiencing a mood change (high or low) just before or after a shopping event. Some overspenders like the "euphoric buzz" after they make a purchase, while others, who shop because they're lonely and have developed a relationship with a store or a salesperson, feel let down afterward, Rhode says.

 

3. Feeling alone and spending money to feel better or improve self- esteem.

 

4. Spending money as a way to escape problems or relieve stress.

 

5. Lying, minimizing or rationalizing to conceal spending. There's no end to the kinds of rationalizing people do to justify a purchase, says Rhode, such as, "I needed that rotisserie cooker."

 

6. Carrying excessive debt as the result of the inability to stop spending money.

 

7. Losing out on opportunities such as a significant relationship, job promotion or educational or career opportunities because of money consumption.

 

8. Spending money on or with others in order to maintain relationships. One man who had been engaged for many years was finally given an ultimatum by his fiancee: either get married or break it off. But, says Rhode, the man had been spending beyond his means during the long courtship and was afraid of losing her if he told her. So he never did, and she left him.

 

9. Buying things to impress or influence others. About 75 percent of the respondents between the ages of 18 and 24 said yes to this behavior.

 

Rhode calls it the "demonstration effect," wherein members of a social group share the same values as their friends and spend as if they belong there.

 

He notes that one of the biggest obstacles to helping money abusers is denial. "Many people assume that it's normal to be unable to control their money. It's not. People get stuck because they deny that a problem exists. Denial holds them back from finding a path to peace of mind and conquering their money issues."

 

Pointing the finger at credit card companies won't help, either. "Blaming the credit card," Rhode says, "is like saying, 'Blame the guy who designed the mall.' Debt is neither good nor bad. You're just pledging your future to have something today."

 

And money issues aren't usually about money itself, he says. Overspending and debt problems are signs of deeper issues, such as relationship problems or depression.

 

That's why Myvesta has added a more "holistic" approach to money problems, in addition to its traditional credit counseling and restructuring services. Devising a repayment plan or filing bankruptcy, for example, wouldn't in the long run help someone who is a compulsive gambler, says Rhode.

 

Rhode, a former real estate developer who filed personal bankruptcy in the early 1990s, says many people mistakenly believe bankruptcy is the answer to their debt problems. They might clear away some debts, but they're likely to fall back into old habits unless they have a game plan in place.

 

Severe problems with money require professional help. "You can't talk yourself out of it," Rhode says. "You need someone who understands money abuse. It's really a very new field."

 

Mellan, a pioneer in the field, says that recovery must address the question, "What is the spending covering up?" She has new patients see her for therapy once a week and also requires them to attend the support group Debtors Anonymous, a 12-step program that is similar to Alcoholics Anonymous.

 

In therapy, she has patients identify and avoid the slippery slopes where they begin to feel tempted to overspend. "I train people to jam the trigger," she says.

 

Mellan also works with patients to learn how they can nurture their core being. They need to find something to do that makes them feel good afterward, like volunteer work, rather than bad, like shopping.

 

More information on her approach is contained in her other books: "Overcoming Overspending: A Winning Plan for Spenders and Their Partners," and "Money Harmony: Resolving Money Conflicts in Your Life and Relationships."

 

Myvesta offers a variety of services, including support groups, crisis resolution, online bill management, bankruptcy alternatives, debt management and financial coaching. It can by reached online at www.myvesta.org or by phone at (800) 680-3328.

 

Debtors Anonymous is a national, free self-help group. To reach the San Diego chapter and obtain information about member meetings, visit the group's Web site at www.dasandiego.org or call (619) 525- 3065.

 

Ann Perry can be reached at moneyperry@aol.com.

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