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Way to Go, Tiger Woods!!! Arnold Palmer, We will miss you on the circuit.
Kit Menkin’s Leasing News www.leasingnews.org Monday, April 15, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines---- Commercial Money Center---It Gets Worse. Wildwood Financial Gets Accolades Vendor Profile Request—Jim Flemming Recruiters Being “over looked?” The Week Ahead April 15-19 Thalman and Boyee earn MBA from Pepperdine University Milestone Cap. to Acquire Privately Held VELOS Capital. Silicon Valley's biggest companies report loss of $89.8 billion SJ Mercury Survey reveals staggering tech plunge Sign of the times: Cities stuck with too much office space Gerry Egan, TecSource, New Prez. NAELB-New Officers ### Denotes Press Release. Commercial
Money Center---It Gets Worse.
$19.2 Million Fraudulent Leases? out of $250 Million Portfolio
or is it higher, as others are now coming forth? Here
are reader’s comments to Leasing News: Please
do not use my name. Other employees may guess who I might be as
I was involved in ( upper management). I do know that the fraudulent
leases were bonded by ACE (under Illinois Union Insurance Co.), RLI
and American Motorists as these were the last 3 companies who wrote
bonds for CMC. I
am concerned in looking for employment that the onus of working for
CMC will be working against me. How do I tell a prospective employer that
I was not guilty of any wrong doing? I
fully expect that all of the sureties will file suits if they have
not yet done so. Knowing what I do about D&B's public records
database, I'm not surprised that they are not all showing up as yet
(D&B Public Records can be slow). If
you have access to Lexis/Nexis, you might get a better list of complaints.
Accusearch through Data Filing Service/UCC Direct might give you more
information but can be costly. I'm sure you know all of that, but
I thought I'd throw it in. Because special purpose companies were
often formed for bulk sales, a UCC search might not return accurate
data. Any San Clemente addresses showing would most likely be the
offices of Anthony and Morgan Surety and Insurance Services, the broker
who sold the bonds to CMC. The
actual bonding process was a simple one, the bonds themselves are
something of a web. In certain cases, bonds were 'wrapped' when one
company purchased the bond from the original seller. Any changes
to the bonds were at the request of either the issuer of the bond
or the bank to whom the leases were sold. The cause for any changes
were due to various reasons including simple mergers and, in certain
cases, declining ratings on existing bonds. To my knowledge the list
of bonding companies includes: Royal
Indemnity Amwest
Surety Frontier
Insurance Co. RLI
Insurance Co. Safeco ACE
America Insurance (ACE wrapped the Frontier, Royal and other bonds) American
Motorists Insurance Illinois
Union Insurance Co. (A wholly owned subsidiary of ACE) Kemper
(these bonds were purchased in the mid summer of last year but were
returned as Kemper's bond rating dropped after 9/11/01 due to the
fact that they had insured parts of the World Trade Center. This
is noteworthy as this event is THE ONLY impact that 9/11 had on CMC
although they continued to publicize that event as having caused severe
damage to CMC. That has always made me a little sick, quite frankly,
but I had no control over
this. It did bother me ******** tried to use such a tragedy to their
advantage. Kemper is not responsible for any CMC leases) Chubb
Group of Insurance Companies, in the final days, was negotiating
with CMC to wrap the entire portfolio with new bonds and relieve the
obligation of the original sureties. Once this was done, the entire
portfolio was to be refinanced by Citibank and Chase Manhattan as
a joint venture apart from any routine purchases. Once the lawsuits
started coming down, however, all parties pulled out. There
may have been a few other smaller bonding companies, but the names
escape me. Most of those bonds were later wrapped though. The list
above is an accurate list of the big players though. I
am sure Safeco and their subsidiaries are especially aggravated as
they were promised but never received relief on the bonds written
on leases for Shandoro Ventures, a gigantic CMC disaster along with
Kapco and Med-Quik. ACE,
of course, will be the biggest suit as they hold the most bonds.
ACE is not without blame, however, they did not investigate what they
were bonding and were unfortunately duped as a result. I
would like to help out, but it is not the legality that I am fearful
of, but
the fact that I worked for such a company. Please withhold my name. ------------- I
noticed that you mentioned "no major banks seem to be involved" in
the CMC story. This is not correct: Citibank is in for $50 Million and
Netbank is in for more than that amount. By
the way, the Citibank deals were sold under a special purpose company
formed solely to sell leases to Citibank. This was agreed upon by
both entities as a matter of risk management. The name of that company
was CMC Lease Funding 2000-220 L.P. You
may quote me. I have been sitting on some information since the middle
of last summer involving what I believed to be wrongdoing by the executive
management of CMC. I was not, however, 100% certain that wrong had
been committed until you reported today (Friday) that one of the signers
on the bogus deals had come forward. I was the Processing Manager
for CMC. This
story is going to get much bigger, I can assure you. Much, if not
all, of the information you have been given regarding the collapse
has been either inaccurate or misrepresented with the exception of
information you reported today ( Friday’s Leasing News. ) Dean
Ambrosini (It
takes a lot of courage to write what you have. You are being considerate of
your industry, plus trying to up-hold business ethics. I think once
the lawsuit
is noticed, other may follow, and defaults in payment will reveal
what was “real” and what was not. Leasing News will also
print information
without attribution when we can confirm it, or know or learn
about the source. It has more credence when signed, like Dean Ambrosini. editor) --------- The
actual figures on the fraudulent leases I am concerned with total
$19.22 million (confirmed figure) and were sold to various banks using
bogus companies for lessees. CMC's entire portfolio was in excess
of $250 million in receivable accounts, most of which were misrepresented
through falsified records
to the respective investors (banks) and sureties. To
my knowledge, that entire portfolio is now considered in default by
the investors and sureties. Your
Ponzi reference is, in fact, correct. CMC was using their own funds
to cover up the default in the portfolio. I was aware of this, as
were others at my level, and we were told that it was necessary to
do this in order to continue to be considered credit-worthy for future
bond purchases. The
actual leader in the lawsuits, however, was not Safeco but ACE American
Insurance Company, which wrote bonds for CMC. ACE, having 'wrapped'
or purchased bonds from other sureties in addition to having written
their own, was the insurer of the bulk of CMC's portfolio (I recall
this figure to be approximately $140 million). It
is my understanding that ACE filed a motion seeking relief from their
obligation to CMC in Federal Court this past summer (late June 2001)
and filed a subsequent lawsuit shortly thereafter having lost that
round. I believe that all of the sureties have filed similar suits. I
think that Ron Fisher, to return to that subject, was the founder
and original president of the company but was pushed out of that role
due to difficulties caused by his past dealings as the company grew.
I always found odd that he was replaced with Wayne Pirtle in that
role, however, as Wayne's background
is a much bigger mystery. (
Top Executive Insider, known to Leasing News—name withheld ) (The
first reader mentioned many insurance companies. The
UCC filings show the security party as Amwest Insurance company, San
Clemente, Inc. The debtor is Commercial Money Center. Perhaps this
were assigned
to American Insurance Company. It is evident there are several lawsuits
and insurance companies seeking payment. This
particular lawsuit appears different. The plaintiff is the American
Motorist Insurance Company of Illinois, signed by the attorneys for
Royal Indemnity Company and Safeco Insurance Company. It follows a
“third Amended Estipulation and temporary restraining order dated
February 27,2002 against CMC and CSC “ and all of its agents,
officers and employees are enjoined and restrained...from withdrawing
by any means, any bonded lease payments” and names banks accounts
and other matters. CMC closed doors on March 10. This lawsuit was
completed on March 19, signed by all parties, and filed with the court
on March 26,2002. The lawsuit does not appear-yet- in either the
CMC or Capital Markets D&B report, at this time. In the string
of leases assigned, appear
to be the alleged non-existing kiosks from a partnership reportedly involving
Ronald Fisher. The
suit is addressed to Commercial Money Center, Inc., a Nevada corporation;
Commercial Servicing Corporation, a Nevada Corporation, Wayne Pirtle,
an individual, Anita Pirtle, an individual. Capital Markets Corporation
was not named. Leasing News will seek further information on Commercial
Servicing Corporation. Perhaps there is a reader who can give us the
background on Wayne Pirtle. editor ) The
People Behind Commercial Money Center Dr.
Fisher's Chiropractic career was always a mystery to those of us at
CMC. I
had heard rumors of malpractice, including Medicare fraud, and various
other issues, but none have been confirmed. I can tell you, however,
that the ONLY "President of CMC" ever known to any employee
of CMC was Dr. Fisher regardless of what might be indicated on paper.
Not Wayne Pirtle. I
know great measures were taken to keep Dr. Fisher out of sight, however.
I had always assumed that his BK was related to his Chiropractic practice.
Given the number of "out of work Chiropractors" selling
at CMC, I have also suspected that Dr. Fisher's dealings caused some
colleagues to lose their licenses as well. We all thought
the BK involved his entire practice. (
Name Withheld) I
read the claim by CMC Director of Marketing Bill Hanson that he did
not make
any money since last June. Perhaps
he was a victim along with the rest of us in that he was also given
false information to distribute to our brokers and vendors. Bill
is a most likable person and a very kind man, but I can assure you
that he did make money and plenty of it. Perhaps not directly, but
Conrad and Associates did. (Name
With held) ----------------------------------------------------------------------------------------------- About
Leasing News--- ----- Your
piece on CMC demonstrates a great deal of journalistic maturity and integrity.
Congratulations on a very well done piece! Please
withhold my name. --- I like your classified ads, and use them. A very good source for leasing sales people. Perhaps you could shed some light on where your publication is distributed so that we know who will potentially see our classified ads. Thanks again, Tom Gerner TGerner@IFCCREDIT.COM VP Human Resources IFC Credit ( to inform, to educate, to entertain, to help ) Do it better, don’t run away just because they do it ) We estimated we have 5,000 readers. Many read us “at home”, some are doubled listed and may also read us at work. I would say there is an “age” factor. We know this from the ISP address. The older the person and the higher up in the scale of a leasing company, the less they are interested in the internet, e-mail, or “inside news.” This does not apply to entrepreneurs or smaller companies who compete with the larger companies. Many of them are quite computer and internet “ready.” We have a real cross section from brokers, collectors, managers of departments, salesmen, sales managers, sales representatives, and even attorneys. Our first classified ad was for an attorney by the way, who got a leasing company job through Leasing News. We have had operations people, collectors, and other people involved in the industry find job , therefore they must be readers. I think they all care about their professional, want to succeed in life, are concerned about others, want to know more about what is going on, and have a very curious mind. We don’t just automatically print any press release sent to us and particularly . We print a lot of controversy and things you will not read anywhere else about the leasing industry. We are not driven by advertisers or charge for our services. You won’t see a full press release that Boeing leased five new aircraft. ( sorry ). Most of the press releases are so phony, they could be comedy. They are quite one sided, at best. One of the things I learned in starting this, most readers want it delivered to their e-mail address. I originally thought they would like the html, cleaner layout, that they could print or adjust to a newspaper format or click to the url mentioned. They like it delivered. Thus the reason I plug the classified in the e-mail news edition. By the way, we never intended to have a classified section, it was requested by the readers. It took several months of the requests for us to act as it is a lot of work to maintain. April 17 will mark out two year saving these news stories, and in The Day In American History, we will mark the anniversary. _______________________________________________________ Wildwood
Financial Gets Accolades I
did go through the program with Bob (Baker ) and Wildwood back in
January. http://www.wildwoodfinancial.com I
definitely believe that the experience and program are worth every
penny. I am closing my first two deals on Monday, one for $98,000
and one
for $13,000. They have walked me through every phase of the transactions well.
Your
newsletters have been helpful, but also a little frightening. After
going through the program at Wildwood and getting rolling on trying
to sell,
I would get your newsletter and read about the demise of yet another funding
company or leasing company. I would think to myself, "My god,
what have
I gotten myself into". But after three months of doing this,
I really feel
that I will be able to make a nice living at this. Getting
companies to give me one shot at their leasing business has been the
hardest thing. But the ones that have, really like the fact that I
can give them a little bit better customer support than the big guys.
That has been my biggest selling point. I
really appreciated your feedback when I asked for it, and I am even more
appreciative of the fact that you checked back to see how things turned back.
Your reputation as a great guy has been solidified as far as I am concerned. Thanks
again and I hope to meet you at one of the funding retreat or
conferences. Sincerely Scott
P. Chrismer Executive
Leasing Professional Pivotal
Financial Group, LLC Tel:
412.471.9150 Fax
412.471.9151 Email:
scottc@pivotalfg.com (Leasing
News recommended Wildwood Financial, and the timing was right
to get in on the bottom floor, as major change is happening again in
the industry. Those educated will survive, and the lucky ones like Scott
Chrismer will do better. What is that old say,” The harder I work,
the luckier I get.” (P.S.
After thirty years in this business, I still ask,” My God, what
have I
gotten myself into.” editor) ________________________________________________________________ Vendor
Profile Request—Jim Fleming I
would like to respond to "name withheld" who expressed concerns
over GE's insistence on vendor profiles. I believe this is a trend
that is not limited to GE alone, for many funding sources are becoming
increasingly reliant on vendor profiles and vendor investigations.
If one receives these vendor profile requests on face value alone,
then the obvious reason behind the funding source's request is that
they are entitled to know who they are doing business with. After
all, it is their money. The fraud monster is always waiting in the
shadows, and funding sources are taking pre-emptive measures to minimize
that risk. The
question I would pose to "name withheld" is, that (1) if
speculation has been circulating about GE's motivations ever since
their acquisition of CPLC, and (2) they then finally whittle their
broker lists down to a select few, (3) move their operations to a
retail center , (4) well-publicized stories of their predatory nature
continue, and (5) you are feeling uneasy about recent directives,
then why are you still doing business with them? Jim
Fleming National
Business Credit nationalbusinesscredit@yahoo.com -------------------------------------------------------------------- Recruiters
Being “over looked?” As
President of Executive Solutions for Leasing and Finance, Inc., which
is an Executive Search firm that has specialized in Leasing placements
since 1990, I have seen recessions and bountiful times come and go
in a fairly cyclical way over the years. Banks get into leasing and
then exit. Companies centralize and then decentralize. They outsource
and then bring services in house. Consolidations occur in a frenzied
manner, or slow to a comprehensible level. None of this is news.
What I cannot understand is how the Hiring community in the Leasing
industry seems to have completely lost all understanding of the services
professional and diligent recruiters provide. Just because there
are many folks looking for positions now, that doesn't mean that companies
are acting intelligently or saving money by not paying fees to recruiters.
Getting
a resume of a candidate is the most basic and simple part of the process.
It's what is done with that resume that earns a good recruiter a fee.
Someone has to spend a lot of time reading all of the resumes received.
Then, based on a one-dimensional piece of paper, decisions have to
be made as to who warrants a closer look. Recruiters
(good ones) have extensive info on candidates to augment resumes.
Or, they get it BEFORE deciding a candidate's appropriateness. Secondly,
recruiters have historical perspective. Unfortunately,
people are not always totally "accurate" in their resumes
or claims they make. Recruiters spend 10 hours a day every day speaking
with people in the Leasing industry, and have lots of info about lots
of people and companies that is crucial.
Finally, recruiters who do their jobs properly facilitate the process
providing valuable feedback, helping to negotiate packages, doing
reference checks, and a myriad of other things.
The reason we spend 10 hours a day every day doing this is because
that's what it takes. It's a full time job. If management is mandated
by their company to assume the role of sourcing, screening, and investigating
candidates on their own, then they are NOT doing what they were hired
to do. The
perceived savings the company realizes in not paying a fee is really
an expense.
If companies do the math and figure out what their management earn
per hour and what they could accomplish in the many hours a successful
search requires if they were applying their efforts to responsibilities
they were hired to perform, they would realize they have lost more
money than they saved. The
more candidates there are on the street, the GREATER the need for
assistance. It's even more critical to have the time and resources
to select the best from a large pool. The more people available,
the harder the selection becomes.
If the recruiters companies have been using have not performed beyond
emailing a resume, then clients shouldn't become recruiters themselves.
They should engage a firm that earns their fee, and then allow them
to do what they know how to do better than anyone else. Teri
Gerson, President Executive
Solutions for Leasing and Finance, Inc. 908.654.1550
F 908.654.1553 terigerson@exsolutions.com --------------------------
The Week Ahead April 15-19 Washington Post April 15 Monday Deadline for filing 2001 income-tax returns. American Enterprise Institute holds forum on tax policy featuring White House adviser Larry Lindsay and Rep. Bill Thomas, chairman of House Ways and Means Committee. Treasury Secretary Paul O'Neill speaks on taxes at Economic Club of Grand Rapids, Mich. Bank of America, Corning, Eli Lilly, Fannie Mae, Sprint and Texas Instruments issue quarterly reports. April 16 Tuesday House Financial Services Committee meets to mark up legislation on accounting industry reforms. Caterpillar, Coke, Delta Airlines, General Motors, Gannett, Johnson & Johnson, Motorola issue quarterly reports. Economic indicators: March housing starts, consumer prices, industrial production April 17 Wednesday Fed Chairman Alan Greenspan testifies before Joint Economic Committee on the economy. Two House committees, Ways and Means and Energy and Commerce, hold hearings on adding prescription drug benefits to Medicare. HHS Secretary Tommy Thompson is scheduled to present administration's views. IMF Managing Director Horst Koehler addresses National Press Club. General Dynamics, IBM, J.P. Morgan Chase, Nextel, Northrop Grumman and Pfizer issue quarterly reports. Economic indicators: February trade balance April 18 Thursday Senate likely to hold key procedural vote on oil drilling in Alaska's Arctic National Wildlife Refuge as part of consideration of energy bill. House votes on extending Bush tax cuts after 2009. Senate Labor Committee holds hearing on Bush administration proposal for voluntary ergonomic standards. American Express, Marriott, McDonald's, Merck, Microsoft, Nortel, Nucor, SBC and Sears issue quarterly reports. Economic indicators: Leading indicators. ________________________________________________________________ Thalman
and Boyee earn MBA from Pepperdine University
Thalman
Financial, Inc. announces that Andrew Thorn, President, member of
the Leasing News Advisory Board, Steve Herring, Vice president of
Marketing and David Bovee Vice President of Business Development have
each earned their MBA from the Graziadio School of Business and Management
at Pepperdine University. Pepperdine
University offers both fully employed and executive MBA programs. They
attended a division of the executive MBA program known as P/KE which
is designed
from Presidents and Key Executives. Classes
were held throughout the World in China, Singapore, Viet Nam, Mexico,
Washington DC, San Francisco and Seattle. A highlight of the class was
attending class in the White House with key presidential staff members and
the Federal Reserve building where the class actually was held where
the Federal
Board holds its meetings. The class also visited Microsoft and met then
President and COO Rick Belluzzo. Perhaps
the most famous graduate of the Graziadio Pepperdine P/KE program
is Businessman
Thomas E. Burnett, Jr., who was one of the heroes killed aboard United
Flight 93 that crashed in Pennsylvania on September 11th. The
editors of US News & World Report have ranked Pepperdine University's Graziadio
School of Business and Management among the best business schools in
the nation. ####
######################################### ################# Milestone Capital Sign Letter of Intent to Acquire Privately Held VELOS Capital Corp. FAIRFIELD, N.J--Milestone Capital
-- Acquisition expected to jump start leasing program and
dramatically increase revenue
Milestone Capital (OTCBB:MLSP) announced Friday that it has signed a letter of intent to acquire VELOS Capital Corp. for a combination of stock and cash.
VELOS is a company which primarily engages in commercial leasing, employing several industry veterans with substantial leasing experience. VELOS also has established credit arrangements with several major financing organizations. The transaction is expected to close within 60 days.
Commenting on the transaction Chuck DeMory, Milestone's CEO said, "We are excited with the potential to acquire an experienced team of leasing professionals, the high profile clients they represent and the banking relationships they have established.
This should accelerate the growth in our newly formed leasing subsidiary."
Milestone Capital, Inc. in early January completed a reverse acquisition in which it acquired the assets of EliteAgents, Inc. EliteAgents (http://www.eliteagents.com) was established in 1999 as a mortgage banker and has spent the last three years and over $6 million developing several sophisticated computer systems to implement its strategic objective. One of these systems, for which a patent has been applied, allows a non-experienced individual to easily qualify a borrower for a mortgage and to evaluate offerings from numerous financial institutions to find the one which best fits the borrower. Once determined, the system allows the originator to obtain the necessary information to initiate the mortgage as well as perform the necessary steps to be eligible to receive a portion of the commission.
Experienced loan officers utilize this system to develop a network of realtors, financial planners, accountants, attorney's, home builders and other professionals to originate mortgages and receive a portion of the commission which this network generates in addition to their own commissions.
Howard Conyack, Jr., Executive Vice President of Milestone and head of the Mortgage subsidiary said, "Our loan officers have found that the approach is well received by the professionals who join our network in that it is easy to utilize and very effective in handling their client requirements. These loan officers see how our approach will greatly enhance their future earnings."
Mr. Conyack added, "Our objective is to be able to offer additional financial products such as leasing to this network of professionals and eventually be a full service financial marketing organization. Our sophisticated technology, which we believe to be unique in the industry, coupled with the experience of the loan officers and the network of professionals they develop will result in a very powerful organization which we expect to take nationwide."
Statements in this press release other than statements of historical face are "forward-looking statements." These statements relate to future events or the Company's future performance. Such statements are subject to certain risks and uncertainties, including fluctuations in interest rates, demand for mortgages, and other risk factors identified from time to time in the Company's filings with the Securities and Exchange Commission that could cause actual results to differ materially from any forward-looking statements. These forward-looking statements represent the Company's judgment as of the date of the release. The Company disclaims, however, any interest or obligations to update these forward-looking statements.
CONTACT:
Howard Conyack, Jr.
Executive VP
800/848-5442
or
Donald Radcliffe
Radcliffe & Associates, Inc.
212/605-0100
SOURCE: Radcliffe & Associates, Inc. ####
########################################## ############### Silicon Valley's biggest companies report loss of $89.8 billion
SAN JOSE, Calif. (AP) -- The Silicon Valley's biggest companies lost more money last year than they earned in the previous eight years combined, according to a newspaper report. "There's not a sector, at least in recent memory, that has collapsed like this," said Donald Strazsheim, former chief economist at Merrill Lynch. The San Jose Mercury News' annual survey of the 150 largest publicly held companies in the Silicon Valley shed new light on the worst year in the area's recent history. The companies lost a combined $89.8 billion in 2001. Sales plummeted by $55 billion, the first time revenues failed to grow since the survey began in 1985, and 96 of the companies lost money. As orders for computers, software and Internet equipment vanished, companies canceled long-term projects, laid off employees and left millions of square feet of office space idle. The year's winners were non-tech companies -- especially real-estate companies, who reported the highest operating profit margins. Economists and accountants are now trying to figure out how much of the reported losses stem from weak business conditions and how much they reflect temporary but costly mistakes of the 1999- 2000 technology bubble. Last year's losses are stuffed with write-offs, restructurings and charges connected with errors such as paying too much for an acquisition. To sort out bad economic conditions from bad business decisions, the Mercury News examined the past 10-year history of the area's top 150 companies from two points of view: net profits and profits from ongoing business operations alone. The comparison shows that t |