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August 18, 2000
Metrolease Ceasing Operations This story has been floating around the internet for several months with both UAEL and NAELB Standard Committees looking into alleged charges of "double funding" allegedly between Lasalle Bank and Textron; alleged leases not being funded and brokers not receiving commissions. No one has wanted to go on the record about what is going on, and Metrolease has never returned e-mail, telephone calls, or faxes regarding this. The rumor was the company would be going out of business. This is from a highly regarded funding source: " I spoke to John Blazek last week and confirmed that they are closing down operations and are running under a skeleton crew. The owner has already begun the operations of another company operating as a funding source....name has not been disclosed. John will help close operation." John Blazek is the vice-president of the company. He formerly was president of Stratford Leasing, which he also closed down. 38 Leasing Companies Major Changes American
Business Leasing ( gone ) *** As you should be aware, USA Capital has filed bankruptcy and is essentially out of business. The case was originally filed as a Chapter 11 (reorganization) on September 21st and the case was converted to a Chapter 7 (liquidation) on May 18th. If any of you have claims for advance deposits, residuals, etc. the bankruptcy case is in the US Bankruptcy Court for the District of Colorado, Chapter 7 case number 00-14495 SEB. I have been told that there are a few scattered bankruptcy cases out there that hold that the trustee had to return the advance fees to the Lessees and could not consider those fees part of the bankruptcy estate, but that the issue has not been raised with much frequency. If you know of anyone that is caught in the middle of the advances and the bankruptcy filing, then advise them to obtain Denver counsel ASAP to file a proof of claim.
Joe Bonanno, NAELB Legal Counsel Reaction to Metrolease Closing Down "I was extremely disappointed when I heard what happened with Metrolease. This is the kind of incident that makes all of our lives miserable. This kind of occurrence is what prompted the UAEL to form an ethics task force, which I have now appointed. That task force is looking into the formation of a "Leasing Industry BBB" that will put some teeth into the enforcement of our code of ethics and allow us to take the kind of preventive measures that may keep our funding sources from getting burned and our broker/lessor members from constantly having to overcome the image that is conjured by these incidents." Bob
Rodi
The United Association of Equipment Leasing has created an "Ethics Task Force." Chair: Past Pres. George Davis, Attorneys: Steve Jenkins, Trish Rademaker Coston, Victor Harris, Troy Molitor, Manifest Group, Candice Conner, Albuquerque Lease Exchange, Jim Merrilees, Textron Financial and Rob Yohe. Our legal members will steer the committe through any legal pitfalls. The committee will meet and present recommendations at ACE in Orlando. These will be taken up by the board of the UAEL and actionable items will be voted on at the November planning meeting. " If we can keep to the timeline on this we would hope to have this completely implemented by early 2001." According to UAEL President Bob Rodi. " I will have a full press release on this for you next week. The UAEL board is very serious about this and ready to commit the resources of the Association to controlling this problem." Bob
Rodi More fraud charges filed against LeasX Bill Morlin/The Spokesman-Review A high-tech California-based tele-communications company was bilked out of $965,000 by two Spokane men whose leasing firm promised investment capital, a new indictment alleges. The company, 21st Century Telesis Inc., of Costa Mesa, Calif., is the newest company added to a list of businesses that investigators say were victimized by LeasX Inc. Officials at 21st Century Telesis in Orange County would not comment on the loss and referred questions to their attorney, Michael Palmer, in San Diego. He wasn't available for comment. LeasX and its founders, Michael David Booth and Louis Robert Bories, are now accused of swindling five companies out of $1,969,000. Booth, 37, and Bories, 28, were arrested by the FBI in January on an initial eight-count indictment. The investigation continued as Justice Department investigators and a federal grand jury issued subpoenas for various bank and financial records of LeasX. The grand jury returned a third, superseding indictment on Tuesday. Bories and Booth now face 107 counts. They are charged with 11 counts of wire fraud and 94 counts of money laundering. They also are accused of conspiracy to commit wire fraud and money laundering. A forfeiture count could fix a judgment against the pair, if they are convicted. Booth, previously convicted of a similar investment scam in California, remains in the Spokane County Jail without bond. Bories is free on a $50,000 bond. Their trial in U.S. District Court is scheduled for Sept. 13. Investigators remain perplexed about what happened to almost $2 million in cash raised by LeasX between January and September of 1998. FBI agents investigating the fraud case have recovered only $1,951 from Bories and seven pieces of jewelry from Booth's girlfriend. Assistant U.S. Attorney Tom Rice said the ongoing investigation revealed the loss by 21st Century Telesis Inc. The California company wired $500,000 to the LeasX executives on Sept. 2 after Booth and Bories said LeasX would provide a $375 million "master lease." "Eventually, 21st Century Telesis paid a total of $965,000 to the defendants," the new indictment alleges. 21st Century Telesis is involved in the development and marketing of personal access communications systems. The technology -- the next generation of cell telephones -- will use inexpensive handsets and low-powered micro cell transmitters in office buildings and neighborhoods . "It promises to bring wireless calling to the masses," 21st Century Telesis says on its Web site. The company obtained government licenses last year to install and operate personal communications systems in 27 markets in Indiana, Illinois, New York and Pennsylvania, with about 8 million people. Bill Morlin can be reached at (509) 459-5444 or by e-mail at billm@spokesman.com. www.leasingnews.org |