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Kit Menkin’s Leasing News www.leasingnews.org Thursday, January 10, 2002 Headlines---- Leader of Multi-Million Dollar Leasing Fraud Scheme Sentenced to Prison No Break in Definition of Taxable Software Issues Flex Lease, Plano, Texas Bulletin Board Complaint Health Insurance –for small businesses Helios Marketing / Communications Announces "Verticalize!" Tyco Capital Renames CIT Small Business Lending Corporation WiredCapital Names Richard Stubblefield to Board Of Directors Retailers are expected to continue with zero-percent financing
deals
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The moderator and “speaker” have the ability to expel you for improper behavior or language. They may give you a warning. Or they may just expel you. You will not be able to enter back into the program for one hour, if expelled. It will expel your IP address. We also can block IP addresses permanently. News reserves the rights to expel anyone from participation without notice, if need be. If the program is in an “interview” mode, the speaker receives the questions and decides which ones he would like to answer. Your question or response will not appear unless he chooses to do so. The moderator also has this ability. This mode gives the speaker more control, meaning eliminating intrusions or confusions. The speaker may be in the regular mode and can move to the interview mode. You may scroll back for anything said, as the screen is not erased until the end, or at the call of the moderator or staff user. When you want to leave the room, exit, go to the tool bar for room and choose “ leave/exit.” We will be making adjustments after we all learn how this works, hopefully to bring a Leasing News Maker once a week for up to 500 readers. Re: Health Insurance –for small businesses Tell Mr. Leslie that he'll always have a problem as long as he has a "group" of less than 10 people. In our 15 years in business our corporation (my wife and I) have had several instances of insurance companies ceasing to do business in Arizona or ceasing altogether. Then you have to start the search for insurance all over again, and the older you get the harder it is to qualify (to put it in credit terms, the older you get the lower your "score") Or, the insurance company that you do have raises your premium 20% or 30% per year. I would suggest that you find a local insurance agent (broker) who LIKES to do health insurance, and can help you shop the market. We are a very few years away from Medicare, and currently pay about $9,000 per year for health insurance for this corporation's employees (a group of two). This year's rates, recently announced, are only about 3% higher than last year. This insurance is with HealthNet (formerly Intergroup), and is our choice from about 20 different plans that they offer, and gives very comprehensive coverage. Again, we got a lot of help from a very capable insurance agent that we have known for years (name on request - she is in Tucson) There are a lot of parallels between qualifying for health insurance and qualifying for an equipment lease. Are you an "A" risk or are you "B" or (God forbid) a "C"? Good luck! Charlie Meaker Lease Financing, Inc. 800-478-2330 - 520-398-2650 - Fax 520-398-2652 Since 1987 - Financing for Business Equipment and Modular Buildings ##### #################################### ################# #### ####################################### #################### Leader of Multi-Million Dollar Leasing Fraud Scheme Sentenced to Prison and Ordered to Pay More Than $12.5 Million in Restitution, Reports U.S. Attorney
BOSTON, / -- A Framingham man was sentenced today in federal court to a term of imprisonment and ordered to pay more than $12 million following his conviction for his involvement in a massive leasing fraud conspiracy. United States Attorney Michael J. Sullivan and Charles S. Prouty, Special Agent in Charge of the Federal Bureau of Investigation in New England, announced today the sentencing of STEPHEN CHAN, age 30, of Framingham, by U.S. District Judge George A. O'Toole to 4 years and 3 months' imprisonment, to be followed by 3 years of supervised release. CHAN was also ordered to pay restitution in the amount of $12,596,298. CHAN pleaded guilty on September 3, 2001 to one count of conspiracy to commit fraud and one count of mail fraud. The Court found that from January, 1997 through August, 1998, CHAN and others, in order to obtain loans, falsely represented to lenders, including GE Capital corporation, that two companies called Multinational Systems Corporation ("MSC"), located in Boston, and Advanced Risc Corporation ("ARC"), located in Marlborough, were multi-million dollar enterprises. In fact, the Court found, these "companies" were essentially sham enterprises that conducted little business other than to attract lease financing from the lenders. From approximately Spring, 1997 through 1998, several private financing companies loaned MSC and ARC, which appeared, at least on paper, to be highly successful and lucrative businesses, in excess of $20 million to fund the lease/purchase of computers, furniture and related equipment. The loan packages supplied to the lenders by ARC and MSC were replete with false statements and misrepresentations. Once the lease financing had been arranged, ARC/MSC were to purchase the equipment specified in the leases from independent venders. In fact, some of the vending companies, including Finishing Impressions which was originally owned by another individual and then purchased by ARC, were not independent of ARC/MSC. Typically, once these venders received the loan funds, they returned a substantial percentage of the money to CHAN, through ARC/MSC, and retained a percentage of the loaned funds. The Court further found that as a result of the fraud scheme, the lenders suffered losses of over $12 million. CHAN oversaw all of the leasing activities at ARC and MSC and was largely responsible for drafting and distributing the false leasing packages and providing lenders with misleading materials designed to lure them into believing that MSC and ARC were highly successful disaster recovery companies. The fraud ended when the FBI searched ARC's offices in August, 1998, pursuant to a federal search warrant. The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Allison Burroughs of Sullivan's Economic Crimes Unit and Assistant U.S. Attorney Alex Whiting of Sullivan's Public Corruption and Special Prosecutions Unit. SOURCE U.S. Attorney CO: U.S. Attorney ST: Massachusetts #### ########################################### No Break in Definition of Taxable Software Issues Katherine Breaks reports in E-TaxNews Flash from KPMG that no consensus was reached during a Tangible Personal Property (TPP) subgroup teleconference for the Streamlined Sales Tax Project (SSTP) on Tuesday, January 8th. Breaks notes the SSTP subgroup has not reached consensus on whether prewritten software will be included in the definition of tangible personal property. This deliberation is expected to continue during a TPP Subgroup meeting in New Orleans on Thursday afternoon, January 24. The outcome of this debate will most likely determine these provisions in the model legislation due out this summer and could significantly affect the tax base of many states that tax TPP but not intangible property or most services. Dennis Brown Flex Lease, Plano, Texas Bulletin Board Complaint December 18, 2001 Our client (name withheld) has completed documents with Flex Lease in Plano, Texas. On the go-ahead of Jeff Wetter, President of Flex Lease, we ordered and installed the software expecting payment upon installation. We have been calling him since December 5 for this payment that is due to us. He rarely returns calls or emails but the few times he has called was to give us three false promises of payment dates. Last Wednesday he told us the check would be delivered to us on Monday (Yesterday). I called twice on Friday to confirm that everything looked good, but he didn't return my calls. I called three times yesterday; leaving voice mails, and sent a follow up email. He didn't take or return any of my calls yesterday or send me a reply email. I see he checked email on Friday and even replied to someone on your site on Friday. He appears to be avoiding my emails and phone calls. I called him this morning; I had to leave another voice mail, and told him I would advise our client if I didn't hear back from him by noon. Noon has come and gone. I advised my client that she would be liable for the payment because Flex Lease is not returning calls or sending a check. She in turn has called him and he didn't pick up the phone for her either. I just spoke with her and he hasn't returned her call yet, either. What do you know about this company? Do they fund the leases themselves? Are they always so evasive? This is our first and only encounter with this company. I know we will never work through them again because of their lack of enough professionalism to return a phone call or fund a check for that matter. Just to let you know, I've tried his assistant Janie each time also in case he was just busy, except yesterday and today. But with the pattern, it just appears he is choosing not to take or return my calls.
Best Regards, Alicia Paul, NCR Office Manager Sim Crest, Inc. 12222 Merit Dr., Suite 1850 Dallas, TX 75251 972-770-4651 Leasing News attempted to contact Flex Lease, Plano, Texas to confirm, deny, or explain their side of this complaint. We sent several e-mails. Here is one of them: Re: Bulletin Board Complaint We started this process with this complaint and have been trying to resolve this as it appears to be a legitimate complaint. If they have delivered and installed and the lease was signed off on December 5, they are concerned when they will be paid. I don't know if you are a broker on this and it was assigned elsewhere, but am trying to resolve this peaceable. . We next received.
December 20,2002 I heard back from Jeff Wetter, Flex Lease, today. Here is an overview of our conversation. He was less than professional, again. He asked me why I was harassing him. I said "I will not take blame for your lack of communication.", he said "shut up and let me say one damn thing." I said, "You will not address me like that." Then he raised his voice and said quite nastily, that we are the lowest on his list of priorities now and he doesn't t intend to give us payment any time soon nor does he care if we get payment at all. I told him, "Do not raise your voice at me. It's this whole lack of professionalism that is seeing to the fact that you will never work with us or any of our clients again." He said, still in a loud voice, "I don't give a damn! You listen to me!" I said, "Who do you think you are? I will be hanging up now." Click.
I m really interested in knowing what you know about this person and this company. In the five years that I have worked with leasing companies to finance software for my clients, I ve never even once had an experience like this.
Best Regards, Alicia Paul Office Manager SimCrest, Inc.; Leasing News continued to follow this, asking for a comment to the Bulletin Board Complaint. In following up the original complaint, we informed Flex Lease, Plano, Texasing that we were going to state they had "no comment". in the Bulletin Board Posting: January 10 You obviously feel very empowered in your position. Once again, for the record, my comment/response to the vendor's complaint is that I do not comment to LeasingNews.org. I feel that it is none of LeasingNews.org's business. Any of your reader's are welcome to e-mail me if they would like my side of this complaint. This is my comment, do not print that I have no comment. All you have to do is print the vendor's complaint then state, "Jeff Wetter at Flex Lease stated that he does not comment to LeasingNews.org as he feels it is none of our business. He stated that readers can e-mail him directly if they would like his side of the complaint". There, I've written it for you. Please publish it like this. Couldn't be easier for you. I you publish the complaint then state that I have no comment, your readers will interpret this as a defacto admission of guilt on my part. This will harm my business and my reputation. My competition will use the article against me to win lessees and vendors we both compete for. Please don't do this to me. Why are you so afraid to print that I do not comment to LeasingNews.org? Afraid of others doing the same? Afraid of losing illegitimate power? I have saved every e-mail between us. They make it very clear that I have told you repeatedly what my comment and response to your inquiry is. If you publish the complaint then state that I have "no comment" as you say you intend to do, I will sue you for intentionally attempting to defame my business. Thank you. Jeff Wetter jwetter@flexlease.com www.flexlease.com #### #################################### ####################### Helios Marketing / Communications Announces "Verticalize!" PR Program for Commercial Lenders and Lessors Program Gives Lenders and Lessors the Tools, Strategies and Expertise to Gain Exposure in Vertical Industry Media Markets Moorestown, NJ - January 10 - Helios Marketing / Communications announced the launch of a new public relations program, "Verticalize!" The program enables commercial lenders and leasing companies to gain media exposure in vertical industry markets, as well as build an internal public relations function. Holly Winzler, president of Helios Marketing, explains, "Within trade publications, there's a real editorial need for financial education that isn't being met. Editors want to know: how can our readers use various financial tools to optimize their businesses and succeed in a difficult economy? Lenders and lessors just aren't taking advantage of the opportunity for editorial coverage. It's too bad, because this type of exposure is the ultimate in credibility and value. Yet many organizations can't -or won't -- justify the cost of retaining a public relations firm on a monthly basis. Verticalize! offers commercial lenders the best of both worlds. We'll help them set up a public relations 'department' and show them how to develop positive relationships with the vertical industry media." Winzler continued, " We'll show companies how best to leverage their intellectual capital for maximum exposure in industry publications - whether it's agribusiness, high-tech, healthcare, manufacturing and anything in between." The "Verticalize!" package, which is customized for each client, addresses the following issues: * Why pursue vertical media? * Debunking the "If our competitors read this, they'll steal our customers/ideas/employees" myth * Crafting messages and positioning for various audiences * The opportunity for coverage * Developing coverage tools (news releases, surveys, bylined articles, case studies, etc.) * How to "repurpose" content for editorial purposes * Creation of media and industry influencer databases * Creating editorial and speaking opportunity plans * Development of supporting materials such as press kits * Media coaching and training for key spokespeople * Why non marketing-driven PR is important, too * Agency or in-house? The case for smart partnering; and doing it yourself for best results About Helios Marketing/Communications Helios/ Marketing Communications is based in Moorestown, NJ. The firm, founded in 1993, offers a broad scope of business-to-business marketing communications services including: strategic planning, creative development, competitive intelligence, conference and editorial development, marketing research, public relations and writing workshops. The firm's clients have included Advanta, Dow Jones, DuPont, The CIO Forum: Financial Services, Harte-Hanks, Morgan Stanley Dean Witter, Richmond Events and UPS Capital. For more information on Outsource/Insource, contact Helios Marketing/Communications at 856-234-2700 or heliosmc@aol.com. ### -------------------- Holly A. Winzler, President Helios Marketing/Communications heliosmc@aol.com vox: 856-234-2700 fax: 856-802-9211 snail: 214 West Main Street, Suite 202, Moorestown NJ 08057 #### ################################ ##################### Tyco Capital Renames CIT Small Business Lending Corporation
Announces New Web Site To Facilitate Loans For Women-Owned Businesses LIVINGSTON, N.J., / -- Tyco Capital Corporation, a subsidiary of Tyco International Ltd. (NYSE: TYC, LSE: TYI, BSX: TYC), officially renamed its Small Business Lending subsidiary Tyco Capital Small Business Lending Corporation (Tyco Capital SBL) today. In an additional move to broaden its reach to women-owned businesses, Tyco Capital SBL unveiled a new Web site -- www.LoansToWomen.com -- to facilitate loan submissions by women-owned businesses, according to John Canning, President of Tyco Capital Small Business Lending Corporation. This name change is a further outgrowth of the June 2001 acquisition of CIT by Tyco International and CIT's recent name change to Tyco Capital. "The decision to change our name is a reflection of our strategy to become an even more integral part of the Tyco family," said Canning. "With our leadership team, sales force and processing centers remaining in place, this name change can only strengthen our position as the nation's Number One SBA lender. The creation of our LoansToWomen.com Web site should enable us to broaden our reach to women-owned businesses." "During 2001, Tyco Capital SBL provided hundreds of loans to women entrepreneurs and their businesses, amounting to nearly $200 million in fundings. With a new Web site tailored to this target group, we believe we can significantly increase the number of loans we'll process in 2002, " added Canning. According to the Center for Women's Business Research, by 2002 the number of privately held, majority owned firms by women will grow by 14 percent (compared to 7 percent nationwide) to reach 6.2 million. "Launching this targeted Web site should enable us to tap into a larger portion of this important segment of the small business community," Canning added. About Tyco Capital Small Business Lending Corporation Tyco Capital Small Business Lending, a subsidiary of Tyco Capital, offers Small Business Administration (SBA) loans. Recognized as the nation's number one lender by the U.S. Small Business Administration (SBA) for total loan volume, the company offers franchise financing, construction lending and equipment financing through a network of field representatives. The company's Web site and online SBA loan application are located at www.smallbizlending.com About Tyco Capital The Tyco Capital family of companies are subsidiaries of Tyco International Ltd. Tyco Capital is a leading, global source of financing and leasing capital and advisor for companies in more than 30 industries. Managing more than $50 billion in assets across a diversified portfolio, Tyco Capital empowers many of today's industry leaders and emerging businesses offering vendor, equipment, factoring, consumer, and structured financing capabilities. Tyco Capital operates in the United States and Canada with strategic locations in Europe, Latin and South America, and the Pacific Rim. About Tyco International Ltd. Tyco International Ltd. (NYSE: TYC, LSE: TYI, BSX: TYC) is a diversified manufacturing and service company. Tyco is the world's largest manufacturer and servicer of electrical and electronic components; the world's largest designer, manufacturer, installer and servicer of undersea telecommunications systems; the world's largest manufacturer, installer and provider of fire protection systems and electronic security services and the world's largest manufacturer of specialty valves. Tyco also holds strong leadership positions in medical device products, financing and leasing capital, plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2001 revenues in excess of $36 billion. ##### ################################ ###################### WiredCapital Names Financing Veteran, Richard Stubblefield, to Board Of Directors
IRVINE, Calif., -- WiredCapital, Inc., a provider of enterprise software solutions to automate the front office operations of equipment leasing and financial service organizations, announces the appointment of Richard Stubblefield, Founder and Managing Director of Lighthouse Capital Partners, to the company's board of directors. Mr. Stubblefield brings to WiredCapital's board significant insight and perspective in all phases of the equipment finance business. "Having managed large financial transactions my entire career, I am all too familiar with the difficulties and inefficiencies of managing the front office operations of a financial services business," said Rick Stubblefield. "The many disparate systems make obtaining a real-time unified view of all mission critical transaction, customer and portfolio performance information next to impossible. Providing a collaborative workflow platform to automate the origination and management of these processes, while also providing a single real-time view of key information is an enormously complex task, but I'm convinced that WiredCapital is the right platform at the right time. I am excited to work with such an incredibly talented team at the forefront in financial front office automation." Mr. Stubblefield is responsible for managing the day-to-day operations at Lighthouse Capital Partners, a firm he co-founded in 1994. Lighthouse is a leading provider of debt related products to early stage venture capital backed startup companies. Prior to co-founding Lighthouse, Stubblefield spent 10 years at Comdisco most recently as the Senior Vice President responsible for the West Coast activities of Comdisco Ventures. Earlier, Stubblefield spent 5 years at GATX Capital in a variety of operational and management positions. "We continue to solidify a world-class Board of Directors and are delighted to welcome Rick to our Board," said Kevin Riegelsberger, president and CEO of WiredCapital. "His many years of experience in equipment leasing and financial operations combined with his expertise in venture capital finance and technology investment will provide invaluable insight both operationally and strategically." About WiredCapital WiredCapital, based in Irvine, Calif., develops enterprise software solutions for financial service organizations that enable front office salespeople, credit analysts and contracts managers to identify new revenue opportunities and quickly convert them into sales through rapid origination of new business transactions. WiredLeasing, WiredCapital's flagship software suite, is an innovative solution that automates the equipment lease and loan origination process from sales to booking and provides a single access point for the information the front office needs to get a complete view of the customer relationship. WiredCapital is backed by Mobius Venture Capital. For more information visit www.wiredcapital.com . About Lighthouse Capital Partners Lighthouse is a private venture capital partnership specializing in providing debt financing to technology based start-up companies. Since its formation in 1994 Lighthouse has provided more than $600 million of financing to over 250 private companies. Lighthouse has provided debt financing to many outstanding young companies including Ariba, Broadvision, Centillium Communications, Corvis, Excite, Foundry Networks, Millennium Pharmaceuticals, MMC Networks, nVidia, Octane Software, Portal Software, Power Integrations, RedBack Networks, Sirocco Systems, and StorageNetworks. #### ######################################### ################# Retailers are expected to continue with zero-percent financing
deals
By Anne D'Innocenzio,
Associated Press, NEW YORK (AP) It might
be too late to get zero-percent financing on a new car, but consumers
should continue to get interest-free deals on computers, furniture,
TV sets and other big-ticket merchandise, a long-standing tradition
in the retail industry. But merchants are unlikely
to be as generous as they were this past holiday season, when stores
including Home Depot Inc. extended the terms on no-interest loans
and made them available on a wider selection of merchandise. ''There is a lot of hope
and expectation that the economy will improve by mid-2002,'' said
Pat Fitzpatrick, principal at Kurt Salmon Associates Inc., a retail
consulting firm. ''Retailers are buying more carefully and trying
to be smarter with promotions. They don't want to extend themselves.''
Meanwhile, some manufacturers,
including Dell Computer Corp., have recently offered no-interest loans
to corporate customers as a way to boost corporate business in a recessionary
environment. The latest is Sony Electronics'
Broadcast and Professional Co., which sells such offerings as video
conferencing equipment and digital photography products to large and
small businesses, as well as techno-savvy consumers. It said Monday
it is offering for the first time a no-payment, zero-percent financing
plan until Jan. 1, 2003 on products of $2,000 or more that are purchased
by March 29. The offer, which Sony
acknowledged was borrowed from the auto industry, is aimed primarily
at jump-starting sales to small business customers that were hurt
by the Sept. 11 terror attacks. ''A lot of companies
have been delaying their purchase plans,'' said Robert Christy, a
Sony spokesman. ''This is an opportunity to help our customers in
these tough economic times.'' As for any risks to the
bottom line, he responded, ''We're looking to sell volume.'' General Motors Corp.
was the automaker first to offer zero-percent interest in September
with its ''Keep America Rolling Program,'' a way to boost sales that
were already weak before the attacks. Ford Motor Co., the Chrysler
Group of DaimlerChrysler AG and Toyota Motor Corp. followed within
days. The programs were set
to expire at the end of October, but were so successful that GM, Ford
and Chrysler extended them twice. GM's expired on Jan. 2 and was replaced
with a $2,002 rebate program that is expected to cost GM less than
the no-interest loan. Chrysler's program ended
Jan. 8, but the automaker was expected to announced a new incentive
plan that will feature $2,000 in cash back on 2002 Dodge Durango sport
utility vehicles. The Ford program ends Jan. 14. Burt Flickinger, III,
managing director of Reach Marketing, a consulting firm in Westport,
Conn., said zero-percent interest come-ons from the auto industry
were successful in the short term, but too costly for companies in
the long term. ''They have to protect
themselves,'' he said, noting that automakers feared they would lose
sales in 2002 and 2003 because consumers moved up their purchases
to take advantage of the incentives. For consumer electronics
and home furnishings retailers, no-interest loans are less risky,
given the constant change in technology and seasonality of the product
mix. But, Flickinger warned,
''companies really want to direct consumers and corporate clients
on a new line of products, rather than subsidizing sales on existing
products.'' Merchants said they were
pleased with the success of their financing deals last year, but would
not comment on their strategy this year due to competitive reasons.
Home Depot, the nation's
largest home improvement chain, which had always offered an everyday
no-payment, no-interest loan for six months on purchases over $299,
was more generous this past holiday season, applying the zero-percent
financing to all merchandise and extending it to 12 months. ''It helped sales. It
did very well for us,'' said Heather Wilson, director of credit marketing,
who didn't want to discuss any new enticements for this year. www.leasingnews.org
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