“ It's a gangbuster story. Quite a bit of investigative reporting. Hold on to your hat!”
Ken Greene, Esq.
This Border ##### Denotes Press Release (Not Written By Leasing News)
This Week's Economic Events
Consumer Borrowing: May
Sales of Leading Retailers: June
Weekly Jobless Claims
Balance of Trade: May
Producer Prices: June
Classified Ads---Sales Manager/Senior Management
Sales Manager: Atlanta, GA
30 years in transportation Finance with strong management/ sales background. Represented company on national & region markets. Started two successful operations- produce profits and growth. Email:firstname.lastname@example.org
Sales Manager: New York, NY
I have over 25 years owning an independent leasing company that specialized in truck leasing. Tow trucks, Limos, ambulances, tractors, etc.. Email:email@example.com
Sales Management: Philadelphia, PA. - 15 years marketing leasing services in bank and non-bank environment to vendors, brokers, banks and direct. Strong relationship builder. Professional. MBA. email: firstname.lastname@example.org
Sales Manager: Portland, OR. 18+ yrs w/bank leasing company. Supervised 14- 20 sales people. Willing to relocate for the proper position. Or, seeking sales position in current location (13+yrs direct sales). email:email@example.com
Sales Manager: Seattle, WA
Senior level sales professional w/ (20) plus experience in mid market financing & leasing. The last (8) plus years being self employed in middle market brokerage. Email:firstname.lastname@example.org
Senior Management: Portfolio Management Consultant; 25+years experience in Collections, Customer Satisfaction, Asset Management, Recoveries, Continuous Process Improvement, Backend Revenue Generation, Cost per Collection Analysis. $5+Billion Portfolio expertise. email: email@example.com
Senior Management: Baltimore, MD
25 year veteran of commercial and equipment leasing seeking a senior management position with leasing or asset based financing company in the southeast (Florida preferred)
Senior Management: Long Island, NY
Degree Banking/Finance. 13 years leasing exp. Now prez young leasing company where promises were not met. Interested in joining established firm with future. Email:firstname.lastname@example.org
Senior Management: San Francisco, CA., 25 years experience w/global leasing company, sales,marketing,business dev., P&L responsibility, asset mgmt, brokering and remarketing. Interested in joining an est. firm with a future. email:email@example.com
for a full listing of the 58 Jobs Wanted List, please go to:
Post a Job wanted: http://22.214.171.124/LeasingNews/PostingForm.asp
for “Help Wanted” from companies seeking employees, go to:
also please visit: http://126.96.36.199/LeasingNews/JobPostingsWanted.htm
Broker/Funder—Attorney Not Paid Bulletin Board Complaints
Weekly Report ---
Two from last week
This was resolved by the funder. A broker claimed that when he discounted the
lease to the funder he was to receive the residual at the end of the term of
the lease. The officer of the funder had made this promise, he alleged.
The funder told Leasing News they had no such program available. The broker
would not disclose the terms and conditions nor the rate sheet or document of
his claim, but gave names of people to talk to who he said had told him
at the rate he used he was entitled to the residual.
There were several e-mails and conversations with all parties over a week’s
time, at the end, the president of the company stepped in and settled it:
“We have spoken with the broker this morning and
have agreed to pay him a ****** bonus which represents the PV of the
residual (10% assumed). Both parties have accepted this amount to settle
this misunderstanding. He will not have to worry about collecting a residual
several years from now, and we won't have to worry about him coming back
several years from now claiming any interest in the residual. This is
definitely outside our normal guidelines, but we want to go above and beyond
in order to keep him happy. Going forward, if he continues to submit
business to us, he will need to document any such special requests in
writing as he was unable to produce such documentation, which makes us leery
of his original claim.”
from an attorney who was not paid by a “long time” broker:
“I represented ************ and *** company ****** located in ********* (Tel. No. ********), in two matters in which *** and *** company was sued.
“ In the first case, ***** sued (broker) and ***. One of the other defendants also cross-complained against (the broker). (The broker) was sued for hundreds of thousands of dollars, based on breach of contract, fraud and conspiracy, and other claims, as well as punitive damages. We settled the case for a fraction of the claim.
(The broker) was sued again by an investor in the company, and we settled by having (the broker) make periodic payments back to the investor. (The broker) now owes me about $15,000. It had been a chore getting any money from ****.
“ **** was always behind and bounced at least 5 checks, which made it necessary for me to have **** sign an agreement whereby we were allowed to withdraw from representation if **** failed to keep **** account current or bounced another check (which ****!). Needless to say, **** did not stay current. At first **** kept promising payments "when *** closed a pending deal." ***** never made the payments. Then **** stopped returning may calls, and finally stopped taking them altogether.”
Contacted by telephone, the broker said their e-mail program was not working.
We suggested they take the issue to their association “standards and ethics”
committee, but the broker said they no longer belonged to any leasing association
as “they were not worthwhile.”
We offered to fax the “complaint” to obtain their side to the story, which the
person said to do. They said they would take the complaint to a local attorney , as basically the person disputes the bill, and then make a response. We offered to seek a compromise.
Past Week’s Complaints are Listed Here:
Latest on the Sale of Decision System
It looks like the other bidders have gotten Capital Stream’s CEO
Kevin Riegelsberger really angry. Look out!!!!
ELA Down 80 Members from June to June
The end of the previous year, 2002, the number was: 862
The end of June, 2002, it was 817
**** Announcement ************************************************
Funding Source Showcase Adds CIT Technology Finance
Atlanta, GA - The Lessors Network today confirmed CIT Technology Finance has been added to a list of prestigious funding sources including GMAC Commercial Finance LLC, GATX Technology Services Corp., Kislak National Bank, ORIX Public Finance LLC, and Commonwealth Capital Corp., scheduled to participate in the Funding Source Showcase on August 25th and 26th in Atlanta, Georgia.
The Funding Source Showcase is just one of the networking forums making up the Lessors Network's highly acclaimed Annual Networking Conference scheduled to be held from the Ritz-Carlton, Buckhead hotel in Atlanta this August.
Funding Source Showcase speakers will deliver oral presentations to conference attendees describing their company's buy/sell strategies in the corporate and municipal markets enabling attendees to identify important funding partners just as year end portfolio adjustments are being contemplated.
*** announcement **************************************************
UAEL New England Region Presents
United Association of Equipment Leasing
Date: Thursday, July 24, 2003
Time: 5:30PM - ??
Location: Red Rock Bistro
141 Humphrey Street (Route 1-A)
Swampscott, MA 01907
(on the Lynn border; only 15 minutes from Logan Airport)
Cost: $30 for UAEL members
$40 for non-members
Join us for an entertaining & educational evening of networking with brokers, lessors and service providers. Representatives from several national funding sources will be in attendance as well.
This well known restaurant is located on the water with spectacular views of the Boston skyline. A wide variety of hors d'oeuvres will be provided so bring an appetite. Cash bar available as well.
Please register on-line at www.uael.org by Thursday July 17th
The UAEL looks forward to seeing you there!
Streets.com Doesn't Like CIT One Year Later
Mortgage rates begin climb from record lows
As prices drop, analysts predict bond market bust
Robert Mondavi 90th Birthday Party by Frank J. Prail
Return to Oakland earned Raiders owners millions, Davis says
1586- Birthday of Thomas Hooker, colonial American pastor and an originator of the earliest system of federal government in America.
1754 - In New York City, Kings College opened. For its first year of operation, the institution admitted eight students and one faculty member, Dr. Samuel Johnson, who would also serve as the school president. In 1784, Kings College was renamed Columbia College, and later would became Columbia University. Many prestigious awards hail from the university today, including the Columbia Award for Journalism and the Pulitzer Prize for Journalism that was named after former Columbia professor, Joseph Pulitzer.
1802 - Created by Robert Rusticoat in Hudson, New York, the first comic book to ever be published was "The Wasp."
1846 - Commander J.D. Sloat of the United State Navy raised the American flag in Monterey, proclaiming United States citizenship for California.
1851-birthday of Lillian Jane Martin, founder of Mt. Zion Hospital in San Francisco, the first mental hygienic clinic for normal pre-school children,
famed psychologist who started the field of gerontology by opening a clinic for the aged in 1929, when she was 78. She lived to an advanced age, doing such things as traveling through the jungles of South America at 87.
In her "before" career, she worked through the ranks at Stanford to become a full professor of psychology in 1911. She was the first woman to head any department there. After mandatory retirement at 65, she got bored and began feeling old so she taught herself to type and then did strenuous exercises to strengthen her body.
In 1920 (at 69) she founded Mt. Zion Hospital in San Francisco, the first mental hygienic clinic for normal pre-school children. In 1929 at 78, she started the work which has resulted in reinventing old age.
1851- Birthday of Charles A. Tindley, African-American Methodist preacher and songwriter. His most enduring gospel hymns include 'Stand By Me,' 'Nothing Between,' 'Leave It There’ and 'By and By.' Died July 26, 1933, Philadelphia, Pennsylvania
1861-Birthday of Dr. Nettie Maria Stevens - U.S. biologist who in 1905 announced that chromosomes X and Y were responsible for the sex of the individual. She was never rightfully given full credit for her discovery.
1863-Lt. Colonel Christopher "Kit" Carson ( whom I was named after as my
father was writing the radio series in 1942) leaves Santa Fe with his troops, beginning his campaign against the Indians of New Mexico and Arizona. A famed mountain man before the Civil War, Carson was responsible for waging a destructive war against the Navajo that resulted in their removal from the Four Corners area to southeastern New Mexico. Carson was perhaps the most famous trapper and guide in the West. He traveled with the expeditions of John C. Fremont in the 1840s, leading Fremont through the Great Basin. Fremont's flattering portrayal of Carson made the mountain man a hero when the reports were published and widely read in the east. Later, Carson guided Stephen Watts Kearney to New Mexico during the Mexican-American War. In the 1850s he became the Indian agent in Taos for New Mexico, a position he left in 1861 to accept a commission as lieutenant colonel in the 1st New Mexico Volunteers.
Although Carson's unit saw action in the New Mexico battles of 1862, he was most famous for his campaign against the Indians. Despite his reputation for being sympathetic and accommodating to tribes such as the Mescaleros, Kiowas, and Navajo, under orders of the US Military, Carson waged a brutal campaign against the Navajo in 1863. When bands of Navajo refused to accept confinement on reservations, Carson terrorized the Navajo lands--burning crops, destroying villages, and slaughtering livestock. Carson rounded up some 8,000 Navajo and marched them across New Mexico for imprisonment on the Bosque Redondo, over 300 miles from their homes, where they remained for the duration of the war.
Kit Carson guided Stephen W. Kearny's party from New Mexico to California during the Mexican War and his bravery saved the company. Kit Carson was appointed in 1853 as Indian agent for Taos, New Mexico. Kit Carson was extremely qualified and helped calm the Apaches on several different occasions that appeared nearly hopeless short the entrance of his masterful skills
During the Civil War Kit Carson joined the Union's Army 1st New Mexican
Volunteers he was promoted to brigadier general for his outstanding campaign record After the Civil War Kit Carson commanded Fort Garland garrison in Colorado. When he retired, he moved his family back to Taos, New Mexico,
where he died May 23, 1868. http://www.desertusa.com/mag99/jan/papr/kitcarson.html
1865 - Mary E. Surratt became the first woman to be executed by the US government after being found guilty of conspiring with John Wilkes Booth to assassinate Abraham Lincoln. Her conviction was a subject of controversy as the only crime she appeared to have committed was to own the boarding house where Booth planned Lincoln's assassination. The president and those living in the area
condemning her for allowing the plot to be hatched in her house. Whether she
was part of the plot or knew of it was never proven. Three others, also convicted in the conspiracy, were hanged along with Mary E. Surratt: Lewis Payne, David E. Harold and George A. Atzerodt.
1876 - The most notorious train robber of the American West, Jesse James, held up the Missouri-Pacific train and robbed about $15,000. Accompanied by his gang, Jesse James came to typify the hazards of the 19th-century frontier as it has been portrayed in motion-picture Westerns.
1887- Beatrice Fox Auerbach birthday - Hartford, Connecticut, business executive and philanthropist who established a foundation to train women's groups in the techniques of community organization. She succeeded her father as president of Hartford's G. Fox and Company and developed it into the largest privately- owned retail store in the nation. Died 1968.
http://www.cwhf.org/browse/auerbach.htm1896-The Presidential campaign was, in many ways, a battle over money. As was expected, the Republican campaign, led by the party's presidential nominee, Ohio governor William McKinley, centered on maintaining the gold standard. On the other side of the fence, the Democrats took a cue from the Populist party and latched on to the free coinage of silver as one of their guiding issues. While the Democrat's decision to support silver shocked a number of political observers, their nominee for the Oval Office proved to be even more surprising. The Democrats had already settled on their issue, but the summer of 1896 found them without a clear candidate for the Oval Office. That all changed at the party's national convention in Chicago on July 7 when William Jennings Bryan, then just a young scribe from Nebraska, stepped to speak before the Democrat's 20,000 delegates. An ardent supporter of the silver movement, Bryan seized the reins of the party by railing against the Republican's and their "demand for a gold standard." During his speech, Bryan laid down his now famous vow against gold and the Republicans: "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." These indelible words sent the delegates into frenzy and effectively sealed Bryan's unlikely nomination as the Democrat's candidate for President. Alas, Bryan's fiery oratory proved to be no match for McKinley's fat coffers: backed by the money and influence of the nation's business leaders, the Republicans were able to lavish roughly $7 million on their campaign. Bryan, on the other hand, spent a scant $300,000 and ultimately lost his bid for the White House. The electoral vote was McKinley, 271; William Jennings Bryan, 176. The popular vote was McKinley 7,103,779, Bryan 5,402,925. The Republicans not only gained the White House but four seats in the Senate to lead 47-34, seven seats going to minor parties. In the House, the Republicans lost 40 seats but still held a 204-113 majority, 40 seats going to minor parties. The Republican party was free to have its way and on January 12 the new National Monetary Conference met at Indianapolis, Ind, and endorsed the existing gold standard.
1898-Hawaii was annexed by the US. President William McKinley signed a resolution annexing Hawaii. No change in government took place until 1900, when Congress passed an act making Hawaii an “incorporated” territory of the US. This act remained in effect until Hawaii became a state in 1959.
1905--- 127ø F (53ø C), Parker Arizona
1907 -- Robert A. Heinlein birthday (1907-1988). Prolific American writer, grand master of science fiction. His first stories appeared in action-adventure pulp magazine "Astounding Science Fiction" in 1939. His first novel, Rocket Ship Galileo appeared in 1947 & paved way to children's science fiction. Wrote The Green Hills of Earth, the militarist Starship Troopers, & the 60s hippie oriented Stranger in a Strange Land (a favorite of mass murderer Charles Manson).
In 1975 Heinlein was awarded the first Grand Master Nebula.
1908- Harriette Louisa Simpson Arnow birthday - U.S. author who described the Souther Appalachian life and people with honesty and authenticity. She earned a college degree, which shocked her family who were descendants of original Kentucky settlers that didn't believe in women's education. She had to move to Cincinnati to live. Her most critically acclaimed best seller was Hunter's Horn (1949)
1913-Birthday of sax player Hank Mobley, Eastman GA
Died May 30, 1986
1915-birthday of black author Margaret Walker, writer, born Birmingham, Alabama, died November 30, 1998
1917-Birthday of jazz guitarist Lloyd "Tiny" Grimes guitar Newport News VA
Played with Charlie Parker and later became a rock’n’roll guitarist.
1917- John (Lonzo) Sullivan of the country comedy duo of Lonzo and Oscar was born in Edmonton, Kentucky. John's Brother, Rollin, was Oscar. The brothers' original songs included such ditties as "I'm My Own Grandpa" - a hit before the Second World War - "You Blacked My Blue Eyes Too Often" and "Take Them Cold Feet Out of My Back." In 1947, Lonzo and Oscar began a 20 year association with the Grand Ole Opry which ended in June 1967 with John Sullivan's death. Died June 5, 1967.
1927- trumpeter and conductor Doc Severinsen born Arlington, Oregon,
perhaps best known as the band leader for the “Johnny Carson Show.”
1928- singer Mary Ford, who had a series of pop hits with her husband, guitarist Les Paul, in the 1950's, was born in Pasadena, California. Their successes included "Mockin' Bird Hill," "How High the Moon" and "Waiting For the Sunrise." Their recordings were among the earliest to use the technique of multitracking, and featured Ford's voice answering Paul's talking guitar. The hits stopped in 1961, and Les Paul and Mary Ford were divorced two years later. Ford died on September 30th, 1977.
1948 - Satchel Paige was signed to pitch for the Cleveland Indians. Paige, who became a baseball legend playing in the Negro leagues, put on a major league uniform for the first time in his 23-year career. While he claimed to be 39, many speculated that he was actually in his 50's.
1946-Pope Pius XII presided over the canonization ceremonies for Mother Frances Xavier Cabrini, as she became the first American to be canonized. She was the founder of the Missionary Sisters of the Sacred Heart of Jesus and her principal shrine is at mother Cabrini High School, New York, NY. Carbrini was born at Lombardy Italy., July 15, 1859 and died at Chicago, IL, December 22,1917. Her feast day is celebrated on December 22.
You Can’t Be True, Dear - The Ken Griffin Orchestra (vocal: Jerry Wayne)
Nature Boy - Nat King
Woody Woodpecker Song - The Kay Kaiser Orchestra (vocal: Gloria Wood & The Campus Kids)
Bouquet of Roses - Eddy Arnold
1949 - Jack Webb’s "Dragnet" made its radio debut on NBC radio. This was the first program to dramatize actual cases from police files. Each episode, on both radio and television, began with the announcement: "The story you are about to hear [see] is true; the names have been changed to protect the innocent;" and ended with the sentence the criminal was given. After a successful television preview on "Chesterfield Sound-Off Time," "Dragnet" made the permanent leap to television in January 1952. From 1952 to 1956, the show enjoyed simultaneous runs on radio and television, continuing on television until 1959. After a seven year hiatus, the show resurfaced as "Dragnet ’67" to distinguish itself from its own reruns. This first real-life police drama series was such a success that it remains in syndication today.
1953- R'n'B singer Peter Brown, who had a Top Ten hit in 1978 with "Dance With Me."
1954- Memphis disc jockey Dewey Phillips became the first DJ to play an Elvis Presley record when he premiered "That's All Right" on his "Red, Hot and Blue" show on station WHBQ. Phillips also interviewed Presley on the program. "That's All Right" and its flip side, an updating of the country tune "Blue Moon of Kentucky," were hits in the Memphis area.
The Wayward Wind - Gogi Grant
Be-Bop-A-Lula - Gene Vincent & His Blue Caps
Born to Be with You - The Chordettes
Crazy Arms - Ray Price
1962 - With "The Stripper," orchestra leader David Rose reached the number 1 spot on the popular music charts. The song stayed at the top spot for one week. Rose’s previous success on the music charts was with "Holiday for Strings" in 1944.
1962 - Riding Big Steve at Chicago, Illinois's Arlington Park, jockey Bill Hartack won his 3,000th race.
I Get Around - The Beach Boys
My Boy Lollipop - Millie Small
Memphis - Johnny Rivers
Together Again - Buck Owens
Song Sung Blue - Neil Diamond
Outa-Space - Billy Preston
Lean on Me - Bill Withers
Eleven Roses - Hank Williams, Jr.
1975-“Ryan’s Hope” premiered on TV. This ABC soap ran until 1989 and was set mostly at the fictional Ryan’s Tavern on Riverside Hospital at New York City.
Coming Up - Paul McCartney & Wings
The Rose - Bette Midler
It’s Still Rock & Roll to Me - Billy Joel
He Stopped Loving Her Today - George Jones
1981 - President Reagan nominated Sandra Day O'Connor to become a Supreme Court justice; she became the first woman member of the Supreme Court in September.
1984 - 1984--"When Doves Cry," the first single to be released from Prince's 1984 album Purple Rain, hits the top of the charts. The song stayed on top for five weeks and became the best-selling single of 1984. Meanwhile, the album topped the charts for 24 weeks and sold more than 10 million copies.
1986 - Jackie Joyner-Kersee was the United State's biggest success at the Goodwill Games. At the event held in Moscow, Russia, she broke the heptathlon world record with 7,148 points. The same year, Jackie broke her own record when she scored 7,158 points in the United States Olympic Sports Festival where she won all the heptathlon's seven events.
Dirty Diana - Michael Jackson
The Flame - Cheap Trick
Mercedes Boy - Pebbles
If It Don’t Come Easy - Tanya Tucker
1990- the world's three most famous tenors - Luciano Pavarotti, Placido Domingo and Jose Carreras - performed their first concert together. The performance, in Rome on the eve of the World Cup soccer final, earned millions of dollars for charity. An album of the event, "Carerras-Domingo-Pavorotti in Concert," was a surprise hit on the pop charts, and eventually became the best-selling classical album of all-time.
1999 - The soundtrack album from Disney's film "Tarzan" was certified platinum on this date.
“Take the Money and Run”
by Christopher Menkin
Leasing News asked this question of its readers: "You are a funding source and you have a broker that has committed fraud (or at best serious misrepresentation) totaling several million dollars") "If the broker agrees to pay part of the debt
in return for a "hold harmless agreement" and an agreement that your
employees are bound by a non-disclosure agreement, would you take the
cash to reduce losses--- or pursue legal remedy?"
Readers overwhelming said they would “... take the money and run.”
Old Kent took the cash and agreed to silence. There were accusations
of selling the same lease to another funder, for taking payoff money
but continuing to make payments as if the lessee had not paid off the
lease, and allegedly there was little or no equipment to support even one lease.
Equipment was allegedly inflated, and reportedly in some instances, kick backs
were made knowingly by the vendor to the lessee in inflated invoices.
The alleged fraudulent practices seems to have continued in much larger dollar amounts with the victims being CIT, Sierra Cities, and perhaps two dozen or more
community banks. If it is proven true in court cases to be heard
hopefully in 2003, this could be one of the largest leasing "Ponzi"
scams in the recent history of equipment leasing in the United States.
What brought the alleged fraud to the surface was a declining
marketplace with fewer sales to generate the cash necessary to cover
late payments as defaults mounted due to a poor economy. This claimed "Ponzi"
type flow of checks to funding sources apparently finally caught up with RW
Professional Leasing when their brokers blew the whistle not only because
of the complaints they were receiving from customers they referred
to RW Professional, but because they were angry they didn’t get
paid their commissions. You don’t mess with a salesman’s commission.
February 22, 2002, Finance Team of America, Weston, Florida formally
severed its business relationship in a certified letter to RW Professional
Leasing. This "super broker" also filed a formal complaint with the
Consumer Department of the Massachusetts Attorney General's office about
RW Professional Leasing Services, 445 Washington Street, Wellesley,
Massachusetts. They claimed that RW Professional was making payments for
defaulted leases to American Express and others. They also questioned
how early payoffs and existing leases were being handled.
Finance Team of America’s Bob Castro, Eric Castro, and Scott Wheeler wrote in their letter, “... several of our clients have also contacted our office to say they have not received funds and have been waiting many weeks in some cases months. Many doctors are also being billed without receiving their funds and some are asking questions about the descriptions and structure of their transaction on their monthly statement. Vendors have not been paid upon delivery. In addition,
financial institutions have not been paid as required by contract when
early payoffs have been made by lessees.”
They added the complaint, “...our commissions are well past due for months now and we have tried to work with your company on a payment plan for the past due amounts that now add up to a six figure sum”.
Finance Team of America also contacted the Federal Bureau of
Investigation. They believed RW Professional Leasing was engaged
in fraudulent activities. They didn’t want to have anything to
do with them. ( Finance Team of America has since changed their name to Bankers Healthcare Group, Inc. )
During this time, the Leasing News stories were getting the attention of
the authorities, several community banks, plus physicians and dentists
who called and told us stories like asking for a payoff at the bank where
his records showed he had 11 payments left, while the bank claimed there
were 52 remaining.
In June 13, 2002, Crawford & Sons, Ltd Profit Sharing Plan along with
Plaintiffs East Prospect State Bank, Equitable Bank, First National
Bank, First Security State Bank, Northwest Bank, People's Bank, Sand
Ridge Bank, Bluestem National Bank, First Victoria National Bank, American Savings, FSB, Mutual Federal Savings, Dime Savings Bank, Third Federal Savings Bank, Fidelity Bank of Florida, Citizens National Bank file in the U.S.
District court with Judge Arthur D. Spatt, presiding, for $11,029,198 against
defendants Rochelle Besser, Wallace I. Besser, Barry Drayer, and RW
Professional Leasing Services, Inc. The lawsuit also charged the
defendants with bank fraud, mail fraud, wire transfer fraud and violation of the RICO Act.
June 21, 2002, "forty FBI agents raided the offices of RW Professional
Leasing in Island Park, NY, on Long Island” The New York Times
reported. Those arrested were RW's president and co-owner, Rochelle
Drayer Besser, also known as Rochelle Drayer, 66, of Long Beach,
California; her brother, RW's senior vice president, Barry Drayer, 62, who operated a branch in Wellesley, Mass. (reportedly the defacto CEO); another brother, Roger Drayer, 59, of Long Beach, who holds various titles, operating a small office in California; and Roger Drayer's daughter, Jennifer Tarantino,
also known as Jennifer Drayer, 31, of Oceanside, California.
Prosecutors said "RW Professional Leasing Corporation concocted
elaborate schemes using up to 100 rented mailboxes as far away as
California to send phony checks, sham invoices, bogus leases and other
false documents to banks in various states, “ the story said. “ Based on those documents, the banks lent RW millions of dollars to buy equipment and lease it out under recourse provisions. ‘
"The schemes included multiple loans from different banks for the same
medical equipment and loans for equipment that was never bought or
leased, prosecutors said. It is said it may go higher than $200 million,
including the American Express-Sierra Cities portfolio. Vendors,
brokers, attorneys, and others are owed money,” The New York Times story
concluded. “ There may also be 'brokers' and others to be named in the scheme."
On June 27, 2002 the case was filed in New York Eastern (Islip) criminal
docket, case #02-CR-767-ALL as "USA v RW Professional, et al" with the
honorable Judge Arthur D. Spatt to preside. The pending counts included
18:371.F Conspiracy to Defraud the United States; 18 USC 371 and 3551 et
seq. alleging that in or about 1997 and June, 2002, the defendants did knowingly and intentionally conspire to execute, attempt to execute a scheme, and
artifice to defraud financial institutions. Specific named banks include
Alliance Bank, Northwest Bank, along with Money Laundering-Interstate
Commerce (approximately four pages of pending counts.)
On August 19, 2002 American Express Business Financial Corporation filed a
suit in the Eastern District of New York (Central Islip) for
$20,000,000 against Professional Leasing Service Corporation. The
president was Rochelle Besser. The vice-president was Barry Drayer, who
evidently has always been vice-president., although all that we talked
to told us Barry Drayer allegedly made the decisions and all negotiations went
through him. Rochelle Besser is his sister.
The American Express Business Finance lawsuit came almost one year after Charlie Lester of LPI Financial, Marietta, Georgia, founder of Lease Pro,
which was acquired by First Sierra in 1997, had emailed a long time friend and executive at American Express a warning about RW Professional based on a July 16, 2001 meeting with Barry Drayer at Barry's office in Wellesley, Massachusetts..
(Charlie Lester, taken on Father's Day, with his oldest
daughter Sharon Hess on the left, and his youngest
daughter Melanie Milligan
Charlie Lester said he had known Barry Drayer since 1990 when they joined the Denrich recourse program together and he considered Barry Drayer a friendly competitor. He said the purpose of that visit was to see if there was a possible joint venture opportunity for LPI Financial and RW ,since they supposedly offered complimentary programs.
After Barry Drayer explained how he could place 35-38 points in a deal, according to Charlie Lester, he then explained that with multiple funding sources he could use the same credit package with only one CBR pull to offer the broker or lessee multiple approvals instead of just one. In the course of the conversation, Barry Drayer reportedly said he would go bankrupt and start up under another name if he could not solve his problems with American Express.
When he returned to Atlanta, he notified Leasing News as an
advisory board member about the meeting . He also said he had contacted his funding source executives to warn them. He also wanted to protect LPI's reputation, he said, since he felt fraud was being committed. He did not want to be associated with it. He had made a tape of what was said so he would not forget the details of the conversation after leaving Barry Drayer’s office that Monday morning.
His friend at American Express acknowledged that they were investigating RW, but they still continued to fund RW transactions for months. One broker who was a Leasing News reader and close to the situation said he believed that American Express continued to fund RW's deals since he was making payments, which may have come from early payoffs on leases actually owned by community banks.
The head man at Sierra Cities, Tom Depping, was aware of the "problems"
with the RW Professional portfolio, and issued a memo to his
subordinates who brought the situation to his attention. The company
was in the process of being sold to American Express Business Finance, which was conducting its "due diligence." This is the story as we have pieced together
from the participants.
We attempted to obtain a copy of the memo from the attorney in the law suit,
as well as the opposing counsel. The plaintiff and defendant’s attorneys both told us they would make no comment on “active litigation” nor would their clients
have any comment at this time. Rich Tambour, General Manager of American Express Business Finance, did not return any of our telephone calls.
At the Charlie Lester informed his friends at American Express about the
conversation with Barry Drayer, he did verify to Leasing News that the old First Sierra group at the time was investigating possible problems with the portfolios of RW Professional Leasing. He also was able to verify that American Express was conducting an investigation also on its own.
August 31,2001, Leasing News printed:
"A high ranking executive with Amex has verified that Amex is investigating possible problems with the portfolios of RW Professional Leasing and the Republic Group. There is no cover up attempt on the part of Amex, but in fairness to everyone, the issues have to be thoroughly investigated before any public comment can be made".
September 7,2001, Leasing News asked the question about what would
a funder do if offered some cash with the stipulation of non-disclosure
of the alleged offense. At this time, we started to run a three part series on "private label" and "discounting leases," including an interview with our senior leasing news advisory board member Charlie Lester .
After a 19 year sales and management career with IBM, Charlie settled in Atlanta and somehow got into the leasing business in 1984. In 1986, he founded Lease Pro, Inc. and operated it as a medical niche broker until 1997 when First Sierra Financial acquired most of its assets. The remaining assets were assigned to LPI Financial Services as a new corporate entity.
“-After his two-year contract was honored, he resigned and sat out his non-compete period before expanding LPI Financial into a niche broker offering working capital loans to medical professionals.”
To understand what went wrong, you need to understand how discounting a lease
and a private label program works, and that was the purpose of the three part
Discounting leasing is when you have a lease contract with your name on it and
discount the stream of payments to a buyer ( bank, funder, syndicator) ( you may
or may not keep the residual and may discount it too, meaning present value the
stream of payments and the residual, too ). You get paid up-front, instead of the
difference between the monthly interest earned and paid. It may be recourse
or non-recourse, but it certainly will have “representations and warrants.”
Sierra Cities bought many discounters local operations and combined them
into one, calling it a Private Label Program. They offered the ability to
continue to discount plus to accumulate leases and syndicate them to the
public for a better rate of return; a better margin and more liberal credit
policy. Westinghouse, CIT, Heller, Textron, and of course, GE also
have private label programs, but Sierra Cities carried the Colonial Pacific
Pegasus program one step further. In fact, this division was making
a $20 million annual profit from its inception. What made it so successful:
Oren Hall, Mark McQuitty, Jim Raeder, Charlie Lester, Fred Van Etten,
Mike Wing and others were in leadership capacity.
Around this time a person claiming to be the president of American Express
Business Finance called, who I believe said his name was Danny Lamb,
asking me not to print the financial statements. I said I would not. In reality,
I because I didn’t know what he was referring to.
He called a second time, saying this was, “Danny,” and thanking me again
for my “cooperation.” As I started to ask some questions, he ended the
conversation and never called again as the September 11 terrorist
attach on the Twin Towers brought an major disruption to the investigation,
as our way of life changed dramatically, plus the operation of American Express, who had to relocate its office, re-build, re-organize its New York operation.
It was not until after the first of the year that we went back to completing
the story, spending the next year and a half interviewing as many of
those involved as possible. Many interviews were done in person
at conferences, at social gatherings, and some over the telephone, several
by e-mail, as the people involved learned we were trying to put the
full story together with the main goal of being “accurate.”
Thomas J. Depping Looking Out Upon Houston, Texas
The people involved did not label Mr. Depping as "inept" or a "crook,"
but a man "trying to hold it together" and find a buyer for his company
that had basically grown beyond the securitization marketplace. The purported reason for the MidAm leases was the need to maintain high monthly funding even if the yield was minimal, as explained to Leasing News. The purported reason to keep doing business with RW Professional was the volume and yield to offset the MidAm business. This was a decision made at the Depping level where "the buck stopped here" even though some of his own staff had not only raised red flags, but were waving them frantically..
Not that Mr. Depping did not have his detractors, several of whom
sued First Sierra after Depping was long gone. American Express Business Finance allegedly brought legal action against several officers and employees.
It is reported most made settlements with the common thread being not to disclose the outcome or settlement.
Despite the financial turmoil and loss of money by many, Depping's
followers say the "Gazelle" (the name he likened himself to in his
departing memo) was a very hard worker, dedicated family man, but became
a loner-a position he did not enjoy----and in the business jungle, out
ran the leopards who changed their spots; the lions who ran in packs
because they had little courage, and he chose to be called the "Gazelle"
because there is no faster animal.
Or maybe Depping was more accurate in knowing the full description of
the animal: "They are the prey of many creatures, including cheetahs,
cape hunting dogs, lions, honey badgers, jackals, hyenas, leopards, and
crocodiles. Their young are preyed upon by lions, leopards, cheetahs,
all types of large cats, plus, baboons, pythons, and packs of
jackals...Their only defense is to flee, and they are excellent escape artists.
They can leap 10 feet into the air, jump 30 feet in a single bound, and
make turns much faster than a cheetah can.
Tomorrow: Part II
The story of how the RW Professional portfolio went to Bank of Boston
and finally to Sierra Cites.
Thomas J. Depping Office at Sierra Cities