Wednesday, March 9, 2011
Today's Equipment Leasing Headlines
Leasing News hit by eMail Bomb
######## surrounding the article denotes it is a “press release” and was not written by Leasing News nor information verified, but from the source noted. When an article is signed by the writer, it is considered a “by line.” It reflects the opinion and research of the writer. It is considered “bias” as it is the writer’s viewpoint.
Leasing News hit by eMail Bomb
There was no email received by Leasing News from Monday midnight to Tuesday at 4:30pm, California time, due to being hit by what is described as an "eMail bomb." I wasn’t on the computer until 11:30 am, Tuesday, being out of the office, and when I returned thought it strange no email. Called the internet provider the first time and the recording said they were experiencing email problems. Tried again after thinking about it, and decide to wait my turn in line. After waiting 45 minutes—connected.
Don’t know about the other users, but on Leasing News mail server there was 250,000 undelivered emails notices (wrong addresses) clogging up the system. There were several actions taken, scripts written to attempt to clean it up, and a few email was received after the first 50,000 were deleted, then by the time this was cleared up, another 50,000 had entered, but they would work on it. After the third telephone call, the only way to get it to work was to delete all the email from the server, after the invader was stopped by blacklisting the email address.
If you sent an email and I did not respond, I did not get it. I always acknowledge receiving an email as it follows internet netiquette.
"It's always something - if it's not one thing, it's another!"
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High Risk Lenders Use Native American tribes
High risk lenders are developing relationships with Native American tribes to get around state-imposed usury laws.
Because of the sovereign immunity granted to tribes by the U.S. government, they are shielded from interest-rate caps and other payday-loan regulations. Tribal lenders can even lend in the 12 U.S. states where lawmakers have kicked out the rest of the payday-loan industry.
Those advantages are luring American Indian tribes into the payday-loan business, and unleashing a scramble by lenders to team up with tribes. Much like the casino boom that began about 25 years ago, payday loans are emerging as a promising revenue stream for economically struggling tribes, especially those willing to let outside companies piggyback on their freedom from state and U.S. lending laws.
Research indicates that many of the tribes are located in South Dakota, Montana, Oklahoma, and Washington.
Tribes doing business with online lenders made about $420 million in payday loans last year.
Some observers predict that the number of tribes with payday-loan operations eventually could climb close to the 400 that now have casinos.
All it takes to make a deal are a willing tribe and an eager payday lender. The lender usually incorporates on tribal land, agreeing to pay the chief a salary of a few thousand dollars a month.
Most payday lenders have no physical presence on tribal land. To go into business with a tribe, they typically start making loans in the tribe's name from the lender's existing call center.
Sovereign immunity is becoming even more attractive as states crack down on alleged abuses in the traditional payday-loan industry. Seventeen U.S. states have capped interest rates on such loans or banned them entirely. Overall, payday-loan volume fell to $38.5 billion in 2009, down 24% from 2007.
Some payday lenders have tried to avoid interest-rate limits by incorporating in states with no maximum rates, such as Delaware and Utah, and then imposing the higher rates on borrowers throughout the U.S.
That practice suffered a defeat when Pennsylvania's highest court ruled in October that Cash America, the largest publicly traded payday lender by revenue, had to abide by the state's interest-rate and licensing rules even though the company is incorporated in Nevada.
Jeffrey Taylor is the founder of Jeffrey Taylor Group, a holding company for various operating businesses. Taylor is the author of two textbooks for the equipment-leasing industry and his autobiography. His most recent book, Going from W2 to 1099, offers his perspective on starting a new business. Jeffreyarizona@aol.com-602-708-4981
Snowflake Financial---A new angle
"The 800# that I have on record for him is no longer working. I have a cell # for him, but it never goes to voicemail... was contacted by D.T. Chavis of Snowflake Financial. He sold me hook, line, & sinker on his services. Made me feel confident that even with little credit as well as not needing a large sum of money that he could get it accomplished. So I signed on the line and gave him $350 for his 'engagement fee'. This took place this past November...On 12/7 I received an email that things were being reviewed and should know something in the next 2 weeks. Well Jan. 24th I sent an email expressing how unhappy and disappointed I was with the lack of service I was receiving. After not receiving a response I called the 800# only to discover it was no longer working. I called his cell #, and could tell I caught him off guard. He claimed he never received my email and asked if he could call me back since it was after hours (which several of our initial conversations were in the time frame of my call). So I resent the email on Jan 31st. He didn't ever return my call, but I did get a return email on Feb 2 telling me that I signed an agreement and that he has fulfilled his end of the agreement."
(Leasing News told her she was lucky it was only $350. All she asked was that her lament be published. Editor)
Leasing Industry Help Wanted
Please see our Job Wanted section for possible new employees.
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Ned Roscoe of “Cigarettes Cheaper!” Convicted 28 Counts
SAN JOSE, Calif. – A former owner and officer of “Cigarettes Cheaper!”, which at its height had nearly 800 retail stores nationwide and $1 billion in annual revenue, was convicted by a federal jury yesterday of one count of conspiracy to commit bank fraud and to make false statements to Comerica Bank, 13 counts of bank fraud, and 14 counts of false statements to a bank, United States Attorney Melinda Haag announced. (Company was also into American Express Equipment Finance, LEAF Funding, and GE Capital for millions of dollars, for equipment that did not exist and/or greatly over inflating cost of equipment for store locations, all from the same vendor who dummied the invoices. Editor)
The jury found that Ned Roscoe conspired to defraud and make false statements to Comerica Bank, committed 13 acts of bank fraud, and made 13 false statements to Comerica Bank when, in the Fall of 2003, he knowingly submitted weekly borrowing base reports of inventory with inflated inventory valuations. The jury also found that Roscoe had caused an additional false statement to be made to Comerica Bank when he directed an employee to falsely explain the cause of the inventory inflation. The guilty verdict followed a month-long jury trial before U.S. District Court Judge Ronald M. Whyte.
Co-defendant John Roscoe, also an owner and officer of “Cigarettes Cheaper!” and Ned Roscoe’s father, pleaded guilty on Jan. 21, 2011, to conspiracy to make false statements to Comerica Bank. John Roscoe, 81, resides in Green Valley, Calif.
Evidence at trial showed that Ned Roscoe, 51, of Fairfield, Calif., directed company accountants from Aug. 22, 2003, through Nov. 14, 2003, to inflate the company’s weekly borrowing base reports of inventory submitted to Comerica Bank, eventually inflating the value of “Cigarettes Cheaper!’s" inventory by more than $16 million. The evidence showed that Ned Roscoe did this in order to obtain additional money from Comerica through “Cigarettes Cheaper!’s" $21 million line of credit and to avoid a pay down on the line of credit of $10.7 million. The evidence also showed that Ned and John Roscoe conspired to defraud Comerica Bank and make false statements to the bank. It further showed that Ned Roscoe directed and caused a company accountant to falsely inform Comerica Bank in late November 2003 that the cause of the $16 million in inflated inventory was due to clerical or accounting errors.
Ned and John Roscoe were indicted by a federal grand jury on June 16, 2007. On Sept. 30, 2010, the grand jury returned a second superseding indictment, containing the 28 counts presented to the jury.
The sentencing of Ned Roscoe is scheduled for June 6, 2011, before Judge Whyte in San Jose. No sentencing date has been scheduled for John Roscoe, but one is expected to be set shortly. The maximum statutory penalty for count 1, in violation of 18 U.S.C. § 371, conspiracy to commit bank fraud and to make false statements to a bank, is five years and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for counts 2 through 14, in violation of 18 U.S.C. § 1344, and counts 15 through 28, in violation of 18 U.S.C. § 1014, false statements to a bank, is 30 years as to each count, and a fine of $1 million, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Eumi Choi and Grant Fondo are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Kamille Singh. The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation. The FBI initiated its investigation in 2004 after a referral from Comerica Bank.
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(Leasing Companies also lost money in this, see previous stories:
Sales Makes it Happen---by Steve Chriest
"Rising To Your Default Level"
Naturally talented salespeople are, among other things, confident. Most of them actually believe that they can use their native intelligence and interpersonal skills to rise to the occasion in dealing with even the most difficult selling situations. Unfortunately, nothing is further from the truth.
It was widely reported, recently, that a five foot, six inches tall female police officer apprehended and handcuffed a six foot, four inch, 240 pound male offender. Incredulous that a comparatively small, female officer could place handcuffs on an angry, six foot four 240 foot tall male, reporters asked her how she managed to do it. She replied, “My training took over and I just acted as I’ve been trained to act in this type of situation.”
I think it’s the same for sales professionals. Although sales people often think they will rise to the occasion in difficult selling situations, that’s not what happens. What happens is that they rise to the level of their training. If they are generally disorganized, and if they rarely plan ahead for important sales calls, this is the default behavior that shows itself in difficult selling situations.
When a leasing prospect asks about the interest rate charged in a lease, the leasing salesperson who is unprepared to discuss the value he and his company brings to the prospect’s business probably pulls out his HP 17BII calculator and begins the attempt to impress the prospect with how to calculate the twenty-four ways of looking at interest rates in a lease. He defaults to his level of training and usually leaves the prospect confused, uncertain, unsatisfied and uncommitted!
If, instead, the salesperson has been taught to articulate the relative importance of interest rates in borrowing, vis-à-vis the other important considerations that impact a borrowing decision, he will default to this method of explanation when confronted with the dreaded interest rate question from prospects and customers.
Sales managers who teach their salespeople how important it is to impress customers with their use of the HP 17BII calculator shouldn’t be surprised when the salespeople use their calculators as their default method of responding to tough questions posed by customers in a tough sales call.
Don’t expect sales professionals, even superstars, to rise to the occasion in all selling situations. If salespeople are trained well, they will generally respond well to tough selling situations. The reality is that a salesperson’s performance always defaults to his level of training.
About the author: Steve Chriest is the founder of Selling UpTM (www.selling-up.com), a sales consulting firm specializing in sales improvement for organizations of all types and sizes in a variety of industries. He is also the author of Selling The E-Suite, The Proven System for Reaching and Selling Senior Executives and Five Minute Financial Analyst, Basic CREDIT & Analysis Tools for Non-Accountants. He was the CEO of a very successful leasing company and executive at a major company. You can reach Steve at email@example.com.
Sales Makes it Happen articles:
On Line Equipment Auction List
This is not a list of companies who hold auctions primarily, but those who conduct on line auctions.
List of many auction sites for consumer and vehicle:
Online Auction Site Review (15 sites)
#1 There are two tiers to the site, one is free, and the other is a subscription for "leads" or "sources". http://www.cfol.com/index.html?content=loginpage The success of Internet portals such as My Yahoo! have inspired companies to develop Enterprise Information Portals (EIPs) as a way to allow business users to access corporate information.
Last Chance--Meet the News Media
More than likely this will be last chance to find the top three Leasing media editors together: Stuart Papavassiliou, senior editor of the Monitor, Lisa Rafter of World Leasing News and myself. (John Semon was not available due to a scheduling conference.) The event is the National Association Finance Association March 17 Scottsdale, Arizona conference
It is rare that I have time away from writing leasing news and traveling with Sue, and often with our grandkids. Bob Robichaud, CLP, Commerce National Bank will be covering the conference for Leasing News. I will be flying in early Friday afternoon to be at the workshop with the two other editors, then attend the president's reception, and out early the next morning to work on Leasing News for Monday.
I don't see personally attending a conference later in the year due to my schedule, and as readers know, generally Leasing News has a "reporter from the industry" to cover these events. The internet editor’s role is getting out the WebNews.
Also at the conference will be Susan Carol, well-known finance and leasing public relations expert speaking on Facebook, LinkedIn and other social media technologies.
David Weiner, The Alta Group, giving an oral report to the one to be published in the spring by Equipment Leasing & Finance Foundation on “The Place of the Independent Lessor 2011”. He will be the key speaker on Friday, March 18th at the NEFA luncheon.
Bruce Winter, a Broker/Lessor member and former Board Member of NEFA, owner of FSG Leasing, very well known and respected in the industry, will detail his 20 years of consecutive profitability including his actual financial statements---a leasing conference first!!!
And a lot more, but if you want to hear the latest as well as ask questions of the news media, this is your opportunity. It most likely will not happen again for several years.
Not to late to register!
Soon to be Air Force Cadet Kimball
Marci Slagle, CLP, of Varilease Finance, Salt Lake City, Utah is proud to announce her daughter McKenna Kimball has been accepted into the United States Air Force Academy with the goal of becoming a flight surgeon. She is graduating high school and will report June 23rd.
Grandson Scott with 49er Alex Smith
At the opening of flag football game season, with his oldest brother Sam, eight years old, on the team, Scott, age two, is restless among the bleachers and finds himself on the lap of 49ers Quarterback Alex Smith lap. Our web designer, Gretchen Gabriel, mother of both Scott, Justin, and Sam, my Sue’s daughter, is also the only female baseball coach in this league. Only in Silicon Valley!!!
And maybe Alex Smith may be back with a new coach and offensive coordinator! Scott liked him!
Scott’s brother Justin:
Salt Lake City, Utah -- Adopt-a-Dog
“Bella came from a home with too many animals. She was used for breeding and didn't get the individual attention and affection she deserves. Bella obviously had a rough time and she is a very scared girl. She will hide until she gets comfortable, which can take some time. Bella isn't trying to be difficult; she just wants to be sure you are one of the good guys before putting her trust in you. Bella deserves a person or family who will be patient with her as she learns what it means to be a normal dog. AGE: 3 years WEIGHT: 12 lbs. Please come meet Bella and our other adoptable dogs at 1955 North Redwood Road. Tuesday - Friday 10:00 AM - 6:00 PM or on Saturday 10:00 AM - 5:00 PM”
Utah Animal Adoption Center, Salt Lake City, UT
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
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Foremost Bank to pay $10.1 million, plus $250,000 penalty
The Federal Deposit Insurance Corporation (FDIC) announced a settlement with World's Foremost Bank, Sidney, Nebraska (WFB), for alleged unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act as well as violations of the Truth in Lending Act in connection with WFB's credit card programs. Under the settlement, WFB has agreed to stipulate to a Consent Order, provide restitution of approximately $10.1 million to current and former cardholders; and pay a civil money penalty of $250,000.
The FDIC determined that WFB did not operate its credit card programs in an appropriate manner with regards to certain over limit fees, credit line decreases, minimum payments due, late fees, penalty interest rates, notices to customers, and collection practices. The Consent Order, in part, requires WFB to correct the violations of law, develop appropriate policies and procedures to ensure future compliance, and effectively monitor third-party agreements and activities.
In agreeing to the issuance of the Consent Order, WFB does not admit nor deny any liability. A copy of the FDIC's Consent Order, Order to Pay Restitution and Order to Pay issued against WFB is attached.
Consent Order and Order to Pay”
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,657 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
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Food Network Chef Guy Fieri Lamborghini Gallardo stolen in S.F.
Good Advice: Start an Advisory Board
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Cecchetti Wine Co. expands 2010 sales to nearly $10M
Wine Prices by vintage
US/International Wine Events
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This Day in American History
1451-Amerigo Vespucci, Italian navigator, was born. The continents of America were named after him ( America is the latin version of his name used on maps in its day.)Italian navigator, merchant and explorer for whom the Americas were named. He participated in at least two expeditions between 1499 and 1502 which took him to the coast of South America. Vespuccis expeditions were of great importance because he believed that he had discovered a new continent, not just a new route to the Orient. Neither Vespucci nor his exploits achieved the fame of Columbus, but the New World was to be named for Amerigo Vespucci by an obscure German geographer and map maker, Martin Waldseemuller. Ironically, in his work as an outfitter of ships, Vespucci had been personally acquainted with Christopher Columbus
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