Good afternoon. We are a lease broker that started in 1994. For the past month or two we have been doing business with two vendors who are working together in a fraud ring. We uncovered this a week or so with the help of one of our funding sources (Manifest Group). We tried to fund a transaction that was funded twice before.

You mentioned these two "vendors" back in March in the Leasing News. The "vendors are" Telecom Management" of Orange, California and "Washington Communications" in Baltimore.

I wanted to warn the leasing community that these folks are still out there doing their thing. I was unsure the best way to go about this. We are a member of NAELB. I know the detectives in Costa Mesa and Baltimore are working on this but they are not slowing them down in any way. If you have any ideas please let me know. Thank you in advance for your effort and consideration.

Name Withheld

--- Ted Pierce---Colonial Pacific/GE Lament 7/11/2001 ---

( We have attempted to obtain a comment from Colonial Pacific, and would be glad to print any comment they may have. I have known Ted Pierce for almost 30 years. He is one of the most professional persons in the leasing industry, and with his permission, we are printing his side of the story ( received June 29th ) to learn if there are any others with a similar situation. editor )

Kit, I just ran into an interesting situation involving Colonial Pacific /GE. You and other brokers that work with them may already know about the situation but here is what just happened to me.

I had a $75,000 approval with a customer through Colonial Pacific. Software. I just received a note from GE that the customer wanted to cancel the approval so I called C/P trying to find out what's going on. This is the information I have so far.

GE apparently has a division known as DELV or something like that. A lessee or a vendor can go direct to that division which falls under the C/P credit umbrella and that division of GE is treated the same as another broker. In other words, they can send in an application & if it has already been submitted or approved for another broker, such as myself, it is treated as a dual submission. In this case I did not receive a memo stating it was a dual submission, just a memo that the lessee wanted to cancel the deal with me. The fortunate thing is that I have a signed agreement with the lessee with money on the table. The unfortunate thing is that I have no idea what DELV's buy rates are, if they have to add points to survive, i.e., do they have an unfair advantage over C/P's brokers?

I expressed my concerns to the people at C/P and in all fairness, they don't know much about DELV and they said it has only happened a couple of times. In this case it happened to me on a $75,000 approval on a lessee that we have been working hard with to satisfy his needs--a very difficult lessee regarding credit and financials. I informed C/P that I felt this was almost unfair competition in that we are now competing with another division of GE for the same business. And is it fair competition? Who knows. I can understand broker to broker competition. We all pretty much have a level playing field with C/P and each other but to have to compete with another division within the GE umbrella doesn't seem right. I might be missing something here but so far more questions are unanswered than answered.

Anyway, this message is just a heads up for other C/P brokers. When I have a conversation with C/P on Monday I will suggest that they may be better off giving the broker community any leads that come in to them. Instead of making us compete with another division of GE, give us the opportunity to handle the business on a level playing field. Many of us have long term relationships with C/P. I have and I've always valued it and want to continue to do so well into the future.

Ted Pierce
Insta Lease
tpierce2@ix.netcom.com
916-983-1122

--- Fraud Alert: Vector Services, Granite Bay, Ca. July 3, 2001 ---

We recently funded a $25k lease for a painting contractor in West Sacramento, Ca. The company was established 8 years ago and had good bank balances. We received partial copies of 98, 99 & 00 corporate returns reflecting earnings of $439k, $367k and $390 respectively. Despite excellent credit the principal's CBR didn't score due to revolving balances of $389k - dated to 1974 with lots of PAID accounts....100 inquiries. We were also considering a second transaction for audio video equipment for $36k.

Our lender was contacted by Quicktrax advising they received an order to inspect similar equipment for another lessee at the same address in West Sacramento. Long story short....another broker was preparing to fund another lease for another company owned by the same principal for exactly the same equipment.

Fraud Alert: Vector Services, Granite Bay, Ca.

The vendor was the same, the equipment was the same, the cost was the same but the invoice numbers were different. The vendor is Vector Services Corporation, 6963 Douglas Blvd. Suite 263, Granite Bay, Ca.

We have decided not to proceed with funding and asked our funder to stop payment on the vendor check, which they have done. The other broker has advised they will cancel their approval.

We are going to report these events to the local DA and request that they look into the lessee and vendor.

If the credit or vendor sound familiar please feel free to call me for details.

Rick Wilbur
Managing Partner
Media Capital Associates, LLC
480-941-8558 ext. 104
480-941-4588 - Fax
http://www.mediacap.com

                          -------U.S. Capital, Santa Barbara, California -------

A short while ago JDR Capital Corporation received a faxed communication from U.S. Capital Corporation of Santa Barbara, California in which the latter was informing the leasing community of a new program it was offering. In its correspondence it described a leasing line of 30 million dollars which it was offering to brokers to fund their leases. It included full details as to credit criteria and rates.

For a period of years prior to the receipt of the aforesaid fax JDR had received a great deal of business from U.S. Capital. Its representative, Ken Nelson, never demonstrated any cause for concern. When the fax arrived, updated due diligence was performed which also did not indicate any cause for concern. Consequently, JDR offered the program to its customers.

Not long after JDR received numerous approvals and, in some cases, had documents prepared and forwarded to U. S. Capital for funding, U. S. Capital and Ken Nelson appeared to drop off the face of the Earth. Although we were able to leave voice-mail messages we had no success in speaking to a live person. We received no return phone calls or any other communication. As quickly as possible we notified our broker customers that a problem appeared to exist and we suggested that they try to get their deal funded elsewhere. As we have many other funders we are in the process of attempting to find alternative financing for those transactions In the last week or so we have received numerous calls from other super brokers and brokers that are experiencing an identical problem with U.S. Capital. It seems that they have created a very widespread problem in a very short period of time. We are sure that there are a great many brokers and/or vendors that have been affected by this. The leasing community should be aware of the problem. As to JDR we are doing our best to assist those that we dealt with.

If you desire further information please feel free to contact me.

Very truly yours,
Don Forman
JDR Capital

 

(We have received many complaints from many brokers and super brokers about this company. This is only one of the many we have received. editor)

---Lease Capital---Martin Barteske Complaint---

Mr. Barteske---

This came to us originally as a complaint on November 28 for the Leasing News Bulletin Board.
You responded by e-mail on several occasions, the last being December 2, that the funds would be returned. Here it is 13 days later, and according to lessee, the money has not been returned. Here is what Keith Ahearn as to say.

They are again asking me to post this, from very beginning, and I would like to know if there is anything new you would like to add before posting this on LeasingNews, which we will do after January 2 as 30 days from your promise date is a reasonable period of time.

Mr. Menkin,
I would like to inform you of the status of my failed sales / leaseback commitment with Mr. Barteske. I realize that Sheila has been corresponding and has informed you of all of the lies and misdirection that Lease Capital has done. Realizing that not doing the proper research caused the majority of my problems. When I was contacted by Mr. Barteske, on the footer of his fax was , Member of the NAELB and even the last fax received still has it . Below this is the Better Business Bureau of So. Cal.
Atleast when you pull them up on their web site they inform you that doing business with Lease Capital is pretty risky. As of this date I have not received the $3,825.00 and it looks like I never will. Meanwhile I watch my business slowly slipping away, not just from the loss of revenue but from losing 6 weeks of valuable time. Most of my vendors have had enough of waiting for me to find the funding necessary to continue on. I'm getting close to losing every thing i've worked for and pretty much lost hope. I don't intend on this letter to sound like I'm crying the blues, quite the contrary. It's a shame that a piece of "work" like Barteske can topple small business owners with cash flow problems so easily while riding on the coattails of brokers who work hard at their profession.

Thank you,
Keith Ahearn
1unicorn2@PRODIGY.NET

Precision Diagnostics Plus Inc.
Kit, As of today, Jan 6, 2001, We have not heard or received any of the money that we were supposed to have returned to us from Mr. Barteske. He last told us that he was looking into the situation and would let us know something, but we have not heard a thing. He can write a good letter when he needs to cover his butt, but when it comes down to it he just a bunch of lies and excuses.

Keith Ahearn
1unicorn2@PRODIGY.NET

Better Business Bureau Report on Martin Barteske http://www.labbb.org/scripts/cgiip.exe/WService=wsbroker1/C%3A/Inetpub/wwwroot/
SouthlandReport/de fault.htm?hAddrID=1&hAKAID=1&hCompID=13075332

We rate this company as having an unsatisfactory business performance record. Complaints contain a pattern of allegations that the company issued commitment for equipment leases, obtained first and last month lease payments and documentation fees, but that leases were not funded. One complainant paid approximately $46,000 and was promised a lease within 7 to 10 days but was unable to obtain a lease or a refund. All complainants allege that the company failed to respond to telephone calls and/or fax requests for refunds. The company responded to one complaint by stating that there were inconsistencies on the applicant's trade or bank references. The company responded to another complaint by stating that they were still trying to obtain better terms, after the agreement had been signed, but that the applicant decided not to pursue the lease. The company denied all complainants any refund, referring to their contract that states, in part, that the commitment fees paid will be retained if the lessee cancels. One complaint remains unanswered. The Better Business Bureau does not endorse, recommend or disapprove of any company, product or service.

Additional Phone Numbers
(714) 963 - 4995
(800) 964 - 3664
(800) 964 - 2140
(866) 836 - 5600

Additional Trade names
Lease Capital
MedCare Assurance Company