Leasing Companies Duped for $83 Million

In an exclusive story, the New York Post reports "swindlers used scissors and glue to forge documents that made them millions while wiping out jobs on three continents in the collapse of New Jersey computer company Allserve Systems Corp."

The North Brunswick firm went belly-up November (ironically the same judge as NorVergence*) owing $83 million to equipment leasing companies from San Francisco to Boston, but guess what, the collateral and cash are missing.

*

05-60401-RG Allserve Systems Corp.

Case type: bk Chapter: 11 Asset: Yes Vol: v Judge: Rosemary Gambardella

Date filed: 11/18/2005 Date of last filing: 12/29/2005

Among the creditors are Bank of America, Bank of Lodi, Bank of the West, Central Valley Community Bank, CIT, Citi Capital, Commonwealth Capital, Continental Bank, Excel Bank, Fifth Third Leasing, First Financial, GATX Technology, Irwin Business Finance, Key Equipment Finance, MB Financial Bank North Fork Equipment Leasing, Overland Leasing Group, Pullman Bank & Trust, Republic Bank, Sovereign Bank, CIT Group, US Bancorp Technology Leasing,

Bankruptcy Court list of money claimed by creditors:

http://leasingnews.org/PDF/Financial%20Debt.pdf

Documents obtained by The New York Post "...show that poorly forged invoices and a fake financial statement could account for much of the missing money."

The New York Post reported that “Major US companies are in a federal bankruptcy court, demanding they get back $83 million they loaned” to Dinesh Dalmia's New Jersey-based outfit. The Post has openly linked Dal-mia to Allserve Systems Corporation, which filed for bankruptcy on November 18 in a New Jersey court. The North Brunswick firm went belly-up in mid-November owing $83 million to equipment leasing companies from San Francisco to Boston , but leaving only a small portion of that in collateral to be divvied up among creditors. Christopher Byron reports that Allserve has claimed in court that “its business was, in effect, swallowed by a sink-hole that opened under its offices” in Chennai last March.

Reportedly lawyers on both sides have been trying to track down the missing computer equipment and cash. Perhaps sent to India or to an offshore bank account, both US, Great Britain and India law enforcement are seeking answers.

"Dalmia himself has reportedly moved on to the BPO business and is known to be running major call centers at Gurgaon, Bangalore and Chennai!," reports Sucheta Dalal, in “financialexpress.com.”

His whereabouts and assets are reportedly unknown by the authorities.

Allegedly long linked to the Allserve network in the Indian press, Dinesh Dalmia insists he has nothing to do with the now bankrupt company.

"The Chennai correspondent of The Indian Express, Jaya Menon, checked out the addresses listed under the Allserve name," Chennai reported. "As in India , the American creditors allege there is no explanation for $35 million of cash that vanished from the Allserve books between July and October last year.”

According to their web site, the Allserve network boasted of operations in New Jersey , Texas and four other states, as well as overseas. The web site states the company had a work force of 3,000, and in the company claimed revenues of $97 million, and spoke of plans to double its worldwide payroll to 6,000 by the start of this year.

http://prweb.com/releases/2004/1/prweb97656.htm

A typical internet “ad” for outsourcing:

" Allserve Systems India Lt

Allserve Systems - an international IT services company providing comprehensive IT and IT enabled solutions to global Fortune 500 companies. Our 3000-strong core team of professionals with multiple platform skills and rich domain experience in various industry segments meets your diverse requirements in IT services, IT-enabled services, business process outsourcing and enterprise services management. "

The FBI, Interpol, and India authorities would like to talk to him. Reports printed by the New York Post from India newspapers have drawn the attention of E. Lawrence Barcella, a Washington , D.C. attorney, who states he represent the Mr. Dalmia and demanded a retraction of the reproduced stories.

Some of the questions involve last minute invoices, looking as if they were pasted together, totaling $2.5 million, for equipment delivered, but no trace can be found. A check for $11 million was written to one company three months before the Allserve bankruptcy, fitting in right before the window of being returned. The invoice is from the same address as Allserve.

The New York Posts reports a separate document, purports to be an audited financial statement for an obscure Allserve affiliate called B2B Solutions Inc. The company's audited financials, on file with the U.S. Securities and Exchange Commission, show B2B Solutions Inc. to have had declining revenues of barely $17 million in 2003, along with less than $2.5 million of assets and virtually no book value.

Financials were "pasted together," now in retrospect, many red flags should have been discovered, such as no address or telephone number on any of the documents or correspondence submitted, yet IBM Credit and CIT Business Finance extended $20 million to the Allserve affliate, which on the documents show which induced the leasing companies

But the New York Post reports the bogus financials instead show B2B Solutions Inc to have been brimming in 2003 with twice as much in revenues, six times more in assets, ten times more in profits, and twenty times as much in book value.

"B2B Solutions Inc., which now goes by the name Vanguard Info- Solutions Corp., is not part of the Allserve bankruptcy proceeding, “ the New York Post observes.” But the two entities are so closely intertwined that even investigators for Allserve's creditors say they've had trouble telling them apart...Over the last two years, all three companies have shared each other's New Jersey office space and phone numbers. And top officials for each have routinely signed documents as officers for other firms in the group."