Leasing News

Headlines---

Pictures from the Past ----1999-US Bancorp Manifest Funding Services

Classified Ads---Jobs Wanted

NAELB Increases Members 18%, up 74 from last year

Business Leasing News---Latest Edition

Fitch Webcast/Teleconf: 2003 ABS Outlook, Wed. 01/15 10AM

Investors Lose $80B Par Value On 2002 Defaults--Fitch

Banknorth to Close on American Financial Today

"Lessors.com"-- not "eLessors," you Dummy!!!!-Alexa Report

What happened Kit? No story about your Niners??

Samuel Joseph Gabriel

### Denotes Press Release

Top Storis of 2002----The Funding Tree

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Pictures from the Past ----1999—US Bancorp Manifest Funding Services

(Click here to see image)

“Meet the Northwest Team”

1999- US Banccorp Manifest Funding Services

From left to right, top to bottom, Regional Sales Manager Jim Stekl, Broker Sales Representative Deb Schnaible, Account Executive George Vandel, Account Executive Jeanna Welgraves, Relationship Specialist Doc’s Kari Beck, Account Executive Michelle Williams, Relationship Specialist Doc’s Emily Lindeman, Sr. Documentation Analyst Lisa Smith

Classified Ads---Jobs Wanted

Credit: Long Beach, NY. Credit officer w/ more than 20 years of experience. Seeking position in which I can utilize my credit- collections, communication &management skills. email:michaelschaubeck@webtv.net

Credit Manager: Kansas City, MO. Equipment finance and leasing, inventory finance, construction & agricultural equipment.

email: impens@earthlink.net

Finance: Atlanta, GA

Twenty five plus years experience in middle market lease/ asset based/cash flow transactions. Heavy banking and credit background, with particular expertise in structure and negotiation. Email:brown235@bellsouth.net

Finance: Lyndhurst, NJ

CFO w/20+ years leasing/financing. Respected by lenders/rating agencies full & fair financial reporting. Outstanding record restructuring debt. Adept at investor relations and mentoring people. Email:joemcdev@aol.com

Finance: Orange County, CA

CFO/Controller/IT Director - 15 years experience in leasing and ABL. Experienced in: Accounting, Finance, Systems, Tax, Operations,Securitizations, etc.MBA, ELA member. Many accomplishments. Email:gosween@cox.net

Legal: Los Angeles, CA

Experienced in-house corporate and financial services attorney seeks position as managing or transactional counsel. Willing to re-locate. email:sandidq@msn.com

Full list, Classified:

http://65.209.205.32/LeasingNews/JobPostings.htm

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NAELB Increases Members 18%, up 74 from last year

Associates 17

Funders 40

Brokers 430

Totals 487

Gerry Egan

President

NAELB

President

TecSource, Inc.

5621 Departure Drive, Suite 113

Raleigh, NC 27616

Phone: 919-790-1266

Fax: 919-790-2262

E-Mail: mailto:GerryEgan@ForEquipmentLeasing.com

Internet: http://www.ForEquipmentLeasing.com

National Association of Equipment Leasing Brokers

Mail: 5024-R Campbell Blvd.

Baltimore Md. 21236

Phone: 800.996.2352

Fax: 877.875.4750

Email: info@naelb.org

Contact: Bill Miller, CAE or Maria Turner. They will refer any non-administrative matters or questions to NAELB Board members for follow up.

This is a unique association as it is basically for new and established leasing brokers in the United States; other segments of the industry are "members", but do not have any "voting rights". Only brokers may vote for the board of directors

and change of policy in the organization.

The aim of NAELB is to help the leasing broker primarily. The mission is education, standards, and "betterment" for leasing brokers. The dues are quite economical, conferences very well attended, with specialties of legal and colleague, grass roots support of a "brotherhood," if that word is acceptable today ( they have real, down to earth espirit de corps ). Directors are actually voted upon "from the floor", with actual "contests" for seats on the board of directors. Perhaps the most unique feature, worth much more than the $295 broker and $700 funder .

The conferences are also the most economical in registration, hotel room, and costs. It is not geared toward the large corporations with expense accounts,

but entrepreneurs, people in business for themselves. There are broker members with more than ten employees, but the majority have less than five full time employees.

Here is a breakdown of members since June 30^th, 2002:

NAELB Membership 6/30/02 12/31/02

Broker Members 404 430

Funder Members 40 40

Associate Members 16 17

Total Membership 460 487

NAELB approaches their members as if they were part of the family. This is quite evident by the contribution since inception by the hard work and contributions of two legal experts, Barry S. Marks and Joseph Bonanno, who have worked for members at all times of the day and for no pay but to help out. Mr. Bonnano has a website of legal leasing information: http:// www.leasingissues.com and Mr. Marks has published a book on leasing, available by contacting phdleasing@hotmail.com or bsm@blik.com.

The NAELB board of directors has an excellent track record for keeping

expenses down, providing meaningful services, and getting other members to volunteer their time to improve the association.

This is a unique "billboard" via their website where members can communicate with each. It is also a semi-listserve as members can also choose to have e-mail directed to them with answers to questions or inquiries about where "to place a deal" or express experience with a funder or super broker.

The association also provides discounts on Airborne Express and other products

to its members.

Inquiries regarding general association information, such as membership info and renewals, conference and meeting schedules, etc. should be directed to the main NAELB office at 800-996- 2352 or go to the website: www.naelb.org.

National Association of Equipment Leasing Brokers Conference

and a copy of their electronic newsletter

http://two.leasingnews.org/temporary/58917684.htm

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Business Leasing News---

Latest edition

http://two.leasingnews.org/temporary/BLN.htm

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Fitch Webcast/Teleconf: 2003 ABS Outlook, Wed. 01/15 10AM

NEW YORK----Fitch Ratings will host a webcast and conference call discussing its 2003 asset-backed securitizations (ABS) credit outlook and performance update on Wednesday, January 15, 2003 at 10:00 A.M. Eastern Standard Time. The call and webcast are open to the general public.

Managing and senior directors from Fitch's ABS group will present 2003 forecasts and give an overview of 2002 performance for the following asset types:

-- Aircraft

-- Equipment Leasing

-- Auto Loans and Leases

-- Student Loans

-- Credit Cards

In addition to a general outlook for the aforementioned asset classes, Fitch analysts will comment on specific issuers in each sector.

Those participating in the webcast are invited to enter 'www.mshow.com.' Under 'Join a Show,' entrants should then type in show number '83733.' The site will then prompt participants to input their registration information. A link to the webcast will also be available on Fitch's own site at 'www.fitchratings.com.' For those participants without sound on their computers or for those who only wish to listen to the webcast can gain access to the audio for the conference call by dialing 888/266-3888 (domestic) or 706/643-1860 (international); no passcode is required. A replay of the web cast will be available for 60 days on both web sites.

CONTACT:

Fitch Ratings

Sara Grohl, 212/908-0564

Matt Burkhard, 212/908-0540 (Media Relations)

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Investors Lose $80B Par Value On 2002 Defaults

Fitch Ratings- Marking an unprecedented decline in corporate credit quality, 2002 produced $109.8 billion in high yield defaults and a new par based record default rate of 16.4%, exceeding 2001's $78.2 billion default volume and 12.9% default rate. The number of defaulted issuers actually decreased in 2002 to 163 from 2001's 173, but the average size of 2002 defaults, at $674 million per issuer was up 49% from 2001's $452 million per issuer. The biggest factor contributing to the volume growth was by far the long list of supersized telecommunication defaults. The likes of Global Crossing, McLeod, Telewest and foremost, WorldCom, contributed $59.6 billion in defaults, a full 54% of the year's volume tally. The average default balance for telecom issuers was $1.3 billion in 2002. The default rate for the sector, was an astonishing 43.5% for the year and followed a 23.9% default rate in 2001. The impact of the sector's crisis on default statistics in the past several years cannot be overstated. In 2001 and 2002, telecommunication defaults totaled $87.8 billion, nearly half the total default toll for the two years of $188 billion. Another remarkable statistic - the combined volume of defaults in 2001 and 2002 exceeded the total volume of bond defaults in the U.S. from 1980-2000.

Fallen angels (companies rated investment grade one year prior to default), including WorldCom, represented $35.7 billion of 2002 defaults, or 33% of the year's total. The default rate excluding fallen angels was 12.4%. This rate compared to a 2001 default rate excluding fallen angels of 9.7%.

The top industry default rates in 2002 included: telecommunication at 43.5% on default volume of $59.6 billion, insurance 35.2% on default volume of $3 billion, cable 34.4% on default volume of $16.5 billion, metals and mining 20.2% on default volume of $3 billion, and utilities 14% on default volume of $6.5 billion.

The year's top ten defaults represented 57% of 2002 default volume with WorldCom making up nearly a quarter of the year's volume.

Excluding fallen angel defaults, 20.9% of the year's defaulted issues consisted of bonds sold in 1999, 21.3% bonds sold in 1998 and 14.7% bonds sold in 1997. The three issuance years continued to produce the bulk of defaults.

Excluding fallen angels, the default rate for the remaining universe of high yield bonds was down substantially in the second half of the year. The default rate was 9.3% through June but just 3% for the six months ending December. While defaults are still running at above average annual levels, for the traditional high yield market they have slowed considerably from the frenzied pace of the first half of 2002 when large telecom and cable defaults caused default volumes to soar.

The weighted average recovery rate for all defaults in 2002 was 22% of par. In a reversal of last year's trend, fallen angel defaults depressed the average recovery statistics. The weighted average recovery rate excluding fallen angels was 26% of par, a material improvement over the 15% of par recorded in 2001. In total, investors lost 78% of par value on the year's defaults, grossing more than $80billion.

Perhaps the biggest sign of the high yield market's continued vulnerability at year end was the persistently large concentration of bonds rated 'CCC/C'. The 'CCC/ C' pool started the year at $117 billion and ended the year at $116 billion. Despite the year's long list of defaults, downgrades continued to replenish the 'CCC/C' bucket. In each quarter of 2002, the dollar volume of downgrades towered over nearly negligible upgrades.

Fitch's complete analysis of 2002 results with a full listing of all defaults, an analysis of default and recovery rates by industry and seniority, and a review of credit quality measures for the U.S. high yield market will be available on the Fitch Ratings web site at 'www.fitchratings.com' in early February.

Overview of the Fitch U.S. High Yield Default Index:

Fitch's default index is based on the U.S., dollar denominated, non-convertible, speculative grade bond market (the rating equivalent of 'BB+' and below, rated by Fitch or one of the two other major rating agencies). Fitch includes rated and non-rated, public bonds and private placements with 144A registration rights. Defaults include missed coupon or principal payments, bankruptcy, or distressed exchanges. Default rates are calculated by dividing the volume of defaulted debt by the average market size for the period under consideration. Fitch's high yield default studies are available in the 'Credit Market Research' section at 'www.fitchratings.com'

Contact: Mariarosa Verde 1-212-908-0791 or Paul Mancuso 1-212-908-0225, New York.

Media Relations: James Jockle 1-212-908-0547, New York.

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Banknorth to Close on American Financial Today

PORTLAND, Maine----Banknorth Group, Inc. (NYSE:BNK) announced that it will finalize its acquisition of American Financial Holdings, Inc. (NASDAQ:AMFH), parent company of American Savings Bank, a Connecticut chartered bank which has 34 branches in central Connecticut, today, February 14, 2003. Banknorth has received all required regulatory approvals and American Financial shareholders previously voted their approval of the acquisition.

The transaction is valued at approximately $709.3 million in cash and stock. The acquisition will increase Banknorth's assets in Connecticut to more than $4 billion and increase its deposit market share position in the state from 14th to 5th. In 2002, Banknorth acquired Bancorp Connecticut, parent company of Southington Savings Bank, and American Financial acquired American Bank of Connecticut. The combined entities will operate as Banknorth Connecticut.

Under the terms of the transaction, each share of American Financial common stock will be exchanged for either $32.00 or 1.22 shares of Banknorth common stock, plus cash in lieu of any fractional share interest. Elections of stock or cash will be subject to allocation procedures that will ensure that 50% of American Financial common stock outstanding immediately prior to the completion of the transaction will be converted into shares of Banknorth common stock and 50% will be converted into cash.

Election forms will be mailed in late January and American Financial shareholders will have 20 days to elect their preference for cash or stock, ending on or about February 19, 2003. The transaction is intended to qualify as reorganization for federal income tax purposes. As a result, the shares of American Financial stock exchanged for Banknorth stock will be transferred on a tax-free basis.

Banknorth Group, Inc. is one of the country's 35 largest commercial banking companies with total assets of $22.5 billion at September 30, 2002. The Company's banking subsidiary, Banknorth, N.A. operates banking divisions in Connecticut, Maine, Massachusetts, New Hampshire, New York and Vermont. Banknorth also operates subsidiaries and divisions in insurance, investment planning, money management, leasing, merchant services, mortgage banking, government banking and other financial services.

CONTACT:

Banknorth Group, Inc.

Brian Arsenault, 207/761-8517

SOURCE: Banknorth Group, Inc.

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“Lessors.com” -- not “eLessors,” you Dummy!!!!—Alexa Report

Saw your response to Wayne Hunt and thought I would share the following;

We actually closed the www.elessors.com site last September. All traffic going

to that URL is directed to www.lessors.com. I might therefore question the

Alexa report (although like Wayne, I question the accuracy of all such reports

; see the end of this email), considering an incorrect URL is being used

to evaluate a closed site and is still reporting volume numbers. Our own questionable data indicates traffic to our site has increased more than 40% over the last three months.

Actually, we have not gone to a paid subscription policy. We still

provide free access to the Lessors Network for non-members.  Full visitor access is available beginning Monday morning and closing the end of business (EST) Wednesday.

Restricted visitor access is available 24/7. We are also the only online leasing

site providing update Business News over the weekends. (Like how I slipped that

in?)

Getting back to the issue of web site hit counts, I though you might be interest

in the following article I found on the internet awhile ago;

------------------------------

What You Need To Know About Volume

Unfortunately, you may have been led to believe advertising on a web site reporting a high number of “hits” is always the better advertising investment. The

following may change your mind.

Most advertisers think each “hit” represents one visit to a web site,

but is it? Different statistical systems count hits differently, which is why it's

easy to be misled by reported hit volume. Suppose a web site has a main page including text and 10 small graphics. The way the web works, you'll ask that site for 11 objects, the main page plus the 10 graphics. You might think of this as one hit, but some statistical systems count that as 11 hits! Some systems even continue to count hits if you reload the page, or go to another page and return to the first page. Now, one visit may have been counted as 22 hits!

Here is another consideration. America Online (AOL) will “cache” your

page. In other words, the first AOL user who visits a page causes that page to be

written to an AOL cache machine. From then on, whenever any AOL users request this page, the AOL caching machine checks with their computer to see if the page has changed. If it hasn't, it delivers its cached copy, resulting in significant speed improvements for the AOL user, but the statistical count may be less.

Because of the hypertext nature of the Web, if a site has 5 pages, there is no

way of knowing in what order a visitor will begin their visit. Some may start at

page 3, read pages 3 and 4, and then leave. If hits are only measured beginning

from page 1, none of these visits will be counted.

Finally, there are many “gimmicks” a web site can use to artificially

inflate their number of hits. For example, banners promoting “Free”

are strategically placed on other web sites. A hit is registered whenever anyone

clicks on the banner and is delivered to the web site even thought the visitor has

no interest in what that site offers and immediately leaves. Another trick is attracting non relevant visitors (at least from an advertisers point of view) using “fluff”content such as contest, news, gossip, etc.

You can begin to see how the number of hits reported by a web site can be easily

skewed, which may account for the vast difference in hits reported by web sites

competing for your advertising investment. We're not saying hits aren't important,

but advertisers should also consider the actual content of the site and the relevance

of the site's visitors to the advertiser.

Keep up the good work Kit.

Regards,

John Semon

The Lessors Network

www.lessors.com

(I thought the reason your site fell to the bottom was the registration policy. But thank you for pointing out that we never up-dated your website address from when

we started this.

Since January 1, you have a policy that only paid members can access certain

parts of the site, and actually the site itself ( only on East Coast office time is

it available to non-members .) I surely can appreciate want to re-coup some

of the costs involved in hosting your site.

I start Leasing News at 11pm every night, and the lessors.com site is closed, unless you are a member. The “viewing time” is East Coast business hours.

I also tried over the weekend, and it was closed to a non-members. I will try again next weekend. There are many of us who go on the internet over the weekend.

Being an original member of Website Garage ( remember that group, purchased

later by Netscape ), Site Promoter ( still around ) and Web Trends ( have the

founder version ,” I am aware of “volume;” however, I still defend Alexa as

an indicator of what is “popular.” I understand the purist don’t want to

accept it as it is not “scientific,” but the information it provides

is very good and I think somewhat reliable.

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What happened Kit? No story about your Niners??

Jeff Maaske

jeff_maaske@hotmail.com

(The 49er flag is flying at half mast at the office. Several other readers have asked

for a report, but all I can say is Garcia wasn’t feeling well, Maruicci

was stuck in the running game, Ahmed Plummer was hurt, Terrell Owns

forgot his pen, and we were lucky to make it to the playoffs. The 49ers all year long were a very mercurial team under the direction of an idiot. We lost because

we sucked. That’s my report. Editor )

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Samuel Joseph Gabriel

While I have four grand children from my late wife, Sue became a grandmother at 12:58pm as her daughter Gretchen had a baby boy, Samuel Joseph Gabriel, 7 pounds, 13 ounces, 19 1/2 inches tall, at Good Samaritan Hospital, The actual

delivery was less than a half hour, and may have been quicker, but they were

not ready for her to deliver so soon.She was smiling all the way. Steve

took Gretchen to the hospital around 7:30am in the morning. Sue joined them

and was there all the time. Her fourth grade class celebrated with a big cheer on the telephone. Gretchen and Sam will be there for a full two days before going home.

I took mostly film pictures, but here are two short videos with sound and a

still picture.

Short Video 1

JPEG Picture

Short Video 2

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Top Storis of 2002----The Funding Tree

Perhaps it was the close association with the name "Lending Tree," which

advertises heavily on radio and tv, or maybe it was promotion of 15% advance

with first and last that got financing for "challenged credits," high broker

commissions, or maybe it was all of the above. Rene Tankersley of Landline Magazine,

The official publication of the Owner-Operator Independent Driver Association, won

a journalist award for her coverage.

June 17, 2002

by Rene Tankersley Landline Magazine

The official publication of the Owner-Operator Independent Driver Association

The president of an advance-fee finance company has been arrested on seven felony counts.

Kendra Bernal, of The Funding Tree (not to be confused with The Lending Tree) and Integrity Group, was arrested May 31 in Riverside County, CA. Under the two company names, Bernal offered financing of commercial vehicles and other equipment.

Bernal faces six felony counts of taking money and personal property of a value exceeding $400 and one count of engaging in the business of a finance lender and broker without obtaining a license from the Department of Corporations.

The complaint alleges Bernal operated without a license from September 2001 through May 30, 2002, and "took, damaged and destroyed property of a value exceeding $150,000." The complaint listed money and property taken from Freedom International, Luis Ojeda, Joe Diaz, Fernando Hernandez, Diversified Sales and Service Corp., and Jose Martinez.

Finally, the complaint noted a violation of probation had been filed based on these allegations. Bernal was serving a 60-month probation, which prohibited her from receiving or accepting any type of money on behalf of her employer, and from purchasing, selling, registering, transferring, leasing or renting a vehicle without prior permission of the probation officer.

The latest charges came five months after the California Department of Corporations issued a desist and refrain order in January. The order warned Bernal and her companies to stop engaging in business as finance lenders or brokers without a license in violation of the California Finance Lenders Law. The same month, Land Line became aware of Bernal, after two OOIDA members read Land Line's report about advance fee finance companies and called in their complaints about Bernal.

OOIDA member Donny McCain paid The Funding Tree a $2,000 deposit Sept. 9, 2001, at the Great American Trucking Show in Dallas, for trailer financing. McCain never received the promised financing, but REB Express, the company where he was leased, put up the remaining $9,707 for the trailer.

OOIDA member Robert Kovalcin paid Integrity Group $8,795 in December 2001 for a down payment and fees for truck financing that never came through. After months of telephone calls and complaints, Kovalcin finally received $8,400 of his money back last month.

Rene Tankersley

June 14, 2002

Leasing News has been writing about this company since October of last

year. It appears all one has to do is send a fax or e-mail that you do “deals

no one else will do,” and you get leasing application, including advance rentals.

It appears some companies live off of this.

Leasing News wrote about Kendra Bernal being on probation, including conformation with the District Attorney’s office, but that did not stop submitting applications. While the government moves slowly, it still gets to the destination. Kendra Bernal is accused of being in violation of her parole. Here are:

Kendra Ameliarae Bernal Charges

http://www.leasingnews.org/docs/kendra.htm

In addition, here is the Riverside Better Business Bureau report:

http://www.labbb.org/scripts/cgiip.exe/WService=wsbroker1/C%3A/Inetpub

/wwwroot/SouthlandReport/default.htm?hCompID=13158660&hAKAID=1&hAddrID=1

Better Business Bureau Report

The Funding Tree, Inc.

6141 Riverside Avenue Suite 1

Riverside CA 92506

Business Started: 01/01/98 File Open Date: 08/29/01Last Report Date:06/12/02

Principal Contact:Kendra Bernal Phone: (909) 369-3150 Fax: (909) 369-3420

EMail: fundtre2@pacbell.net Web Address: http:// www.thefundingtree.com

Bureau ID: 13158660

Nature of Business

This company's business is providing equipment leasing and consumer financing loans

services.

Bureau File Experience

We rate this company as having an unsatisfactory business performance record based on a pattern in their customer complaints which causes us concern.

Complainants allege dissatisfaction with the company's failure to provide refunds of deposit amounts for equipment leases not funded.

Complainants contend they gave the company thousands of dollars in the form of first lease payments, insurance fees, processing fees, or other costs associated with leasing trucks or other equipment. After extended delays of several months, loans or lease agreements remain unfulfilled by the company.

The company responds to complaints by explaining in most cases the "leasing pool" has not closed and they continue to work diligently to resolve the matter. One complaint was responded to by an advisory that the lease had been fulfilled. Some complaints were closed as disputed, meaning the customers were not satisfied with the company's response.

One complaint remains unanswered.

We advise careful consideration on choosing a funding source to expand or start a business.

The complainants for this company have report ably invested up to several thousand dollars, waited several months and still do not have the funding necessary to complete their business plan.

Our experience with similar offers has been many who complain never receive a refund when no funding occurs, or, previously undisclosed processing fees allow the company to retain sometimes 50% of the amount paid. This means the investor receives back half the amount invested.

We routinely suggest contacting the Small Business Administration in your area for informationon venture capital sources. The Better Business Bureau does not endorse, recommend, or disapprove of any company, product or service.

Sent to Leasing News October, 2001

“The Funding Tree, Inc., Riverside, CA has been accepting sub-prime deals on

trucks and other equipment. They collect 15% prepaid residuals and doc fees

up front. They cannot fund and getting refunds is next to impossible. I know

of deals that are 3 plus months old. They also claim on their letterheads to

be members of the NAELB. They are not according to Maria at the NAELB.”

Some deals are as old as 7/01

Gary W. Psaledas

Western Equipment Financing, Inc.

83 Abajo Dr., Edgewood, NM 87015

505-286-5437, Fax 505-286-543

Thirty-three years, Member NAELB

Funding Tree Response:

“We have 3 deals that are 120 days aged. 1 is a managed credit program,

which means, this is normal. The vendor receives the payments and once the

lessee makes 4 or more consecutive, on time payments the vendor is paid.

The other two transactions are trucking transactions.”

Kendra Bernal

The Funding Tree, Inc.

6141 Riverside Ave., Suite 1

Riverside, CA 92506

909.369.3150 Office Phone

Looking into this further, Leasing News reportedly found over thirty transactions

not funded:

Dealers Not Funded

Midwest Truck Sales, Inc. John Saied 888-446-1127

R.E.B. Express Ellie Corbello 888-968-3563 X 113

Volvo of Utah Rebecca Hall 888-478-2276

Rush Finance Brent Hughes 800-973-7874

Coastal Finance(broker) Jim Coxe 800-887-0843

Volvo of Albuquerque Venita Coffee 505-843-7703

Inland KW-Phoenix Jerald Collens 800-258-7791

TEC Equipment Georgia Field 800-497-7667

Idaho FL Frank Flemming 800-658-5084

Danforth Capital (broker) Dan Chagnon 800-910-2225

Whited Trucks Mark Walsh 800-786-4736

IMCO Trailers Paul Yberra 888-496-4626

Prudential Leasing (broker) William Ross 972-392-3008

AMEX Equipment Dick Steensland 623-872-3468

Premier Truck Center Chris Mehaffie 800-671-6882

Atlas Trucks Gordon Chou 877-860-6757

S.E. Truck Sales Peter O'Donnell 877-295-3748

M&K Quality Truck Sales, Inc. Ron Meyering 800-510-8727

I-10 International Trucks Gayle Austin 877-954-9241 returned

half of $26,000 up front money

Tulsa Freightliner Dan Clark 800-725-5312

According to the Department of Corporation, there are another two

dozen deals from dealers on one street that were not funded, money

not returned, and they have an on going investigation and hearing

to be held on the allegations.

At this time, Gary Psaledas of Western Equipment Financing goes

on line via listserve of the National Association of Equipment Leasing

Brokers to warn other members about the Funding Tree and the

experience he is having. Other brokers have similar problems

with the Funding Tree.

He then contacts the California Department of Corporations.

“I received a phone call from John Noonan, CA Dept. of Corps., Investigations

division, 916-322-6067. He asked a lot of questions regarding the Tree. He

also told me that Bernal had 9 Felony counts in 97 of which she pled to two. I

will be talking with him again today. This may be a good source for you to

send the ex-employees and the other brokers.”

Leasing News confirms this information with the Department of Corporations

and the District Attorney, who confirmed what we were told. One of the

requirements was “ Mrs. Bernal not to handle money of others.” The Funding Tree nor Kendra Bernal is not a licensed in the State of California, although she

originally told Leasing News the company was licensed.

Ex-employees, including the ex-sales manager tell us about high lease factors, advance rentals and 15% deposit collected on many hard credit “owner-operator” leases, but commissions not paid, and they suspect the leases were not funded. They state the Funding Tree was also collecting monthly rentals from lessees, although the vendors had not been paid. Reportedly “commission only”

sales people come and go.

Kendra Bernal states this is a misunderstanding and she will have a statement

soon.

In the meantime, the Funding Tree and Integrity Group merges. She tells

us they have money and will be funding leases, as part of the agreement

to merge, plus they are seeking new “investor money.” Please wait, she

asks, as this will all be straightened out.

From: Dave Muilenburg <dave_muilenburg@yahoo.com>

Subject: Re: Funding Tree Inc. Confidential

Date: Wed, 13 Mar 2002 11:11:23 -0800 (PST)

“I appreciate your prompt response and would like to file a complaint. I don't

know what information you need but the following should suffice. Lessee - Gilbert Lechuga dba G.L. Concrete Pumping. Approved January 31, 2002. Amount approved $50,020.00. Down payment $7898.00 (which they cashed).

We requested the advance back verbally and they are insisting of it in

writing which we are doing. Let men know if you need any more information. Thanks, Dave”

Leasing News does not know the true status of this transaction at this date.

Yes,. this was confidential, at first, then given permission to quote and try

and obtain the advance rentals “or approvals” back. This went back

and forth trying for resolution. In the meantime, Gary Psaledas is counter sued and upon the advice of his attorney, will make no more statements.

Kendra Bernal states she is returning all the advance rentals from deals not funded, just as Commercial Money Center did, and to please give her some time to accomplish this. Several more weeks go by. Perhaps another month.

“Here is some info I know about them. I am just a

small time broker that previously worked for

*******. I moved from California to

***** and was offered a position with the Funding

Tree, as I had a lot of contacts in the "D" and "F"

credit arena.

“They were trying to pick up where CMC

left off, but I can tell you, they were the most

unprofessional group of people I have ever worked

with. They have been collecting hefty advance rentals

since August of last year and as far as I know have

not funded a single transaction. It only took me a

short time to figure out they were not going to come

through on any of their promises. I was told it could

be 30 days for funding

“. I know I personally booked about 125K in transactions

before I figured out that none of them were to going to fund.

Not a huge amount,(3K in commission)that I will never see, but I

felt truly bad for the lessees I helped to convince

the 15% advance would secure the equipment they so

badly needed.

“ I think they are painting a picture to gullible brokers like me,

using their contacts to get deals, and then dumping them after

they have generated several deals for them. I realize my problems are

minimal but maybe you can forewarn others of the

situation.”

( name withheld)

Joe Rodriquez of Integrity Group calls to say please hold off on the story

as he is trying to legally end this merger. He states he has not made any money.

Any of the advance rentals and deposits have stayed with the Funding Tree.

He is a broker. Kendra Bernal promised to bring in investors and lines of credit

to fund transactions as they were going to be the next Commercial Money Center. But it never happened.

He states he has gone through two attorneys in trying to “clean this up.”

More dealers reportedly not paid:

Courtesy Chevrolet (AZ) 602-279-3232 Sam Garber

American Machinery Exchange (AZ) 623-872-3468 Richard Steensland

Rush Truck Centers of AZ 602-272-7611 Roger Tarlton (2 deals)

Rowe Bros. (OR) 503-228-5558 Hal

Western Empire Truck Sales (NY) 716-538-2200 Not sure who to talk to there.

Leasing News asked again to learn what was happening, particularly regarding the Department of Corporation restraining order. Kendra Bernal replied:

“Sorry it took a while to get back with you today.

We did receive a cease and refrain order prohibiting us from doing "consumer lending without a license" This does not impact our leasing

business. We have made some modifications to our lease documentation, etc. to ensure that nothing we are doing can be considered

"consumer lending". We are working with legal counsel on this matter and feel that we are in complete compliance.

“As to the transaction of GL Concrete transaction:

“We received the transaction in on 03/05/02. The transaction is still missing several items (Copy of drivers license, copy of full phone bill, some

bank statements, Vendor Profile, Personal Financial Statement, Indemnity Agreement, Certificate of Insurance, Original Invoice is incorrect) as

you can see this is more than a couple of items. The broker that sent the transaction to us (A-1 Financial) was notified of the missing items on

03/06/02 and again on 03/11/02 and yet again on 03/13/02. We spoke with Clair this morning and he said that he did not receive the missing

item list on 03/11/02, so we re-faxed the list to him today. We cannot fund a transaction that is incomplete.

“I do not know who Dave Muilenburg is. As far as we know the only additional broker is Anear Financial and Melinda is the only contact that has been forwarding

information to Clair and TFT. We did receive a call from an irate CPA this morning by the name of Yvonne who wanted to cancel the

transaction. This is obviously not the lessee. We require that all cancellation requests be put in writing. Unlike most leasing companies we

do allow lessees to cancel transactions and we do issue refunds, minus our doc fee of $395.00. “

If you need to speak with me, give me a call at the office (909) 369-3150

Kendra Bernal

President

During this time brokers on the National Association of Equipment Leasing

listserve were being solicited to send business to the Funding Tree. We have

several faxes, along with the broker agreements and other terms.

One of the claims is that the Funding Tree has been in business for over

five years.

The main pitch: “ We specialize in A to D credit transactions. Referring to our guidelines, you will find that we are unconventionally liberal in our credit decision criteria.”

During this time, the Funding Tree had the Department of Corporations hearing

postponed. I think there were two postponements, but the main hearing is now

June 4.

STATE OF CALIFORNIA

BUSINESS, TRANSPORTATION AND HOUSING AGENCY

DEPARTMENT OF CORPORATIONS

TO: KENDRA BEERNAL

The Funding Tree, Inc.

The Integrity Group

Integrity Funding

P.O. Box 1016

Mira Loma, CA 91752

6141 Riverside Avenue, #1

Riverside, CA 92506

10263 50th Street

Mira Loma, CA 91752

DESIST AND REFRAIN ORDER

The California Corporations Commissioner (“Commissioner”) finds that:

1. At all relevant times, Kendra Bernal is mad has been the president of The Funding Tree. toe. (“The Funding Tree”), a California corporation. She is also associated with the entities The Integrity Group and Integrity Funding.

2.Beginning in or about July of 2001, Kendra Bernal and The Funding Tree held themselves out as being engaged in the business o making consumer and/or commercial loans,

3.In multiple transactions involving consumers in multiple states, including Illinois, Florida, and Texas, Kendra Bernal and The Funding Tree represented to consumers that they would provide the consumers funding for purchases of commercial vehicles. In reliance upon those representations by Kendra Bernal and The Funding Tree, multiple consumers entered into contacts with dealers for the purch2se of, and took possession of, commercial vehicles.

4.Kendra Bernal and The Funding Tree also entered into agreements -with consumers whereby Kendra Bernal and The Funding Tree promised that they would fund loans to the consumers. The consumers provided valuable consideration to Kendra Bernal and The Funding Tree in exchange for those promises.

The agreements to make the loans were entered into in the State of California, but the Commissioner has not issued a license pursuant to financial Code section 22100 authorizing Kendra Denial or The Funding Tree to engage in the business of a finance lender or broker.

Accordingly, the Commissioner is of the opinion that Kendra Bernal and The Funding Tree have been and are engaged in business as finance lenders or brokers without a license from the Commissioner in violation of the California Finance Lenders Law, Financial Code section 22000 et seq. (“CFLL’), and therefore orders them to desist and refrain from such activities and from further violations of this division, whether a thing individually, jointly, or under other names or through other entities. This Order is issued pursuant to CPU section 22712 on the ground that it is necessary, in the public interest, for the protection of consumers and consistent with the purposes, policies and provisions of the CFLL.

Dated: January __, 2002

Sacramento, California

DEMETRIOS A. BOURTRJS

California Corporations Commissioner

By VIRGINIA JO DUNLAP

Acting Supervising Counsel

Enforcement and Legal Services

Kendra Bernal told Leasing News her attorney advised her that she was not

doing consumer loans, although the company was running consumer credit on each application, and that it was NOT necessary to have a California Finance Lenders License.

In California, all the major banks and finance companies require discounters

to have such a license, and it is part of their application process to do business with them.

From a United Association of Equipment Leasing Legal Workshop Conference:

“The point was that if the transaction was ruled a loan, not a lease

as you had intended, you could be subject to laws of usury in

California.

“The lease then could be considered usurious and you would lose, even

if in default.

“All your salesmen must either have this license or work as your

employee ( you cannot have a free lance salesmen unless he has a

license ). Bank of theWest and others used not to do business without evidence of the license.

“Some of these licenses are needed in other states.”

Kendra Bernal states she does not need the license to operate, attract an

investor or obtain a line of credit, and has hired an attorney to represent

her at the June 4 Department of Corporation hearing.

Leasing News asked her for a statement, and she sent this PDF file, three pages, which we recommend you read in its entirety:

http://www.leasingnews.org/PDFFiles/TFT_LN_COMMENT.pdf

2003---

The Funding Tree—Laughlin, Nevada

Looks like the Funding Tree is still not returning “Advance Rentals.”

For readers not aware of this “Bulletin Board Complaint” or story,

please go here:

Henry’s Automotive of Hanford, California sent in a cashier’s check for $3,893.37

along with a signed lease for a Smog machine. The person they were in contact “...was named ‘Sandy’, with Network Capital. We sent a cashier’s check in the amount of $3,893.37 dated June 14,2002, and it was cashed on June 18,2002 ( they faxed Leasing News a copy of the check.”

The vendor has not been paid and “...they either wanted their smog machine back or they wanted to be paid in full. Now we cannot reach Sandy.

From a highly reliable source, we understand the attorney who represented Kendra Bernal, the former president of the California corporation, who was arrested for

violating parole, is now suing his client as he has not been paid. The court instructed him to represent her as she allegedly did not have any money to pay for her defense.

At press time, we did not have permission to use the sender’s name, but the e-mail

is timely in view of the latest incident:

I read with interest your various articles on The Funding Tree, Inc. and its principal Kendra Bernal. Kendra Bernal and her associate Bruce Peterik are alive and well in Laughlin, NV under the name Legacy Leasing. Their offices are down the hill from my home, and from these offices at 3650 South Pointe Circle, Suite 201F Laughlin, NV 89029 (702) 299-1234. It is strictly a boiler room with telemarketers who blow in and

out with great frequency.

I met with Ms. Bernal and her EVP Bruce Peterik early this year, when they

were recruiting for sales people. I introduced myself as a credit person who

would like to talk to them once they completely relocated to NV. Mr. Peterik

said that they were vacating CA because of its regulatory environment. Ms.

Bernal would stay in CA to run her other business, a judgment collection

service. Mr. Perterik would not be relocating to NV either, he had the job

of finding strategic funding partners.

I checked out Legacy's Clark county, NV business license on line and found

that the corporate name is The Funding Tree, Inc., the license date

10/15/02,the Category Description is "Equipment Rental", and "ownership

information is temporarily unavailable. Please call (702) 455-3573" I

called that number at Clark County, and was told by a Carol that

"Hopefully, by spring of next year, the information will be available".

“Are you saying that both Kendra Bernal and Peterik are in Nevada? You

state he was not moving there, but is there now, but Kendra is not ( she

was arrested and her attorney is reportedly now suing her for not paying his fees.)

May I quote you or is this name with held?”

Kit Menkin

“You may use the my name. Bruce comes over a number of times a month. All

deals are faxed to the CA office. met Kendra and her mother in the NV

office. She was looking to buy or lease a home here in Laughlin. That was 7

or 8 months ago.”

Name = David G. Brownlee, E.A.

Address = 3201 Partridge Run Street

City = Laughlin

State = NV

Zipcode = 89029

Phone = (702)298-2584

Fax = (702) 298-2584

Email = batarista@laughlin.net

Comments = I read with interest your various articles on The

Funding Tree, Inc. and its principal Kendra Bernal. Kendra Bernal and her

associate Bruce Peterik are alive and well in Laughlin, NV under the name

Legacy Leasing. Their offices are down the hill from my home, and from these

offices at 3650 South Pointe Circle, Suite 201F Laughlin, NV 89029 (702)

299-1234. It is strictly a boiler room with telemarketers who blow in and

out with great frequency.

I met with Ms. Bernal and her EVP Bruce Peterik early this year, when they

were recruiting for sales people. I introduced myself as a credit person who

would like to talk to them once they completely relocated to NV. Mr. Peterik

said that they were vacating CA because of its regulatory environment. Ms.

Bernal would stay in CA to run her other business, a judgment collection

service. Mr. Perterik would not be relocating to NV either, he had the job

of finding strategic funding partners.

I checked out Legacy's Clark county, NV business license on line and found

that the corporate name is The Funding Tree, Inc., the license date

10/15/02,the Category Description is "Equipment Rental", and "ownership

information is temporarily unavailable. Please call (702) 455-3573" I

called that number at Clark County, and was told by a Carol that

"Hopefully, by spring of next year, the information will be available".

Up-Date Aug 20, 2002

It appears Kendra Bernal, who was served with a cease and desist order from the Department of Corporations will not be appealing the order, and the public hearing

has been cancelled, a very highly reliable source told Leasing News. It is alleged she has enough difficulties with violation of parole to not pursue this.

There was an affiliation with Integrity Group, which the Department of Corporation was involved, but at this time, there does not look like there

will be a hearing on this matter, as Kendra Bernal was part of this group

at one time, and allegedly is out of the equipment leasing business, according

to our highly reliable source..

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