Lessee Rights Daily Almanac

May 17th, 2005

We made history. May 16th was the first ever protest against the Equipment Leasing Industry.

The action started at 7:30 a.m. Rebkah Howard and her assistant were in front of the hotel with a stack full of large foam-core posters. Kevin Martin, NVAC Coordinator, soon arrived with Ron (Chief) Spadafora and I who had both flown in from NYC. We all had stayed up very late the night before–not to drink at the South Beach bars but to print copies of flyers at a South Beach Kinkos.

By 8 a.m. more Norvergence victims arrived in front of the Loweâ€™s Hotel and everyone began either holding up signs or passing out flyers to passer-bys. The flyers included the text from a letter written by the Director of the Epilepsy Foundation in Florida (Click here to read letter). The Protesters all looked great outfitted in Kevin Martin Norvergence/Leasing Company Protest T-Shirts. Cars and trucks often honked in encouragement. Spectators frequently stopped to ask questions as they were walking past the front of the hotel through our gauntlet of protest signs lined up along the sidewalk and the curb.

Tim Chapman, a pastor from Texas (whose church represents 60 other churches) is a Norvergence victim and Steve Jaffe, an attorney for some Florida victims (and who also works with Class Action Attorney Michael Green) were both interviewed on the street by NBC Channel 6 in Miami.

The Spanish television station Channel 24 cameraman next appeared. After video taping protesters holding signs and chanting (â€œELA, we wonâ€™t payâ€ and â€œWhat do we want?, Justice, When do we want it? Nowâ€), the cameraman asked to interview someone in Spanish. Luckily our PR person, Rebkah had a young assistant who spoke Spanish. She gave the interview after we instructed her what to say. (Now thatâ€™s a full service PR firm; translator is included).

By 1:00 pm the protest was over. Scott Colton, one of the Norvergence victims in attendance had to leave early, but generously paid for everyone to have lunch at Jerry’s deli near the hotel.

During the week before the Protest and the day of the Protest itself, the PR company called/faxed and e-mailed all the media outlets in town so they all will surly be familiar with the Norvergence/Leasing Company Scam in the future. Rebkah hopes at least one print outlet will do a follow-up Norvergence story.

Best thing of all however, was that I spoke to someone at the SEC Enforcement today, Tuesday the 17th who not only was reading comments on our Petition but mentioned that they were aware of the Miami protest.

Thanks to everyone who attended. All posters, T-Shirts and flyers from the Miami Protest will be shipped for the upcoming Protest in New Jersey.

See you in New Jersey!

P.S. The Leasing guys going in and out of the hotel did not seem pleased to see us. In fact, they seemed downright annoyed. Only one ELA member stopped by to speak with us. He said he only worked with leasing for government agencies and therefore had nothing to do with the Norvergence fraud. In addition, hotel security was friendly and professional towards our group.

Posted in Year 2005 | 42 Comments »

May 13th, 2005

Home

Robert Potter recently posted on the discussion board that he noticed a “Robert Fine” had signed the LRA petition. Rightfully he noted that this could signal a potential problem. Read Mr. Potter’s Post on the LRA Bulletin Board. After all “Robert Fine,” is the Robert Fine that many who follow the Norvergence scandal know as one of the masterminds of the Norvergence Frauds in his capacity as a Norvergence Executive who was at the same time, President of the Eastern Equipment Leasing Assn. Fine used his status in the leasing industry to sell Norveregence as a vendor to 46 leasing companies, who then signed “Master Lease Partnership Agreements” with Norveregnce well before any lessee was recruited. Mr. Potter correctly asks us, “Is this a joke or legitimate?”

“Hummm, was this a prank?” I asked myself. The first thing I did was ask our programmer to look at “Robert Fine’s” entry to see it looked like a real email and address. When this checked out ( I must admit I was surprised it did), I asked Eli Varenberg, head of research here at ASRL to follow-up and try to use this address to contact “Mr. Fine” and ask whither or not; 1. he was the Robert Fine who worked at Norvergence; and 2. if he was, did he or someone else enter his name on the petition?

It turns out that THIS Robert Fine is not the former Norvergence Executive, but is, in fact, a Norvergence Victim who is suing his leasing company. He just happens to share the same name. Eli reports he was shocked to learn that he shared the same name with the Norvergence Scheme Master Planner and crook.

Eli Varenberg makes his comments on the Discussion Board

This is one mystery involved in this case that we could quickly solve. Now on to assisting the Feds in order to put these Norvergence and Leasing Company criminals behind bars and our obtaining Restitution for the 11,000 victims.

Posted in Year 2005 | 9 Comments »

May 6th, 2005

Home

When Kit Menkin received a complaint from Steve Lopes in late 2003, Steve was one of the first to write to Kit Menkin about Norvergence. He discovered fraud. Lopes’ so-called Norvergence deal for phone service turned out to be a $35,000 “equipment lease” ($590.00 X 60 months of payments) for equipment (the Martix SOHO) worth only $200. Kit promised Steve he would ask Norvergence about his complaints. Kit wrote to Robert Fine, a Norvergence Executive (who was also, at the same time, President of the Eastern Equipment Assn).

Fair enough. This series of email exchanges found in the bankruptcy records (by the sharp eyed Eli Varenberg here at ASRL) between Steve Lopes and Menkin does not tell the whole story. However, the email between Norvergence Robert Fine and his colleagues Edward Lucas and Bob Wiseman paints the picture of what was really happening behind the scenes.

When Kit contacted Fine about Steve Lopes and his complaints, Fine had already received a bushel basket full of complaints from Lopes himself . Lopes was full of fight and was demanding to be released from his contract. Now, Fine saw, through receipt of Kit’s email, that Lopes was expanding his battlefront and was trying to get his case published in Leasing News by involving Kit.

No doubt Fine concluded then that Lopes could be a real problem with more headaches on the way, in the form of more complaints to Kit from more Norvergence customers. Norvergence had already filed suit for libel against one employee who talked publicly about Norvergence’s fraudulent scheme in a chat room (more on him another time) and had offered the $500 bounty to quell other complaining employees. “What now?” Fine undoubtedly thought, ” How can we stop customer complaints in Leasing News in their tracks, just like we did with employees?”

No stranger to using (misusing) his power in the form of money and clever schemes with brilliant twists. As the following email below from Fine to his Norvergence colleagues portrays, Fine, in concert with Kit, hatched the equivalent to a “poison pill.” From now on, Kit suddenly declared (without ever having reported what Lopes had said), all Norvergence customers who would ask for him to investigate and report on their complaints against Norvergence would have to sign a CONTRACT before Kit would lift a finger.

This contract would oblige Norvergence victims, excuse me, customers to pay 10% to a “charity” of any settlement monies that would result from his investigation and reporting on their complaint. The “charity” of Kit’s choice was not the Red Cross or Salvation Army. Kit determined that the “Equipment Leasing Foundation” that supposedly does independent research for the sole benefit of, yes, that’s right, leasing companies, would be the recipient of his benevolence. (The ELFF does market analysis reports, advises the leasing industry on current legal issues, creates tables of sales figures in various industry sectors, etc–Kit called this a “charity”).

Kit, with no sense of its unfairness to lessees, praises this scheme as acting out his interest in improving the “culture and ethics of the leasing industry.” Kit “challenges readers” to do what he is doing. And as Kit states it , he called for readers to put their “money where their mouth is.”

His wording sounded as if he clearly had taken the high moral ground–that’s the diabolical part. This plan would require victims of Norvergence’s fraud, if a fraud was exposed by Kit and a settlement reached, to pay 10% of the settlement BACK to leasing companies for their benefit. This would also be of benefit to Norvergence and Robert Fine, for even if fraud was found, confidentiality would be imposed and all anyone in the leasing industry would know is that donations were coming in to ELFF. After all, Robert Fine WAS also President of the Eastern Equipment Leasing Assn. which is tied to the ELFF.

The most brilliant part of the plan, however, was that no matter how high minded this scheme sounded, it would clearly function as a very effective deterrent. What lessee victim would EVER sign a contract that commits them to paying 10% of , what would be their money, that was wrongfully taken from them? And worse yet, this deal gives 10% back to their victimizers.

With all due respect to Kit, he is not smart enough to have hatched this scheme. The timing of when it was launched puts it completely in Fine’s court. It was a evil but brilliant way to: A. shut Kit up, where he does not air Norvergence dirty laundry; and B. shut Norvergence customers up like Lopes–all without spending a dime.

I am not so sure that the $5000 that Kit suddenly and boldly was giving ELFF at the same time of the scheme’s announcement is not from Norvergence and Fine. Like the lawsuit against the Norvergence whistle blower and the $500 per head bounty, Fine and Norvergence were accustomed to using money to strong-arm their way out of problems.

Here is Kit’s announcement of the scheme and here is the email exchanges between Lopes and Kit as well as the very revealing statement from Fine to his Novergence colleagues where he gloats:,

$Robert\$

I recently called Steve Lopes. I asked Lopes if he was aware of this 10% settlement deal Kit offered. He said “no.” I also asked him, ” What was Kit’s final word about your email complaints after he wrote to you that he would speak to Norvergence in your behalf ? ” Lopes said, “he basically told me, ‘go pound sand buddy, you’re screwed. You signed the contract. You’re obligated to pay. ‘ ”

However, his bold and brave fight with Norveregnce resulted in his eventual release from his Norvergence and leasing company contract before the Norvergence bankruptcy–despite the stonewalling of Kit. Happily, Lopes refused to believe what Kit told him–a lesson many should still learn.

P.S. I repeatly asked for Kit’s clarification or explanation regarding these emails. He has refused to respond.

Posted in Year 2005 | 11 Comments »

May 2nd, 2005

Home

Kit Menkin, publisher of www.LeasingNews.org has served as a trusted advisor to many Norvergence victims over the past year. In part, this was due to Kit having described himself as playing an unbiased and independent role in-between leasing companies and Norvergence victims.

I will be posting a set of emails that maybe quite surprising for those Norvergence victims who listened to Menkins’s opining as neutral. Eli, in the ASRL team, found these emails as he was searching through the Norvergence bankruptcy files. I have written to Menkin twice and phoned him once to give him opportunity to respond or clarify, what appears to be, evidence of Kit’s conspiring with Norvergence’s Robert Fine to launch a plan that would effectively thwart Norvegence customer complaints.

Some of you may recall that Norvergence aggressive tactics to fend off all critics included a law suit against one former employee (a pathetic and desperate ploy in retrospect) and a $500 dollar a head bounty to be paid to any Norvergence employees who ratted on any other employees who were speaking out with, what we now know as the truth about Norvergence and their scam. Apparently there was one more aggressive action that Norvergence scam-artists launched with, what appears to be, Kit Menkins full cooperation.

I am still waiting for Kit’s response, but will not wait much longer. Stay tuned.

Posted in Year 2005 | 22 Comments »

April 29th, 2005

Home

Who ever heard of taxing– a tax –since the Boston Tea Party in the 18th century? Click on image to see the whole invoice. Most states require a personal property tax to be paid Dolphin told me they collect taxes on the property tax from lessees, in addition to the tax itself . Patty Sullivan, a Dolphin representative said Floridia requires them to consider the reimbursement of property taxes by lessees to Dolphin Leasing to be income to Dolphin. Therefore, Dolphin also requires lessees to pay that tax too.

The problem with the Norvergence leases is the fraudulent valuations of the leased equipment cheated lessees out of thousands of dollars. Leasing Companies charged lessees for an annual property tax that was, in almost every case, MORE THAN THE TOTAL VALUE OF EQUIPMENT! Take the invoice below. The $219.79 total of property tax and the tax on that tax, was more than the Matrix SOHO’s cost, at $200.

Everyone should follow Norvergence victim, Rich Bentley’s lead. He has demanded his money back from his Leasing Company. (His and Bill Fry’s saga I will detail next week).

As a Norvergence Victim’s Action Committee project, we call on all Norvergence lessees who were charged a property tax by their Leasing Company to send them a demand letter for a refund of the property tax paid beyond the actual value of the equipment. The letter should states the amount of tax paid and a printed copy of the official appraisal that is included in my report “The Role Of Leasing Companies in the Norvergence Fraud” The letter should underscore your demand for an immediate refund of any and all fraudulently collected taxes.

There are no excuses. All Leasing Companies know by now the true value of the equipment. And yet Leasing Companies have not contacted lessees to right this wrong. Why didn’t the Attorney Generals require refunds of fraudulently collected taxes and insurance premiums within their settlements with Leasing Companies? Left to profit from this fraud Leasing Companies are left unpunished and encouraged to do it again. Lessees are left unfairly exploited.

NVAC will post a notice for the marshalling of lessees to ask for property tax refunds from Leasing Companies next week.

Posted in Year 2005 | 16 Comments »

April 27th, 2005

Home

I must admit I teared up when Chuck said how much the Norvergence fraud has hurt his mission. He continued, “We are a patient services and direct health care provider here in Orlando.” He went on to explain that the $25,920 bogus Norvergence equipment lease with IFC was suppose to help them save money in phone services.

Saving money for the Epilepsy Foundation translates into services for disadvantaged children and adults suffering with epilepsy. The added burden of having to fight a lawsuit and spending $11,000 (and counting) in attorneys fees, in addition to IFC holding them as debters for 5 years of unrendered phone service, has been a real strain. (While he was talking I had to wonder what sacrifice $11,000 missing from the budget means to each of the children with epilepsy who are clients of the Foundation in Orlando. One less therapy session per child? Less social workers’ time to help parents understand treatment options –surgery or medication–for a serverely afflicted child? It’s painful to think about.)

Chuck’s group also has produced a video on “shaken baby syndrome” to help prevent the occurrence of epilepsy by educating parents.

Chuck says he has been papered to death with subpoenas that choke his time with requests for papers from leasing companies. He feels the only purpose is to “harass me and my group in any way leasing company lawyers can.” In the beginning, he sent letters to IFC explaining that they were a small not-for-profit and that every dollar meant a lot to helping those whose lives are afflicted with epilepsy.

No mercy. IFC wants money from the Epilepsy Foundation for phone services that they illegally booked as equipment. IFC has no shame.

I will post the pleading letter Chuck sent IFC right here as soon as I receive it. Meantime, check out their web sites: www.EpilepsyAssociation.com and www.AboutShakenBaby.com

Two letters from EACF to Rudolph Trebles:
July 8, 2004, Sept 2, 2004

Posted in Year 2005 | 9 Comments »

April 26th, 2005

Home

Among the frauds I have not yet pursued are the fees and taxes that telecom service providers must collect and pay in behalf of their clients and also pay themselves. 200 million dollars in equipment leases were, in fact, 200 million dollars in telecom phone and data services for small businesses paid by leasing companies 5 years in advance of actual delivery. The bank conveyence of an “equipment lease” created a mechanism for evading various data, service and cable taxes and fees due to States and Federal Government.

I am now seeking expert advise in this complex area in order to determine the type and amounts of data, phone and cable fees and taxes that were evaded by Norvergence and their lending partners, the Leasing Companies.

Sarabeth Sealock has been a great help to Norvergence victims. Just today she sent out an email notice–see email below– to her colleagues in the telecommunications service field to help us find an expert who could write an authoritative report. We can then turn over this report to SEC, IRS and US Atorney Criminal Investigators, who are presently looking at the Leasing Companies’ role in the Norvergence fraud.

From: “Sarabeth Sealock DC-98″
To: “Multiple Recipients of Telecom Talk”
Cc:

ALERT….This IS a solicitation for experts/vendors with telecom tax knowledge.

Many of you are familiar with the NorVergence scandal and Rhonda Roland Shearer has taken up the noble cause of exposing all aspects of the involved fraud. Vendors with expertise in telecom tax laws on the state & federal level, please read her message & see if you can assist her with her request.

If you are interested, please contact Rhonda directly per her information below.

Here is a website that documents her accomplishments on the issue to date. It’s an eye opener for those of us who have to dodge fraud and cut costs on a daily basis.
http://www.lesseerights.org/

—–Original Message—–
From: Rhonda Roland Shearer [mailto:rrs@asrlab.org]
Sent: Sunday, April 24, 2005 8:21 AM
To: Sarabeth Sealock DC-98
Subject: Norvergence case: Need Expert that could write up a short report …

Hi Sarabeth,
I am looking for an expert in phone, data and cable tax (specifically the collections and payments due to State and Federal authorities by service providers). I need a short but authoritative analysis that explains the exact taxes that were evaded by Norvergence and their partners, leasing companies, when services were fraudulently sold and paid for as “equipment.” My understanding is that the leasing companies should have collected and paid taxes in behalf of customers, and they should have paid certain other taxes in behalf of themselves.
Many thanks for any advice.
Best regards,
Rhonda
Rhonda Roland Shearer
Director, Art Science Research Laboratory
62 Greene Street
New York, New York 10012
phone 212-925-8812
fax 212-925-0459
http://www.asrlab.org

Posted in Year 2005 | 20 Comments »

April 26th, 2005

Home

Click on note detail below to see full two pages of Salzano’s handwritten documents. Big white-collar criminal cases, such as the recent AIG Insurance fraud conviction, often begin with the discovery of such notes, which can determine what someone knew and when they knew it. The handwritten statement, citing 3 individual points, included “2. Asset Valuation considered wrong at Wells.” Point 3. indicated Salzano believed he needed to contrive a plan in case Wells Fargo Bank balked further–enough to turn and run–at the deal’s inclusion of a false asset valuation.

Posted in Year 2005 | 10 Comments »

April 25th, 2005

Home

Leasing Company insiders consistently point out that Norvergence sold leases to lessees and that they were the third parties assigned the leases. The story they tell regarding the Norvergence debacle focuses solely on what lessees did or did not do, or what those 11,000 leases contained. What never seems to be mentioned is the the “Master Lease” deal structure that leasing companies used to foment its contractual “program partnership” with Norvergence long before any lessee signed a Norvergence lease.

One recent example illustrating my point that Leasing Companies try to keep everyone’s attention only on the lessees’ contracts with Norvergence, instead of their own earlier signed Norvergence/Leasing Company agreements, is Barbara M. Goodstein’s recent article in the April 2005 edition of the LJN’s “Equipment Leasing Newsletter,” who writes about the Norvergence case in a piece titled, “Come ‘Hell or High Water’ Norvergence Causing a Stir over Documentation.” (See the link that fellow NVAC member, Rich Bentley posted on the LRA General Bulletin Board, http://www.llgm.com/article.asp?article=1030). There is no mention of Leasing Company Master Lease contracts.

In her last paragraph, Goodstein carefully frames the gentlest possible Leasing Company rebuke into a rhetorical statement that allows the complete escape of any Leasing Company accountability and even furnishes them with readymade excuses. Goodstein writes, “Of course, hindsight is always 20/20 and there are practical limitations to due diligence, but background checks against the principals of a company can be revealing.” Revealing indeed.

The papers between Tom Salzanno and Capital Partners (during mid-2001) illustrate that this Leasing Company was well aware of Tom Salzano’s dark past and the disturbing fact that Tom and his brother were risking hardly any money of their own (”$20,000 per month”). The statements from Tom regarding his “litigation history” included real doozies. Tom writes, ” The banks and various finance companies have already prosecuted numerous judgments against me. My wife has already filed her bankruptcy and been (sic) successfully discharged. I am about to file mine in the next few months if negotiations continue to be stalemated.”

Naturally, Salzano paints himself merely as a victim of circumstance. Documents prove Leasing Companies had no trouble doing due diligence on the Salzanos. It was easy. They knew or could have easily known all of the Salzano dirty laundry right from Salzano brothers themselves.

The Master Lease agreements between Leasing Companies and Norvergence spelled out the due diligence that Leasing Companies would do on Norvergence and the documents they required. Now with discovery, we are also seeing all the contracts and the correspondence between Leasing Companies and Norvergence principals. Material evidence consistently shows that Leasing Companies drafted and controlled the terms within their Master Lease contracts with Norvergence. Leasing Companies drafted the contracts, giving them greater responsibility as drafting attorneys for any ambiguity, and often charged a fee to Norvergence to execute their due diligence ($5,000).

These Leasing Company/ Norvergence Contracts are popping up everywhere through discovery–GE, Wells Fargo, CCL, you name it. “United States: Lease Securitization: New Challenges for Issuers,” 15 April 2005, is an article by Peter Humphreys and Howard Mulligan. It mentions the Norvergence case, also discusses in another section, as if unrelated, Master Leases. They explain how a Master Lease “sets out the basic terms of each lease.” (See LRA Bulletin Board. Chris’s Post refers to http://www.mondaq.com/article.asp?articleid=31971&hotopic=1). In other words, any individual lease Norvergence had lessees sign is only a subset of the larger lease between Norvergence and Leasing Companies that sets out the terms. When these Master Leases are read it becomes impossible for any reasonable person to accept that Leasing Companies excuse and contractually described position– that they were simply “arm-length” 3rd parties.

The fact that Norvergence and Leasing Companies had these Master Leases agreements before any lessee signed exposes their attempts to be perceived as only distant and unrelated 3rd parties to be a self-serving sham. Leasing Companies’ status as a 3rd party is only a contractual manipulation and not material fact.

The goal of Norvergence and Leasing Companies for naming Leasing Companies as bogus 3rd parties was a scheme to increase the value of the leases within their Master Lease. Greater powers for collectibility (Come “Hell or High Water”) resulting from a 3rd party, “holder in due course” status are much more valuable than leases where the Leasing Companies are directly related parties or lessors and therefore, responsible for fraud.

Take off the party hats, Leasing Companies, the party is over.

Posted in Year 2005 | 17 Comments »

April 23rd, 2005

Home

Please Email your articles or horror stories regarding leasing/ finance companies to me at rrs@asrlab.org.
I want to publish them. Thanks, Rhonda

Posted in Year 2005 | 22 Comments »

Archives

Categories

Meta