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Christopher Menkin
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Christopher "Kit" Menkin is of editor (, an internet trade publication for the finance/leasing industry. He has 46 years experience in the finance/leasing industry as well as being a founder of a commercial regional bank and serving on several company... More
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  • Name Of Pulaski Bank $7 Million Leasing Fraud: Healthcare Partners Group, LLC 0 comments
    Nov 18, 2013 2:09 PM

    by Christopher Menkin

    Telephone calls, but mostly emails, came in from all over the United States asking what was the name of the leasing company caught in the alleged $7 million fraud with Pulaski Bank, Creve Coeur (St. Louis), Missouri. Guesses that it was King Commercial Finance were not correct, as it would have been a lot more money involved (was told with a laugh by the principal that it wasn't them--- and if he was going to steal, it would be for a lot more money); certainly not CSI, as it definitely would have to be a lot more money involved.

    Leasing News called many leasing companies and banks in the St. Louis, Missouri, area and no one knew the name of the company allegedly involved in the fraud.

    Yes, no one guessed it, and the bank was not disclosing it as the FBI was in the midst of arresting Michael Edward Filmore, 51, Chesterfield, Missouri. He reportedly had at least 15 outstanding loans with Pulaski Bank valued at around $7 million for his company Healthcare Partners Group, LLC.

    The bank appeared to be lax in the transaction: its credit investigation, and the absent audits of leases or the operating statements.

    They felt comfortable with approving the loan it appears due to an alleged fabricated brokerage account records with reportedly $631,000 of the stock pledged as collateral for the loans (most likely not the stock certificates, but a promissory note).

    There was no information on the credit investigation, meaning any loan officer who looked at the tax returns of Healthcare Partners Group, LLC or Michael Edward Filmore, would have seen income or losses or financial statements regarding stock. It is also is common to confirm such information with a call to the stock brokerage firm for verbal confirmation. This may have been done, but to a person posing as the stock broker.

    It also appears there were no leases written by Healthcare Partners Group (not to be confused with the many similar companies such as Healthcare Partners Medical Group). No web site, no listing in BBB, no membership in a leasing association -all red flags that the company was not in the business of equipment leasing. In fact, the company is not listed in the yellow pages for Chesterfield or St. Louis, Missouri for leasing, even health care, or health care equipment.

    These warnings were perhaps why Leasing News received so many emails as to what was the name of the leasing company--no one knew at the time, especially since there are not many leasing companies in St. Louis, Missouri.

    Reportedly Mr. Filmore had been a "customer for years" of the bank. In an affidavit filed in court, FBI Special Agent Peyton Tucker said the bank discovered in early November that Filmore used a fictitious purchase order and other questionable information to secure a loan to buy medical equipment. Why this did not occur in previous requests was not explained.

    Reportedly the outstanding loan balance to Pulaski Bank is $7 million, minus $631,000 in collateral held by the bank. The collateral was not identified. Hopefully it was not a lien on a brokerage account that did not exist.

    It also appears none of the funds was used to buy equipment to lease. Evidently, neither the leases nor the equipment, the reasons for the loans, ever existed. They are not listed as collateral available to the bank.

    So, according to Pulaski Bank's announcement it leaves them to file an insurance claim under its fidelity bond which reportedly has a $5 million maximum limit.

    According to the most recent FDIC filing, the Pulaski Bank was formed in January 1, 1922. As of September 30, 2013, 459 full time employees at 13 offices; net income after taxes of $7.3 million, equity of $131.7 million, and non-current loans of $33.3 million. Before the $7 million loss was discovered in November, charge offs as of September 30, 2013, included $6.3 million in commercial/industrial loans, $2.1 million secured by first liens, 1.7 million 1-4 family residential properties, $1.3 million junior liens, $448,000 nonfarm nonresidential, $56,000 other loans, $42,000 multi-family, $16,000 personal loans; total of $12 million. Tier 1 risk-based capital ratio was 0.127732 (12.8%).

    The bottom line is Healthcare Partners Group, LLC, was never in the leasing business.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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