While the official personal bankruptcy of Sheldon Player has not been found, First Premier Capital, Edina, Minnesota, according to court documents, consisted of Steve Alpeter, Bill Kelly, both of Minnesota, and Denny Sanford, South Dakota, filed a complaint for $30,365,558.29 against the accountants of both Equipment Acquisition Resources and Sheldon Player, as an individual. The accountants are VonLehman, an Ohio corporation located in Cincinnati.
The complaint calls for a jury trial with the nature of the suit: 370 Fraud or Truth-in-Lending.
The exhibits and the complaint are very revealing as they also include the vendor and other parties in what they call a "fraud" lead by audited financial statements by VonLehman & Company. First the synopsis of the nine page complaint filed in the Southern District of Ohio by Debra Devassy Babu of Askounis & Darcy, Chicago, Illinois.
"13. Through the course of these conversations and emails, Malthouse and Powers at VonLehman were made aware that FPC intended to rely on EAR's 2005 audited balance sheet, EAR's 2006-2008 audited financial statements and Player's and Malone's 2007 and 2009 audited balance sheets and other accounting-related documents, all prepared by VonLehman, in deciding whether to do business with EAR.
14. Based on FPC's review of EAR's 2005 audited balance sheet, EAR's 2006-2008 audited financial statements and Player's and Malone's 2007 and 2009 audited balance sheets and other accounting-related documents prepared by VonLehman and in reliance of the same, FPC funded the Leases with EAR.
15. On October 29, 2009, EAR filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois as Case No. 09-39937.
16. During the course of EAR's bankruptcy, FPC and other creditors discovered that EAR engaged in fraudulent activities, including, without limitation, double-pledging and overvaluing of collateral, and fraudulently transferring EAR's assets by EAR's officers and shareholders. EAR, Malone, Player, Mark Anstett ("Anstett"), Machine Tools Direct, Inc. ("Machine Tools") and George Ferguson ("Ferguson") (collectively, the "Perpetrators") engaged in a Ponzi scheme to defraud EAR's creditors. Under the scheme, Machine Tools and Ferguson sent fabricated invoices for equipment to FPC and other equipment finance companies, when the equipment was (a) never manufactured; (b) pledged more than once to a particular lender/lessor; (c) never supplied by Machine Tools to EAR; and/or (d) identified by fake serial numbers created by the Perpetrators to deceive lenders.
17. Machine Tools and Ferguson sent fabricated invoices for equipment to FPC and other equipment finance companies, though they never intended to supply any equipment for
EAR when they issued the invoices, to defraud FPC and other equipment finance companies. Machine Tools and Ferguson also pretended to supply and deliver equipment to EAR in order to defraud FPC and other equipment finance companies.
18. EAR, through Player's, Malone's and Anstett's direction and control, falsely represented in writing that the equipment was delivered and falsely represented that the equipment leases were bona fide transactions.
19. Just before filing for bankruptcy protection, EAR retained William Brandt of Development Specialists, Inc. as its Chief Restructuring Officer to replace the Debtor's existing management. Based on his investigation of EAR's operations and financials, Brandt concluded that EAR ran a Ponzi scheme, costing creditors approximately $150 million. Brandt has also represented that the FBI and the U.S. Attorney's Office are investigating the matter.
20. VonLehman, Malthouse and Powers, in preparing EAR's 2005 audited balance sheet, EAR's 2006-2008 audited financial statements and Player's and Malone's 2007 and 2009 audited balance sheets and other accounting-related documents, had a duty to conduct audits which would detect any material accounting misstatements, misrepresentations, irregularities and fraud.
21. VonLehman, Malthouse and Powers had a duty to perform audits of EAR's 2005 audited balance sheet, EAR's 2006-2008 audited financial statements and Player's and Malone's 2007 and 2009 audited balance sheets and other accounting-related documents in accordance with applicable auditing standards, accounting principals and all applicable professional and regulatory standards, including generally accepted auditing standards."
In the Exhibits, the 2007 audited EAR financial statements shows $15,957,268 in cash along with capital leases of $71,399,441 with a net worth of $57,555, 563.
The June, 2009 audited personal financial statement of Sheldon Player and Donna Malone shows assets of $110,353,880 (with the EAR net worth included) with $16,720,695 in liabilities and net worth of $93,633,025 with a note that after taxes it would be a net worth of $73,901,937.
In the exhibits are the lease contracts from Premier Finance Capital to E.A.R. and the 4/16/05 is signed by Sheldon Player as president and the 9-16-8 is also signed as Sheldon Player as president. It appears after the Leasing News interview, his status became consultant.
A response from VonLehman denied many of the charges, but with no information.
May 23, a third party complaint is recorded against Sheldon Player, Donna Malone, Robert Landford, Cody Dolan, Cory Doran, Kyle Bennett, Machine Tools Direct, Inc. George Ferguson, Gonia Consulting, LLC, Joel Gonia, filed by Brian Malthouse, VonLehman & Company.
A Meeting Report deadline is due by 6/30/2011
Premier Complaint Form
First Premier Complaint
4-16-05 Lease Agreement
2007 EAR Financial Statement
June, 2009 PFS Player & Malone Financial Statement
Defendants Response: First Premier Capital