IFC's Trebels/Langs Sued for Fraud by CoActiv Capital
by Christopher Menkin

CoActiv Capital Partners of Horsham, Pennsylvania on July 9, 2009 filed a suit for over $2 million against IFC Credit Corporation, Morton Grove, Illinois, one of their funding groups, and the two main principals, claiming the officers committed fraud as individuals, specifically not paying off leases when the lessee terminated early, and knowing that the company was "essential insolvent" for almost a year.

This is the first suit filed individually against Rudolph D. Trebels, CLP, CEO of the company, and Marc Langs, CFO of the company. They are named as officers of IFC Credit Corporation as well as managers IFC Capital Funding I, LLC. The complaint filed is over 180 pages with five complete exhibits by lead attorney Frank Murphy of Frey, Petrakis, Deeb, Blum, Briggs & Mitts of Philadelphia, Pennsylvania. (Peter J. Deeb was involved in the early NorVergence bankruptcy hearing representing Partners Equity Capital Company, LLC as well as the case with IFC Credit Corporation and the FTC. Mr. Murphy is a top litigator with the firm: http://www.fpdb.com/attorneys/Frank_G_Murphy.aspx )

Manufacturers and Traders Trust Company (MT&T), successor by merger to Court Square Leasing, filed on June 29th a "Complaint on Confession of Judgment," claiming $518,843 owed (now $38,885.26 interest as of February, 2009 and attorney fees of $51,848.35) at $609,218.14. As the public pleadings disclose, MT&T have a judgment against IFC for the amount reflected in the pleading and not merely a pending complaint. Stephen Levin was the lead attorney along with Deirdre M. Richard, Lamm Rubenstone, LLC.
http://www.lammrubenstone.com/attorneyprofiles/levin.html

There is the $1 million complaint filed from an investor in California, as wells as previous attorneys not being paid $170,000 for their NorVergence lease legal fees, and many brokers and vendors, who are continuing to email and telephone Leasing News asking for advice, but realizing in the conversation that they know they will never be paid. It appears many vendors read leasing news to learn about IFC Credit and other companies.

In the meantime, the former CEO of First Portland Corporation dba First Corp., Len Ludwig, who reportedly holds a 100% stock pledge agreement from Rudy Trebels, is trying not only to save his investment, but keep the company alive, saying he will take care of all the banks, the debts, the lawsuits, and both brokers and vendors who have not been paid, although there will be not infusion of capital or guarantee of debt of any consequence. He has reportedly told investors he will put together a new line of credit with their help and bring First Portland Corporation dba First Corp back to life (no mention was made about the Brooklyn Bridge as extra collateral as rumored).

There is a continued hearing today in Cook County Court, Illinois. His right hand man Thomas E. Laury was put in charge of IFC as "project manager" and Ludwig wants to take full control. While Ludwig appears as the good cop, Laury has been given the role of the bad cop, several sources have told Leasing News in more explicit language. If the same Thomas E. Laury, he was disbarred as an attorney for sixty days in 1985 in Oregon, where Ludwig ran First Portland Corporation as CEO. (1) Reportedly Laury has served Ludwig in other capacities. Telephone calls to IFC Credit were not returned.

Ironically CoActiv Capital was formed by two principals caught up in NorVergence Leases: "November 27, 2002 , 'Donald P. Campbell and Steve A. Grosso, both former leaders at De Lage Landen Financial Services, Inc., Tokai Financial Services, Inc., Fidelity Bank N.A., and ITT Industrial Credit, announced the formation of Partners Equity Capital Company, LLC (PECC).' ..Jan. 18, 2007: "Marubeni America Corporation ("MAC") has entered into the finance leasing industry in the United States with the launch of a new subsidiary, CoActiv Capital Partners LLC ("CCP"), retaining the employees and most of the lease assets of Partners Equity Capital Company ("PECC"). You would have thought they knew better after their experience with NorVergence leases and IFC Credit's position, too. Oh, well, sounds like a NorVergence re-union with all the players and attorneys in a home week, but this time in court. I can hear former FTC Attorney Randy Brook laughing out loud all the way from his retirement in Washington, especially with Askounis & Darcy not getting paid $170,000 for their NorVergence legal fees.
http://www.leasingnews.org/archives/January%202007/01-19-07.htm#pecc
http://www.marubeni.com/news/2007/070118e.html

This is the first public document to declare Trebles and Langs knew IFC Credit was "insolvent" reportedly for over a year. More importantly, it is the first to charge at least two IFC Credit officers with personal fraud. It appears the office of the United States Attorney General in Illinois is looking into the matter as a follow-up to the NorVergence leasing scandal. Ironically, the FTC attorney who prosecuted the case after Brook retired, Robert Schroeder, is the new Regional Director, based in the State of Washington, as Chuck Harwood, the Regional Director for several decades, is moving to Washington, DC to take the two spot in the Bureau of Consumer Protection.

Here is a short synopsis from the 188 page public document:

"9. In December 2007, IFC, IFCI, and CoActiv were parties to a loan transaction wherein CoActiv provided funding to IFCI by means of a $25,000,000.00 credit facility for IFCI to purchase certain leases from IFC. As part of that transaction, IFC and IFCI entered into an Assignment of Servicing Agreement (the "IFCI Servicing Agreement") wherein IFC assumed IFCI's servicing requirements and agreed to service and administer the leases for the benefit of CoActiv. See Loan Agreement and IFCI Servicing Agreement attached hereto as Exhibits "D" and "E", respectively.

"22. Beginning in approximately mid-2008, the Servicing Reports ceased to show that any leases were being terminated by lessors and failed to show that IFC was receiving and depositing into other accounts the monies related to the early termination of the leases owned by CoActiv

"28. As of April 10, 2009, IFC has acknowledged that it wrongly withheld and retained over $1.6 million dollars in termination payments due to CoActiv.

29. Further, CoActiv has determined that IFC has failed to make almost $400,000 in other payments due and owing to CoActiv under the terms of the Servicing Agreements.

"30. Upon a review of IFC's financial situation, CoActiv believes, and therefore avers that IFC has been essentially insolvent over the past year and has been utilizing funds belonging to CoActiv to satisfy cash flow requirements.

"32. Mr. Trebels and Mr. Langs, as officers of IFC, were at all times aware of the funds received by IFC for termination of the leases as well as what information as contained on the Servicing Reports being provided to CoActiv.

"33. Mr. Trebels and Mr. Langs, as officers of IFC, were at all times aware that funds belonging to CoActiv were being dissipated and utilized by IFC without the knowledge of or permission of CoActiv.

34. Mr. Trebels and Mr. Langs knew at all times that the information being provided to CoActiv was false and misleading.

35. Section 13.1 of the Omnibus Agreement provides that Defendants shall pay all attorneys fees, costs, and expenses incurred by CoActiv arising from the enforcement of CoActiv's rights under the Omnibus Agreement.

41. CoActiv has been damaged as a result of Defendants IFC's and IFCI's conversion in an amount exceeding $2,000,000.00 plus interests, fees, and costs.

51. IFC and IFCI failed to properly distribute nearly $400,000 in payments collected and reported on leases owned by CoActiv for which IFC and IFCI were collecting under the terms of the Servicing Agreement, as well as over $1.6 million in payments collected on leases owned by CoActiv for which IFC and IFCI were servicing under the terms of the Servicing Agreement.

62 Defendants Trebels and Langs knew the Servicing Reports were materially false and inaccurate, yet Defendant Langs, under Defendant Trebels' direct control and supervision, and upon information and belief with his express approval, signed the Servicing Reports on behalf of Defendants IFC and IFCI and actively participated in the fraud.

63. Defendants acted fraudulently towards CoActiv in order to falsely inflate the condition of Defendants IFC's and IFCI's financial operations.

64. Defendants' Trebels and Lang benefited from the fraud since it allowed them to maintain their positions at IFC and IFCI, as well as receiving financial and other benefits related to their positions."

(1) Laury Disbarred
http://leasingnews.org/PDF/laury%20disbar.pdf

CoActiv Complaint: http://leasingnews.org/PDF/CoActive%20Complaint.pdf

Exhibit A:
http://leasingnews.org/PDF/Exhibit%20A.pdf
Exhibit B:
http://leasingnews.org/PDF/Exhibit%20B.pdf
Exhibit C:
http://leasingnews.org/PDF/Exhibit%20C.pdf
Exhibit D:
http://leasingnews.org/PDF/Exhibit%20D.pdf
Exhibit E:
http://leasingnews.org/PDF/Exhibit%20E.pdf
Exhibit F:
http://leasingnews.org/PDF/Exhibit%20F.pdf

MT&T "Complaint on Confession of Judgement"
http://leasingnews.org/PDF/MT&T.pdf