According to a complaint filed in the U.S. District Court for the Central District of California by the Securities and Exchange Commission, Ralph T. Iannelli and his leasing company, Essex Capital, were charged with making a series of false and misleading statements and illusory personal guarantees to registered investment advisers to induce them to invest millions of dollars of their clients’ money in Essex’s failing equipment leasing business.
According to the complaint, the action arises from an $80 million offering by Iannelli, between 2014 and 2017, through the sale of promissory notes that paid a high rate of return – typically 8.5% per annum. Those investor returns were supposedly based on the strength of Essex’s equipment leasing model, in which Essex’s lease portfolio would generate sufficient income to fully offset its borrowing cost and obligations to noteholders, leaving Essex with a profit of its own.
Some 70 investors were taken in by the alleged scam through the sale of promissory notes that carried a high interest rate, according to the complaint.
The SEC alleges that Essex and Iannelli provided one investment adviser with fake financial statements that overstated Essex’s assets by more than $20 million, and falsely told another investment adviser that Essex would assign equipment leases to its clients when the same leases had already been pledged as collateral for bank loans.”
Monitor 100 2018
It used to be so easy. Lessors would attach schedules of casualty values and early termination values to an equipment lease agreement. These values typically were expressed as a percentage of the lessor’s cost of the items of equipment suffering... read more
Monitor 100 2018
Implementation of ASC 842 Leases will begin for larger companies in the fiscal years starting after December 15, 2018 and in fiscal years starting after December 15, 2019 for other companies. The impact of this accounting standard is operating leases... read more