SEC Files Compliant Against Failing Equipment Leasing Company
JUN 13, 2018 - 6:36 am
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.”
Transitioning from a third-party originator (TPO) to closing deals on your own balance sheet can be a risky endeavor without the right tools, network and drive. Professionals within this industry make the switch for a multitude of reasons, sometimes meeting... read more
Steve O’Leary and Tim Conway, now CEO/president and chairman of Clarus Capital, respectively, began their business partnership at NewStar Financial, where Conway was founder and CEO and O’Leary was the architect of the company’s equipment finance business. O’Leary enjoyed his... read more