A five-year old consolidated lawsuit against St. Boniface Catholic Church and the Roman Catholic Diocese of Springfield alleging they defaulted in equipment lease payments continues to make its way through the Madison County court system.
Two Indiana banks - Pacesetter Bank and Citizen State Bank - say the defendants entered into a lease agreement in 2009 for items including cameras, color copier system and video equipment but failed to make payment.
Among other things, the church and diocese argue they were defrauded by equipment vendor Kevin Welch, who pleaded guilty in 2011 to operating a Ponzi scheme that victimized various businesses, organizations and churches, including St. Boniface's.
He was accused of providing equipment that was leased/financed through third party lenders, substituting and replacing copier equipment under new lease terms while falsely indicating a prior lease would be bought out or terminated by a new lease agreement, providing used equipment that was represented as new, fraudulently signing and revising lease agreements, falsely representing that toner and service would be included as part of the lease, providing different equipment than what was leased and represented, and falsely representing himself as an emploee of a company.
Welch was sentenced in federal court in East St. Louis in 2012 to 63 months in prison. He also was ordered to pay $1.47 million in restitution, of which $488,136.82 was to go to St. Boniface.
Circuit Judge Andreas Matoesian presides over the case.
On Sept. 5, Matoesian denied a plaintiff motion to strike defendants' jury demand.
Plaintiffs, represented by David Antognoli of the Goldenberg firm in Edwardsville, had moved to strike the demand for jury trial in July saying St. Boniface voluntarily and expressly waived its right to demand a jury trial when it signed a lease agreement.
"Defendant's affirmative defense of fraudulent inducement does not overcome the jury waiver contained in the Leases," Antognoli wrote.
St. Boniface and the Diocese of Springfield, represented by Michael Nester of Belleville, responded Sept. 2 saying the plaintiffs waived any right to enforce the purported jury waiver provision of finance agreements, the jury waiver provisions included in the finance agreements are unconscionable and unenforceable, the jury waiver provisions do not apply to the affirmative defense of fraud and the Diocese of Springfield was not a party to the finance agreements and thus, even if effective, the jury waiver provision would have no effect against the diocese.
"Plaintiffs filed their Motion to Strike on July 9, 2014," Nester wrote. "...[P]laintiffs waited over four years to challenge defendants' timely-filed demands."
Other entities defrauded by Welch and the amounts in restitution ordered are:
-CENPRO Services, $44,566.53
-Christian Activity Center, $7,190.70
-City of Nashville, $1,305.24
-Clinton County Senior Services Center, $10,518.24
-Embarras River Basin Agency, Inc., $17,500
-Gillian Graphics, $2,625.03
-Goley Insulation, $3,828.31
-Governor French Academy, $367,907.22
-Roosevelt Wilson-Greater St. James Baptist Church, $2,648.80
-Haertling Radio Shack, $32,925.32
-Effingham County State's Attorney's Office, $27,000
-KD Enterprises, $8,415
-L. King Funeral Home, $8,550.53
-Midwest Sanitary Service, $4,300
-Mt. Sinai Baptist Church, $20,972
-Oakland Community Unit School District #5, $5,000
-Obermeier Trucking, $6,005
-Kansas Community Unit School District #3, $140,000
-Scheck Industrial, $113,164.07
-Sparta Community Unit School District #140, $81,977.70
-Union Contractors of Illinois, $16,155
-Village of Beckemeyer, $7,608.74
-Washington County Senior Services, $5,222.71
-Regional Housing and Community Development, $54,379.09
Madison County Circuit Court case numbers: 09-L-1156, 09-L-1157.