A St. Clair County company claims another business should have known of a man's attempts to fraud the St. Clair County company out of money.
Governor French Academy filed a lawsuit July 29 in St. Clair County District Court against Marlin Leasing Corporation.
GFA claims a man named Kevin Welch, who represented himself as an employee of Marlin Leasing Corporation, solicited leased copiers and printers to the company.
GFA entered into an agreement with Wells Fargo in June 2005 to lease the equipment, according to the complaint.
Later, the company entered into an equipment lease agreement with Marlin Leasing in September 2005, the suit states. Welch claimed any money paid to Marlin Leasing would be used to pay off debt GFA owed to Wells Fargo, the company contends.
Again, GFA entered into another lease agreement with Axis Leasing in August 2006, in which Welch represented that a portion of funds paid to Axis would be used to pay off the Marlin Leasing debt, the complaint says.
"In the spring of 2009, GFA began receiving bills for the lease payments related to the Wells Fargo Lease, the Marlin Lease and the Axis Lease," the suit states.
When GFA contacted Marlin to say that its payments toward Axis were supposed to also be going to Marlin, the company informed GFA it was still liable on the Marlin lease, according to the complaint.
"Welch entered into and promoted a scheme of transactions with GFA in wherein Welch would make a lease with GFA through a financing company such as Marlin Leasing, who then became lessor to receive payments from GFA," the suit states. "In each succeeding lease Welch represented to GFA that the monies received from the negotiations of a new succeeding lease would be used to pay off the balance of the prior lease, so that at all times, GFA would have only one lessor. Upon information and belief, Welch used the proceeds from the old leases for his own use, and not to pay off previous leases as represented."
Marlin Leasing knew, or should have known, of Welch's fraudulent scheme, but failed to warn GFA of it, the company contends.
GFA is seeking a judgment of more than $50,000, plus other relief the court deems just.
Kevin J. Stine of Mathis, Marifian, Richter and Grandy in Belleville will be representing it.
St. Clair County Circuit Court case number: 09-L-403.
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