A St. Clair County company has filed a second suit this year over allegations another business should have known of a man's attempts to defraud it out of money.
Governor French Academy filed a lawsuit Aug. 5 in St. Clair County District Court against Axis Capital.
The suit is nearly identical to a June 29 complaint GFA filed against Marlin Leasing.
In both complaints, GFA claims a man named Kevin Welch solicited leased copiers and printers to the company.
GFA entered into an agreement with Marlin Leasing in September 2005 to lease the equipment, according to the August complaint.
Later, the company entered into an equipment lease agreement with Axis in August 2006, the suit states. Welch claimed any money paid to Axis would be used to pay off debt GFA owed to Marlin Leasing, the company contends.
Again, GFA entered into another lease agreement with CIT in June 2008, in which Welch represented that a portion of funds paid to CIT would be used to pay off the Axis debt, the complaint says.
"In the spring of 2009, GFA began receiving bills for the lease payments related to Lease 2," the suit states.
When GFA contacted Axis 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 wherein Welch would make a lease with GFA through a financing company such as defendant, 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."
Axis 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-410.