Malvern-area business seeks $1M in damages
Owner of Malvern-area The Sullivan Corp. says Ohio firm ran Ponzi-like scheme and he was a victim
A Chester County businessman is suing an Ohio company, claiming it ran what amounts to a Ponzi scheme.
WEST CHESTER » A Chester County businessman is suing an Ohio company, claiming it ran what amounts to a Ponzi scheme in bilking his firm out of more than $250,000.
The lawsuit, filed by attorneys from the Duane Morris law firm in Philadelphia on behalf of Jeff Czajkowski as owner of The Sullivan Corp. of Tredyffrin, alleges officers of ExchangeBase LLC of Rocky River, Ohio, have been engaged in a pattern of ripping off companies with which they do business.
Anthony Gallia, a partner with Duane Morris, said his firm is seeking more than $1 million in damages in the suit filed in Chester County courts.
“There are some cases in my business that really turn your stomach, and this is one of them,” Gallia said. “We’ve been in discussions with the FBI and have provided them with information ...
“This is a young man with a beautiful wife and three beautiful young girls who’s worked hard to start his own business,” the attorney said. “This is a lot of money to a small company. It’s enough to make business tough.”
Sullivan Corp. buys excess steel and resells it. In early May, according to the suit, ExchangeBase contacted Sullivan Corp. with an opportunity to purchase surplus tubing and casing. Based on ExchangeBase’s repeated assurances, both verbal and written, that it had the right to sell the pipe owned by Chevron USA Inc., Sullivan Corp. entered into negotiations with a customer for the resale of the pipe, according to the suit.
Sullivan Corp. wired ExchangeBase $257,040 and expected to receive releases of the two lots of surplus pipe to allow its customer to pick up the steel, but the releases never
“There are dozens of lawsuits against ExchangeBase and its principals – 17 in Cuyahoga County, Ohio alone – accusing the defendants of stealing, scamming, and swindling businesses, individuals, and agencies out of millions of dollars.” — Lawsuit filed by The Sullivan Corp.
Sullivan Corp. was subsequently promised the completion of the transaction at a later date, a refund, and even that the funds would be placed in escrow after Sullivan Corp. reported ExchangeBase and the individual defendants to the FBI, Cleveland Division and the Rocky River Police Department.
“But to this day, ExchangeBase still has not upheld its end of the deal. Contrary to all of the representations, assurances, documents, etc. from ExchangeBase, Chevron confirmed that there was no deal with ExchangeBase for the two lots of pipe, nor would there ever be,” the lawsuit alleges.
“There are dozens of lawsuits against ExchangeBase and its principals – 17 in Cuyahoga County, Ohio alone – accusing the defendants of stealing, scamming, and swindling businesses, individuals, and agencies out of millions of dollars,” the filing alleges.
ExchangeBase’s Pennsylvania attorney, Claudia McCarron of the Philadelphia office of Lewis Brisbois, said Tuesday she would have no comment on the pending litigation and referred questions to the company’s Ohio attorney, Wesley Lambert of Brouse McDowell.
Lambert did not respond to inquiries Tuesday.
Gallia said in a phone conversation that officers from ExchangeBase have been able to “dupe” other companies by using the courts to delay justice.
“I don’t think any Chester County judge is going to put up with that nonsense,” Gallia said. “They think they can get away with it because you won’t come after them for that amount of money, they think you won’t chase them down. We took the case believing we will be made whole.”
Duane Morris is seeking three times the amount it argues The Sullivan Corp. lost, punitive damages and attorney’s fees for a judgment of over $1 million.