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

Daily Local News (West Chester, PA) - - FRONT PAGE - By Brian McCul­lough bm­c­cul­lough@21st-cen­tu­ry­media.com @wc­dai­ly­lo­cal on Twit­ter

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.

came.

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.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.