Cendrowski Corporate Advisors has an intimate knowledge of the challenges presented by defaulting business and real estate loans, foreclosure, and bankruptcy proceedings requiring court-appointed receivership.
Example Engagement: Unwanted Cleaning Supplies
We were engaged by a receiver to be named as experts and assist the Federal Trade Commission with an investigation of a mail fraud scheme. The alleged defendants would telephone customers, offering to ship “free” samples of their cleaning products and then bill the customers for these products, demanding payment. If the bills were paid, the defendants would ship more unordered products and larger quantities to those customers, seeking additional payments. Customers apparently paid these invoices, not realizing that they never ordered the product. When customers refused to pay for the unordered merchandise, the defendants allegedly used aggressive collection efforts to pursue collection of purportedly overdue amounts.
We were called in to assist the receiver with the Temporary Restraining Order, asset freeze, and shutting down business operations. The FTC supported its motion for the TRO with approximately two dozen sworn declarations from alleged victims and the Better Business Bureaus, which received hundreds of complaints about the defendants. Along with the help of United States Postal Inspectors, we raided the defendant’s place of business and conducted an internal onsite investigation. We were able to gain control over the business, shut down the boiler room telemarketing operation, image computer hard drives and servers, interview key employees, and review all files and documents located on site.
Next, we were tasked by the receiver to retrieve the assets of the receivership estate, and investigate the complex integrated business operations and financial condition of the defendant’s entities. Working with the FTC, we were able to uncover several bank accounts being utilized by the named defendants. Throughout all of these accounts, we were able to trace thousands of transactions totaling over millions of dollars. Our analysis of the financial records allowed us to calculate the gross revenues this scheme had generated from the preceding five years. We were provided with a server the defendant used to house their accounting systems. Analysis of these accounting records allowed us to calculate valuable customer and receivables records to see if their businesses could operate lawfully and profitably. Reviewing the financial records and transactions allowed us to show how the business operations and finances were substantially intertwined. The analysis uncovered that one company was paying the credit card expenses of another separate company in question. The analysis also concluded that this company was paying the legal and operational fees for a different entity. Additionally, the receivership defendants used each other’s loan facilities, employees, branding of products, and equipment to operate their various businesses.