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Wednesday, January 27, 2010

Governor French Academy: You Want to Cheat Kids? You Pay 1.2 Million.

This story I brought to you back in August.

Seems one of our colleagues decided to work the "leasing shell game" screwing kids out of dollars.

This is despicable.

The judge thought so too stating to the accused, "...You had knowledge, you had intent, look at the tsunami you've left in your wake."

If this case is not bad enough, according to testimony Welch, the bad guy, is accused of defrauding several other institutions, including the Christian Activities Center in East St. Louis, the Okawville Senior Center in Okawville and the Sparta and Oakland community school districts.

BELLEVILLE -- An Okawville man accused of orchestrating an elaborate photocopier scam was ordered Tuesday to pay $1.2 million to a private school in Belleville.

In a courtroom packed with students and parents from Governor French Academy, St. Clair County Associate Judge Andrew Gleeson told Kevin Welch that his actions over the last decade showed a pattern of, at the very least, intentionally confusing customers about the leasing agreements he set up as part of his copier business.

"You had knowledge, you had intent," Henry said. "Look at the tsunami you've left in your wake."

In the civil suit, Governor French Academy accused Welch of creating a pyramid scheme of copier leases. Welch allegedly got the school to lease two copiers, and the school then signed leases for what they believed to be new machines, with payment going to Welch.

When new copiers were needed, the suit alleged, Welch replaced them and said the new lease agreements nullified the old ones. But Welch neither paid off the old leases nor returned the old machines to the leasing companies.

Welch, representing himself, denied wrongdoing, saying that the school should have understood the lease terms. "I had no intent of damaging these people at all," he said.

School attorney Kevin Stine said the seven lease agreements for 14 copiers that Governor French signed left the school with more than $500,000 in bills to leasing companies.

Moreover, according to testimony in the one-day bench trial Tuesday, Welch is accused of defrauding several other institutions, including the Christian Activities Center in East St. Louis, the Okawville Senior Center in Okawville and the Sparta and Oakland community school districts.

The judge said that the testimony persuaded him to add $700,000 in punitive damages over the school's losses. "It scares me what you've testified to," Gleeson said. "I need to send a message."

Parents and students watched the proceedings, and the judge commented before the lunch recess on the strong attendance.

Parent Deile Smith said that what Welch did to the school was more personal than business. "What he did was put a very good school in jeopardy of closing its doors," Smith said. "As a parent, it angers me."

The school had said last fall that Welch's fraud could send it into bankruptcy.

Welch said during his testimony that he was in dire financial straits. He left the courtroom without comment after Gleeson's verdict.

A spokesman for the Illinois attorney general said the state is investigating Welch's scheme.

Governor French Academy files another suit alleging fraud in copier lease: Marlin Leasing
A "Pyramid Scheme" in Copiers - The Struggles of Governor French Academy Continue
More Copier Leasing Crime: How Would You Like to Be Sued By SEVEN Leasing Companies?

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  1. This is so one-sided. Anyone who knows anything about leasing copiers knows that there is "more to the story"... Governor French Academy knew exactly what was going on - when they wanted copiers updated or replaced and were not going to experience any increase to cost? Come on. They need to take responsibility in this situation. Salesmen roll leases all the time - sometimes it comes back to bite them. This unfortunately is one of those times for this poor sales guy. I know how this works from both sides.

  2. Anon --

    did you read all the stories?

    Sure, the school admin. sucks...but there really wasn't a salesman on this; it was the owner.

    And he didn't just "roll in" a lease, he took the money, and didn't term or roll the existing lease into the new one.

    No no no...there is no shade for that guy, none.

    Makes us all look bad.


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