ILLINOIS SCHOOL AWARDED $1.2M. IN COPIER LEASE FRAUD CASE

[Anonymous]

http://www.bnd.com/news/local/story/1105894.html
ILLINOIS SCHOOL AWARDED $1.2M. IN
COPIER LEASE FRAUD CASE
BELLEVILLE
IL– Despite the bleak picture Kevin Welch painted of his financial
situation in court Tuesday, the Okawville man accused by Governor French
Academy of fraud involving leased copiers now owes the school $1.2
million.”We’re very pleased with the decision,” said Philip Paeltz, head
administrator at Governor French. “I think the judge sent a very strong
message not only to Mr. Welch but to the leasing industry that they
have to be fair and honest.”The $1.2 million verdict, issued by St.
Clair County Associate Judge Andrew Gleeson on Tuesday at the conclusion
of a one-day civil trial, includes about $470,000 for actual damages,
$43,000 for legal fees and $700,000 in punitive damages.
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During the trial, Welch, who defended himself,
said the collapsing economy left him unable to make lease payments. And
as an example of his current financial condition, he noted how he no
longer has a vehicle in his own name.Paeltz said he’ll start making
plans for the $1.2 million once the school sees some of it.”I think it’s
very unlikely that we’re going to get that money,” he said. “But we’re
gonna try.”Governor French sought $50,000 in damages and fees from Welch
regarding a dispute involving leases for copy machines that it returned
to Welch in exchange for newer copiers under their two-machine lease,
according to the complaint. The complaint accused Welch of pocketing
money from the leases rather than paying suppliers. It alleged Welch
took the money from leases the school administration thought were
terminated, money that he told school officials would go toward their
new lease payments.

Paeltz has said the value of the leases and
the machines totaled an estimated $500,000.
Welch said he had no
intent of causing any damage to Governor French or any of the other
organizations mentioned in the trial of having similar complaints of
fraud against him.”There was no intent there,” he said. “And I never
once stated I didn’t want to pay this back.”But Governor French’s
attorney, Kevin Stine, said in his closing argument that Welch did
intend to commit fraud by confusing his clients with false information
“so he could feed his bank accounts.””There’s only one way he knew how
to make money, and that was to defraud customers,” Stine said.

Stine
mentioned at least six prior complaints of fraud made against Welch by
school districts and youth and senior centers that leased copiers in
Sparta, Okawville and East St. Louis.”Mr. Welch has had many
opportunities to clean up his act, and he’s decided not to do so,” Stine
argued.Gleeson told Welch the evidence against him showed “pattern
after pattern of the same behavior,” making it clear that he intended to
defraud multiple clients.”You left a whole lot of people trying to
clean up the problems that you created for them — significant
problems,” Gleeson said.

About 25 parents, students and staff
members from the school attended the trial, a gesture of support Paeltz
described as “terrific.”Deile Smith, whose 9-year-old son attends
Governor French, said she attended the trial to help show Welch the
effects of his actions. She said many parents panicked at the thought of
the school closing when Paeltz announced last semester the possibility
of filing for bankruptcy for financial protection from the seven leasing
companies that had filed suits against the school for payments
owed.”That affects my child and my child’s future,” she said. “I think
Mr. Welch needs to understand how far-reaching this is. It wasn’t just
business. You’re putting their education at risk with your questionable
business ethics.”

Kayla Mullenix, a Governor French junior, said
the possibility of shutting the school down would have been
disappointing for her because she had spent years transferring from
school to school, trying to find the right one for her. She said she and
her friends attended the trial “because we’re trying to support the
school and to get a better view about how court cases go.”

As for
the seven lawsuits various leasing companies filed against the school,
Paeltz said five are being settled but that he cannot provide any
settlement amounts because they have not been finalized. The settlements
also include agreements that would require the school drop its
complaints against two of the leasing companies for working with Welch
despite knowing of prior complaints against him.

[Author]

February 15, 2010 at 10:16 AM