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 user 2010-02-15 at 10:15:16 am Views: 156
  • #23432
    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.