| Andover man sued over alleged paper broker scam |
|
|
| Tuesday, 20 October 2009 | ||
|
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Staff writer In the last month, two joint lawsuits have been filed in Hennepin County District Court against an Andover resident for alleged paper broker scams. One day in September 2005 when he was watching his son’s Coon Rapids city league football practice, Kris Shaw of Coon Rapids began chatting with
The friendship continued to grow and Cellette let Shaw know about a business opportunity. According to the complaint, Cellette told Shaw that he is the owner of a paper broker business called Minnesota Print Services (MPS), Inc. Cellette said he paid cash to paper mills to get a 20 percent discount and then his company would work with one or more of its 10 customers to print insert advertisements for the Star Tribune or other large-scale publications. Cellette told Shaw that lenders could give MPS short-term loans and receive the principal and interest in a month or less. Shaw accepted Cellette’s business proposal and loaned him $10,000. He got back $11,000. Shaw later loaned Cellette another $10,000 and again got back $11,000. Shaw asked Cellette to be his four-year-old child’s godfather when the child was baptized and Shaw was so happy with the investment opportunities that he talked to friends and relatives and they also loaned Cellette money. The money stopped coming, however, and on Oct. 16, Shaw and six others joined four out-of-state businesses in a lawsuit against Cellette. According to the complaint filed in the Hennepin County District Court, Kris Shaw was waiting to be paid back a loan amount of $985,000. The complaint alleges that Jeremy Shaw of Coon Rapids loaned $115,000, Steve Fondie of Blaine loaned $1,065,900, Gerald Fondie of Blaine loaned $100,000, Dean Frieler of Buffalo loaned $1,050,000, Jarrord Fondie of Zimmerman loaned $442,800 and Jeanette Mismash of Gilbert loaned $100,000 and got no money back. They are seeking repayment of these loans plus damages that could exceed $50,000. The lawsuit, in which seven individuals are now plaintiffs, was originally filed Sept. 11 by four businesses, who have the same claim that Cellette said he was a paper broker that could make them a profit, but he defaulted on the repayments. The four businesses hired financial investigator Daniel Glick of Glick Financial Solutions, according to the complaint. What they allegedly found out was that Cellette’s customers named on accounts receivable and paper suppliers lists had no business dealings with MPS. Center-Point Capital Partners, Inc. allegedly loaned MPS $18,345,000 and is asking for this plus interest for an amount equaling $19,996,000. Cold Smoke Finance, LLC is asking for the principal loan amount of $17,883,000 plus interest for a total of $19,119,476.25. Source One Funding, Inc. wants to be paid $5,415,400. The principal loan amount was $4,714,000. Equity Source Consulting, Inc. allegedly loaned MPS $2,565,000 and wants to be paid this principal plus interest for an amount of $2,756,290. Cold Smoke Finance is based out of Atlanta, Ga. The other three businesses are located in Newport Beach, Calif. Adding up the complaints brought by the four businesses and seven individuals, Cellette allegedly owes $51,146,666.25. This does not include any damages or attorneys fees the defendants may seek. In a meeting with Glick, Cellette allegedly admitted that the loans from the businesses had been used to purchase real estate property and to finance his personal lifestyle, and the bank statements he provided the businesses in August were false and had been altered by him. The lawsuit brought forward by the seven individuals alleges that Gerard Cellette Jr. bought real and personal property with the loan funds and he transferred some of this to his wife Barbara Cellette, who is also named as a defendant brought forward by the seven individuals. She is not a defendant in the businesses’ complaint. Hennepin County District Court Judge Gary Larson ordered that the Lighthouse Management Group would be the court-appointed receiver of Cellette’s possessions. He also ruled that the Anoka County and Crow Wing County sheriff’s offices would accompany the receiver to recover the property and could use force to enter the properties if necessary. Cellette owns nine properties in Crow Wing County and five properties in Anoka County, according to the complaint. In Anoka County, there are three properties in Andover and two in Blaine. ABC Newspapers attempted to contact Gerard Cellette Jr. but could not reach him for comment. Eric Hagen is at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
||
| < Prev | Next > |
|---|