PHILADELPHIA – A Philadelphia investment firm and others accused of defrauding a Montgomery County man in a home equity loan transaction totaling more than $200,000, have had a default judgment entered against them.
Paul Ledebur of Glenside and PE&L Investments of Conshohocken first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on Feb. 16 versus Arthur S. McHenry III of Glen Mills, plus MAC Business Services, Ltd. and Be The Bank Investments, both of Philadelphia.
“Paul Ledebur met a defendant BTB sales representative, Lauren Richards, at a networking event in Philadelphia in February of 2016. Richards told Ledebur that defendant BTB dealt in non-traditional loans, typically made to small developers that were flipping houses in South Philadelphia. Ledebur was interested in becoming a lender on such projects. After exchanging emails with Richards, Richards told Ledebur about defendant McHenry, a CPA and the owner and principal of defendant BTB,” the suit stated.
“Richards introduced Ledebur to defendant McHenry at another networking event in March 2016. Defendant McHenry told Ledebur that Ledebur could use the equity in his home to make money for him. Ledebur agreed to let defendant McHenry look for a person looking for a loan to set Ledebur up with, and talk further about being a lender.”
The suit said after trading phone calls in the spring of 2016, McHenry and Ledebur planned for the latter to qualify and receive a home equity loan with Santander Bank, which he did. Soon afterwards, McHenry told Ledebur the details of the lending opportunity he had found for Ledebur, to a Maxo Michel and Martha Michel.
McHenry was said to have termed the transaction as “a good deal”, that he had invested his own money into it and that the deal had collateral back-up, in addition to a guarantor in the oil business, SG Energy Longsport, which was a close personal friend of his.
As a result, Ledebur believed the transaction would be secure and formally entered into the deal in July 2016.
“Ledebur was told that his money was to be lent to Maxo Michel and Martha Michel, who also went by ‘the Maxo Family,’ and that Ledebur would be a lienholder on their property at 7150 Ogontz Avenue in Philadelphia, as collateral for the loan,” the suit stated.
“Defendant McHenry told Ledebur that he would receive $2500/month in interest payments, until the loan was paid off in three months’ time. Defendant McHenry also stated in this email that ‘at the end of the day we had SG Preston, the parent company of SGP Energy Logansport, guarantee the loan.”
The loan amount totaled out to $200,000, and Ledebur wired that amount into defendant BTB’s bank account on July 29, 2016.
McHenry provided Ledebur with a document for Ledebur’s signature representing the joint loan between PE&L Investments LLC (Ledebur’s company) in the amount of $200,000, and MAC Services (McHenry’s CPA Company) in the amount of $50,000, made to the lendees, Maxo Michel and Martha Michel, for a total loan of $250,000.
From September 2016 to May 2017, Ledebur received interest-only payments of $2,500 per month, as defendant McHenry told Ledebur he would, until the $200,000 loan payment was made. These payments were wired into Ledebur’s bank account from defendant MAC’s bank account.
However, Ledebur claimed he has not received any further payments since May 2017.
“When these interest payments stopped, Ledebur tried contacting defendant McHenry several times. Defendant McHenry would not return his calls in a timely manner, and then became completely unresponsive for a period of about two months. McHenry resurfaced around late August or early September 2017, apologized for his behavior, and promised to get Ledebur’s loan paid. Defendant McHenry told Ledebur of several dates of when the loan would be repaid, but Ledebur was never repaid on any of those dates,” per the suit.
“Around January 2018, McHenry told Ledebur that a Randy LeTang, CEO of SG Preston, was the party who was defaulting on the loan payments. Defendant McHenry provided Ledebur with another agreement, which he told Ledebur would officially move responsibility of repayment of the loan from Maxo Michel and Martha Michel to SG Preston Company. Ledebur was told that this agreement was proposed by Randy LeTang and defendant McHenry.”
In April and May of 2018, Ledebur says he had several conversations with LeTang, both on the phone and via text, wherein LeTang reassured Ledebur he would be paid. But this did not occur, according to the suit.
“In August 2018, Ledebur received a letter agreement dated Aug. 2, 2018, addressed to Maxo Michel and Martha Michel and Randy Delbert LeTang, in his position as President and CEO of both SGP Energy Logansport, LLC and S.G. Preston Company. The letter agreement purported to remove MAC from the loan agreement, and have S.G. Preston Company execute a new note directly to PE&L Investments, LLC to pay off the loan. Defendant McHenry would not sign the letter agreement, because he said that it released the collateral property, and the agreement was never enforced,” the suit stated.
“Defendants McHenry, BTB and MAC have not provided satisfactory answers to Ledebur regarding an accounting of where the $200,000 Ledebur paid to defendant BTB went, an accounting of monies paid by the Maxos and/or LeTang to defendant BTB, nor from whom defendant BTB received the money to make the $2,500 monthly payments via wire transfer to Ledebur from September 2016 to May 2017.”
UPDATE
On April 16, plaintiff counsel filed a request for a default judgment against the defendants for their failure to plead against or defend themselves from the complaint, pursuant to Federal Rule of Civil Procedure 55(a).
“The defendant Arthur S. McHenry III was served on March 1, 2021 with copies of plaintiffs’ summons and complaint, as provided by Rule 4(c)(1), Federal Rules of Civil Procedure. MAC Business Services, Ltd. and Be The Bank Investments were served on March 16, 2021. Affidavits of service as to all three defendants have been e-filed with the Court,” the request stated.
“Upon plaintiff’s information and belief, the defendant, Arthur McHenry III, is neither an infant nor an incompetent person requiring special service in accordance with Rule 4(g), Federal Rules of Civil Procedure, and is not serving with the Armed Forces of the United States, entitled to the protection of 50 U.S.C. App. Section 520. Defendant MAC Business Services Ltd is a business, and defendant Be The Bank Investments is also a business.”
The request for default added that none of the three defendants have answered or otherwise responded formally to the plaintiffs’ summons and complaint, and the time to do so, as provided in Rule 12(a), Federal Rules of Civil Procedure, has expired.
Such a default judgment was then entered on April 20.
Prior to the entry of default and for counts of violating the Racketeer Influenced Corrupt Organization Act, fraud, breach of fiduciary duty, breach of loan agreement and unjust enrichment, the plaintiffs are seeking damages individually, jointly, severally, and in the alternative, together with an award of compensatory damages, treble damages, interest, costs, reasonable attorneys’ fees and such other relief as this Court may deem appropriate.
The plaintiffs were represented by Janice L. Heinold of Raymond Coleman Heinold, in Moorestown, N.J.
The defendants did not secure legal counsel.
U.S. District Court for the Eastern District of Pennsylvania case 2:21-cv-00705
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com