DennisBeaverNovember 08, 2008 (Original publish date) • By Dennis Beaver

“We wanted to get into our own business, but none of the bankers we spoke with would loan us the money. Then we saw an ad in USA Today that seemed to be an answer to our prayers,” a reader’s e-mail began “When I say, an answer to our prayers, I really mean it, as my wife and I are religious people and believe in the power of prayer,” he added.

Two days later, the couple was in my office. During the hours that we met, several things became apparent: neither one of them had an ounce of common sense, the wife was basically an honest, trusting person and incredibly naive, but the husband had a touch of larceny in his heart.

Belief, trust, desperation and the pitch they’d get a two million dollar loan — with no collateral, no strings attached, no way a lender could ever obtain repayment — that was all the ammunition a good con artist needed. My readers were about to meet several extremely good cons.

We can get you the money

It was the fall of 2007. My readers did not know it then, but their lives would be changed in ways they could not imagine, leading to debt they could never repay and the likely destruction of friendships going back over 20 years. They were days away from bankruptcy.

“The company who placed the ad was called Business Funding Solutions. The ad stated they could get financing for start-up companies turned down by local banks,” they explained.

The couple spent more than 20 years in the animal care industry, developing a number of hi-tech nutritional supplements. They test marketed these products in several states, and were encouraged by customers to go national.

“To compete with established companies selling similar products, at least $800,000 in start-up capital was required,” the wife explained.

“We developed a business plan and visited several of the banks in our area towards the end of 2006, but everyone rejected us. Even the SBA said no. However, Dan, President of Business Funding Solutions, assured us he could obtain a $2,000.000 line of credit. He was going to fund this from a two hundred million dollar bond he had in a Swiss bank. In September of 2007 we signed a Consultant Agreement, paid a $4,500 fee, and waited for the line of credit to be set up.” he said.

Today, they are still waiting and will never see a penny of that money, as they have been victims of an Advanced Fee Business Loan scam.

“These are incredibly common, tragic schemes, we see all the time,” I was told by Dr. Lyle Sussmanm Professor of Management in the College of Business and Public Administration at the University of Louisville, Kentucky.

“Historically, start-ups have always found it difficult to obtain large loans. If you’ve been to several banks — and especially the Small Business Administration — that needs to seen as a warning and helpful, not as trying to prevent you from going into business,” Dr. Sussman explained.

“The possibility of failure is real for any new business. Why would established banks say no and some company say yes, if you pay them several thousand dollars? That is not the way legitimate business loans are made,” he stressed.

Strung along for months

In examining letters, e-mails, and speaking with my readers, it was evident they allowed themselves to be strung along for over a year, promised over and over again, “next week the money will be in your bank account.” One excuse after another was given, and gradually “business associates” of Dan entered the playing field.

There was Mike a “Bond Broker,” from New Jersey, in charge of selling that 200 million dollar bond which Dan claimed to own. Grant, Dan’s assistant who admitted to me “Business Funding Solutions currently doesn’t have a pot to pee in, until that bond is sold.”

“You mean the bond which doesn’t exist?” I replied. (I guess that made him mad, because he hung up on me.)

I spoke with all of the players, and researched them all. They exist. Dan is from Michigan, and left a trail of bad debts and judgments before leaving the state for, America’s premier hangout for cons, Las Vegas.

There is a real company called Business Funding Solutions, Inc. in Las Vegas, but it’s not Dan’s. While he has a Vegas address, as of the writing of this story, that’s all he has.

The money’s coming — borrow from your friends for now

In one of Dan’s reassuring calls to my readers, he suggested they borrow money from their friends, “just short term, as we’ll get you funded soon.”

That’s precisely what they did, borrowing $750,000 from friends!

They purchased product, hired sales staff, established an 800 number, rented office space and began living off credit cards.

They also wrote thousands of dollars in payroll checks to employees, when there was no money in their bank account.

“Dan told us it was okay to write the checks because the money would be in our account the next day.”

Of course, there was no money in their account the next day. All the checks bounced.

Weeks later, completely frustrated, they told Dan that they were going to talk with a lawyer. “Well, if you do that, the deal is off,” he smugly replied.

After I spoke with Dan — a call in which he hung up — Grant phoned, saying, “You will hear from Dan’s lawyer.”

I’m still waiting.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.