Monday, 13 February 2012

Investors should do their homework first

It is an unfortunate sign of our times that investors are so anxious to invest their money into schemes that supposedly guarantees them high returns when if fact, those kinds of schemes they are investing in are for the most part, crooked schemes to begin with. What follows is a crooked scheme operated by (what appears to many of the victims of the person who operated the scheme) a crook. The information I am now going to give you comes in part from an article written by Mr. D. Brazao, who is one of the writers in the Toronto Star. I am also including in my article my own opinions.

Alanna Steinberg is a wheeler-dealer who boasts of a network of investors that will be ready to help people who want to acquire money for themselves but are unable to do so. She offers to connect people seeking financing with what she described as an extensive network of private money lenders which she refers to as ‘angel investors’. She claimed that the people she deals with (‘angel investors’) don’t do credit checks, according to an email she sent to a potential client.

Steinberg always demands an upfront fee of between $2,000 and $10,000 or a back-end fee, sometimes as high as 20 per cent of the eventual loan which will become due when the money starts flowing. Right then and there she is breaking the law. Under the Consumer Protection Act, charging an upfront fee for loan brokering.

Some of the victims say the loans never materialized and Steinberg made off with the advance fees of $5,000 they paid her for her services. It is against the law to take the fees and then not have the victims get the so-called money from Steinberg’s angel investors’. What amazes me is that she hasn’t as of yet been arrested and charged with fraud despite the fact that she has been operating this scheme in both Canada and the United States.

The Toronto Star has reported that Steinberg has left a trail of ten victims across North America who fell for ads for unsecured loans and other financial schemes on Internet sites such as Craigslist and Kijiji. The victims include a health food supplier in Montreal to a family counselor in Arkansas with a PhD in theology and family counseling. All fell for Steinberg’s pitch that she could get them financing for various business ventures.

None got the promised funding. None got the refunds of the advance fees she promised if the funding fell through. Some who pressed for the money were met with a litany of excuses as to why it didn’t happen; the excuses ranged from illness in the family, busy international travel to betrayal by her partners. (Partners? What partners?) Then she fades back into cyberspace and disappears. Calls and emails go unanswered.

Steinberg apparently has no office since she prefers to do business in Starbucks coffee shops, especially the locations at Yonge and Eglinton and in Leaside streets in Toronto. Her fax line rings in Seattle. She tweets and according to her Twitter account, she has 51 followers. I would sure like to know who they are. Are they her victims? No one has an accurate figure of just how many victims there really are.

There are four judgments registered against her at the Sheppard Avenue small claims courthouse in Toronto alone. The clients were awarded their original fees, plus costs. Lawsuits filed against Steinberg in small claims courts in the Greater Toronto Area show that those who pursued her almost always won their cases. In any case, she rarely shows up to defend herself against their claims. However, for her victims collecting on their judgments is another matter.

In an email to the Toronto Star, Steinberg says the cases “have no merit whatsoever.” But if that is the case, why hasn’t she filed an appeal? Is it because she believes that there is little hope of her court creditors ever getting any of their money back?

Those who have met her say she is smart and very professional as she peddles a smorgasbord of financial solutions: from the sale of “shelf corporations. (Shelf corporations are also known as ‘aged corporations’ as these companies are literally put on a shelf and left to age, then sold to individuals who use them to raise capital for various ventures) to credit cards with high limits.

I strongly doubt that she can successfully obtain credit cards with high limits for her victims.

She also boasts that she has ways to boost credit ratings. She claims to have someone who can get into credit reporting agencies and increase the scores so that those who pay their fees to her can go from being a high risk to someone lenders will be eager to loan money to.

A Montreal businessman, who doesn’t want to be named because he’s embarrassed, paid Steinberg $1,800 to “repair” his wife’s poor credit rating. He demanded his money back once he realized that what she proposed was clearly illegal.

Steinberg wrote in a March 24, 2010, email; “My guy is able to remove anything negative from (credit) bureaus and it is permanent,” “If you live in Canada I need you to get a US based postal address for mail forwarding purposes. He charges $1,800.” However to make sure that the credit bureaus don’t discover that someone is hacking into their files she warned in an email, “If at any time you try to pay off debts after he has cleaned, it will mess up what he has cleaned,” Smelling a scam, the businessman backed out of the deal and demanded his money back.

I have further doubts that she has someone on tap that can erase information from credit bureau files unless she knows a computer hacker who can hack into credit bureau files. And if that is so, she is admitting that she is complicit in that crime as is her computer hacker. In any case, under the Consumer Protection Act, doing credit repair services is illegal.

“Beware, beware beware,” D’Anthony Latti posts on RipoffReport.com, claiming Steinberg has damaged his Miami-based Yashua Financial Inc. by claiming she worked for him. “We are neither associated with Alanna Steinberg, nor does she work for us, nor we do we work with her, nor are we partners in any form with her. We have been notified by many of our clients that she has been scamming people and then disappearing.” Latti claims to have lost between $100,000 and $200,000 after clients pulled out of deals because of an Internet posting linking Steinberg and him. He now heads a group of people “all trying to catch Alanna,” he said.

Good luck! Trying the catch this woman is as difficult as trying to catch and hang on to a snake that has been greased with Vaseline.

When he threatened to go to the RCMP with allegations of fraud, Steinberg challenged him to go right ahead. “I actually work with the FBI to bring fraudulent loan scammers to justice,” she said in an email. WOW. She was just impersonating a member of the FBI. That too is illegal.

In any case, Latti sued her and got judgment for the $1,800 plus costs, but has been unable to collect a penny from her.

Laurelle Maharaj and Viraj Balendran may be the only ones to have gotten any money back from Steinberg. The couple sued and got judgment plus costs after paying Steinberg $3,500 for a shelf corporation that was to come with $100,000 in loans.

“You both make me laugh at your uneducated, lack of business industry knowledge,” Steinberg wrote to the couple after they accused her of running a scam. Determined to get their money back, the newlyweds became amateur detectives, tracing phone numbers and doing stakeouts that eventually led them to Steinberg’s townhouse in the Eglinton and Laird area of Toronto where they served her with court papers.

In court, Steinberg agreed she had not delivered what was expected by Laurelle Maharaj and Viraj Balendran by blaming a partner for the mishap. (There she goes again with her ‘partner excuse’) She agreed to pay $300 a month, but stopped after paying them only $1,200. The couple went back to court and got an order to garnish her bank accounts and managed to squeeze another $2,600 from Steinberg before that tap went dry. Bank of Montreal advised the court there were no funds in her two accounts. The CIBC said it found $21 and sent that to the court. That really doesn’t matter as they were able to get $3,800 from this woman which no doubt included their investment and court fees along with pre-judgment interest.

Antonio Barbieri has given up trying to collect the $9,300 Steinberg charged him to acquire a shelf corporation with a built-in $6 million business line of credit. Steinberg was so professional and convincing that Barbieri recommended a close friend to her. She, too, lost $5,000 to Steinberg in a financing deal.

The hard road to collect damages forces a lot of victims to abandon the effort which is the real flaw in the small claims court system. The system puts the onus on the victims to try and collect what they are owed. Unfortunately, there is no other way available to them.

Her exploits over the last four years have landed her on such Internet consumer snitch sites as RipoffReport, ScamAlert and ScamInformer.

Google her name and you will get postings by Steinberg, in which she claims that she’s 33, attended George Brown College, lives in Toronto and is a self-employed finance broker “providing funding solutions for entrepreneurs, businesses and real estate investors.”

But you will also get a number of postings by alleged victims warning potential clients to give the “Toronto Scammer” a wide pass. One calls her a “a true wolf in sheep’s clothing.” According to some of the victims, the money never arrives.

This woman was recently tricked by two victims. It is a really fun story. I would have loved to have been be a fly on the wall in that restaurant when this happened.

Peter Hughes is a licensed paralegal who recently obtained judgments for two clients, and for whom he set up the sting on Steinberg. He said, “That’s why we went to these lengths to get Ms. Steinberg to meet us.”

So he had “skip tracer” Dale Ferdinand create Lisa Hunt, a 49-year-old entrepreneur from Moncton, New Brunswick seeking $150,000 to finance a pop can recycling venture. When Steinberg met the so-called Lisa Hunt she immediately demanded a $5,000 payment to be Hunt’s ‘designated broker.’ She said the fee is fully refundable if financing didn’t materialize in nine months. She also said that the $5,000 would get Hunt a password to access a network of 20,000 angel investors. The contract Steinberg handed her warned that circulating the list of those investors on the Internet is a serious offence that would make Hunt “subject to the necessary repercussions by law.” Oh, Please. Give me a break, silly woman.

Steinberg sat at Wendy’s restaurant expecting the $5,000 she demanded up front from her latest mark. What she received instead were court statements of claim from two former clients who for two years have tried to recover money they say she scammed from them. Steinberg, sitting at the fast food restaurant near Toronto airport, was stunned when she realized she had walked into a sting orchestrated by a paralegal and a process server working for two of her alleged victims.

She erupted into a flurry of profanities when she realized that the person from the Toronto Star had witnessed the sting and confronted her with a list of lawsuits and Internet postings from former clients who accused her of running financing scams on the Internet.

“You want me to break your face?” Steinberg screamed as she bolted from the fast food restaurant and hurried to her nearby white Lexus sedan. “Nothing happened to any of these cases. Let’s see what you have on me — absolutely zero. Watch what I’m going to do to you. Just watch.”

Well, folks, watch what she will do to you if you are foolish enough to give her money based solely on her promise that you will become richer.

I do not understand why so many people really believe that there is an easy way to get rich other than by robbing banks. If you want to invest your money, do it in a bank or in an insurance company. I know someone who invested money in a bank and in five years, he got a high return at 4%. Insurance companies also offer the same kind of return. Anyone that offers you twenty percent has to be a crook. If you fall for those kinds of scams, you deserve to be plucked. After all, fools and their money are soon separated.

After the sting at Wendy’s, Lisa Hunt (not her real name) went back to her day job as an apprentice process server. Steinberg was last seen driving towards Toronto, one hand on the wheel of the Lexus, the other flipping the bird with her middle finger.

Steinberg is due in court March 14th for an examination of her finances. Will she show up? If she doesn’t, a committal warrant could be issued and she could spend between three and ten days in jail. This would mean that if she is stopped for any minor driving offence, the officer will check with his computer in his car and discover that she has an outstanding committal warrant for her arrest. He would then be required by law to arrest her and after obtaining a copy of the warrant, take her to the nearest jail. And when she is released, she will still owe the debt.

Remember this old adage. If it is too good to be true, ignore it. This woman is too good to be true. Ignore her unless of course she owes you money.

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