Woah........
http://m.citizensvoice.com/news/huber-b ... -1.1773955BY ELIZABETH SKRAPITS, STAFF WRITER
Published: October 20, 2014
The partnership formed to purchase the Huber Breaker has apparently soured, with the partner who provided the financing suing the others.
In a suit filed in federal court last month, Reivia Ashley LLC accuses Philadelphia-based Paselo Logistics LLC of stealing money and scrap metal from the former coal processing site and is asking to get the money back — and for Paselo to stay off the property.
Reivia Ashley LLC, based in Wyckoff, New Jersey, and solely owned by Ronald Garner, was supposed to get all the money from the Huber Breaker project first, but the funds were diverted by Paselo Logistics, according to the lawsuit.
Reivia Ashley LLC is asking for an injunction to stop Paselo Logistics from taking anything else from the Huber Breaker and an accounting of all property removed from the site, and is seeking in excess of $150,000, plus fees and costs.
Garner’s attorney, James Golden of Philadelphia, said the essence of any breach of contract complaint is that one party says the other party isn’t doing what they promised to do.
“Whatever we wrote in the complaint is what our claims are,” he said.
A trial is scheduled for July 20 in federal court for the eastern district of Pennsylvania, provided the two parties don’t settle their differences first.
“I approach all my cases with the expectation that there will be a trial,” Golden said.
Paselo Logistics was formed by Angelo Franco and Pasquale Scalleat of Philadelphia “to service the steel demolition and recycling needs of the east coast market,” according to the company’s website,
www.paselologistics.com. The website also notes that “In October 2013 Ronald Garner joined Angelo and Pasqualle as a consultant and provided financing for the acquisition of the Huber Ashley Coal Breaker.”
Scalleat’s sister, Maria Scalleat of Hazleton, was also involved in the company and did its bookkeeping.
Attorney Nino V. Tinari of Philadelphia, who is representing Franco and the Scalleats, was out of the state on unrelated legal business and was unavailable for comment.
According to the lawsuit:
In the spring of 2013, Franco approached Garner about a new scrap metal business he was working on with Pasquale Scalleat and discussed the idea of buying the 25-acre Huber Breaker property.
The property’s owner went bankrupt and it was up for auction.
Over the next few months in 2013, Garner visited the Huber Breaker property with Franco, Pasquale Scalleat “and possibly others” to talk about entering into business together and to assess the potential value of steel on the property.
Paselo Logistics and Reivia Ashley forged a loan agreement in May 2013. In October 2013, Paselo Logistics bought the property at bankruptcy court for $1.27 million; Reivia Ashley loaned $1.2 million to Paselo to complete the purchase.
Under the terms of the agreement, Reivia Ashley was to receive interest of 3 percent per year and half the profit from the sale of the scrap metal, which, it was estimated, would bring in about $5 million.
After all the scrap metal was sold, Reivia Ashley and Paselo Logistics would sell or develop the land, possibly mining coal or selling the mineral rights.
An application filed with the state Department of Environmental Protection indicates the company intends to mine 250 tons of stripping coal to determine the extent of the coal reserves.
The lawsuit continues:
Reivia Ashley was to have full control over all money received from the property.
In the beginning, the parties got cash for selling equipment left at the site. Later, they sold scrap metal from demolishing the structures.
Garner would visit the site at least once a week to collect the money, depositing it in a joint account with Pasquale Scalleat. Revenue checks, when they cleared, would be transferred to another account Garner used to pay approved bills and repay the loan.
“To date Paselo Logistics has reported collecting a little less than $1,800,000 in equipment and scrap revenue and almost all the steel structures are gone,” the suit states.
As the buildings at the site were being demolished and the steel shipped out, Garner started to wonder if the amount of steel expected to come from the job was accurate. He also became concerned that Franco and Pasquale Scalleat didn’t have proper control over expenses. They had already exceeded the $800,000 budget for expenses before the job was complete.
“The financial concerns caused Garner to ask more questions about the operations of the job,” the suit states.
In late spring, Garner asked to see the bank statements to see whether the expense checks he was writing matched up with actual expenses. Garner alleged Franco and Pasquale Scalleat refused him access to the joint account until he threatened to get his attorney involved.
Garner spent about two hours reviewing the account on Aug. 25, and discovered ”several disturbing deposits from several vendors to which Paselo Logistics sells steel as well as a few large deposits going in and out of the Paselo 1 account (one for $197,000).”
Two days later, Garner met with Pasquale Scalleat to tell him what he had found.
“Scalleat said he was shocked and knew nothing about what Garner was describing,” the suit states.
In May, Garner had given Maria Scalleat a signed blank check on the Reivia Ashley account to cover unexpected expenses. He stopped payment on that check on Aug. 26, the day after he had reviewed the joint account. Three days later, the bank manager notified Garner that someone was attempting to cash or deposit a check on the Reivia Ashley account in the amount of $100,000 — the same blank check Garner had given Maria Scalleat in May. The bank is investigating.
In his brief review of the joint account, Garner discovered nine checks totaling more than $50,000 from vendors who purchased scrap steel from Paselo Logistics — checks that should have been deposited in a different account. Garner also discovered 60 checks totaling more than $300,000 payable to Maria Scalleat and Pasquale Scalleat, signed by Pasquale Scalleat and Maria Scalleat.
“While it is possible that some of these checks are legitimate, it is not possible that most of them are,” the suit states.
Garner also discovered a check signed by Pasquale Scalleat, written on the joint account to P S Capital Ventures, a company owned by Pasquale Scalleat, the lawsuit says. Garner stated in the suit that he does not know of any legitimate reason for the check.
“From the amount of steel sales far less than expected, the apparently diverted revenue, the stolen check and the attempt to steal $100,000, it is almost certain that Mr. Franco, Mr. Pasquale and Ms. Pasquale are stealing money and steel from the project. It is almost certain that in addition to the diverted money, they are selling steel and not depositing the receipts even in (the joint account),” the suit states.
“If Mr. Franco, Mr. Pasquale and Ms. Scalleat are not prevented from all activities at the Huber Breaker site and the Paselo Logistics operation, they will continue to steal money and steel, and it may be close to impossible to determine how much they stole,” the lawsuit states.
eskrapits@citizensvoice.com, 570-821-2072