Comdata Corp. has filed a complaint in federal court here against 12 Midwest and Southeast companies over allegedly bogus customer accounts, claiming $9.5 million in damages.
Last November, the Brentwood-based trucking industry credit card processing unit of Ceridian Corp. (CEN) began buying customer accounts of Brentwood freight carrier Royal Hot Shot Services, which is currently undergoing Chapter 7 bankruptcy in Nevada.
According to the Tuesday complaint, Comdata signed an agreement with Royal Hot Shot to purchase 12 accounts of its debtors in February. The freight carrier initially offered roughly 80 accounts for sale, but later came up with only 16 companies. Comdata managers became suspicious of the accounts’ origin only after the buyout was finalized.
It turned out that Royal Hot Shot President George Alexander Jr. had himself founded most of the companies that supposedly used Royal Hot Shot's freight services, according to the complaint. They were listed as intra-company hauls and were “dead-head,” or one-way. Also, most of the companies in question were formed within a 16-month period.
Comdata found no manufacturing facilities at some of the locations listed as freight destinations. Some other locations turned out to be just “a small trailer or a shed with “for rent” signs hanging in the windows.”
“The defendants fraudulently and deceptively acted as account debtors in concert with George C. Alexander, Jr. in order to induce Comdata into purchasing dummy freight invoices,” the lawsuit reads.
Comdata is suing the following companies: Convergence Network Inc., Duofin Industries, Z-Lock Heimler Inc., The Guardian Alliance Inc., Patriot Alloys Inc., Greystone Materials Inc., BGI Industries, Paramax-Link Corp., Heimler Metals, North American Metal Products, Thermatron, and Metallurgic Enterprises Inc.
Attorneys William O’Bryan Jr., Kenneth Bryant and Candice Reed of Miller & Martin, a law firm here, are handing the case on behalf of Comdata. Efforts to find contact information for Alexander were unsuccessful.
- ALEX B FRUIN INHERITANCE TRUST; CANDACE F STEFANSIC INHERITANCE TRUST; CANDANCE F STEFANSIC INHERITANCE TRUST; FRUIN, ALEX B TRUSTEE; FRUIN ALEX B INHERITANCE TRUST; STEFANSIC, CANDACE F TRUSTEE; STEFANSIC CANDACE F INHERITANCE TRUST; STEFANSIC CANDANCE F INHERITANCE TRUST
- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS