Complain about a product or service

A Bleak Holiday for Computer Layaway Victims

Restitution for Financing Alternatives victims is in doubt

By Joseph S. Enoch
ConsumerAffairs.com

December 11, 2007 

Knowing the importance of her 15-year-old son's education, single parent Norma Chapman tried to buy him a computer for Christmas 2006 from Financing Alternatives, even as she struggled to keep the lights on and put food on the table.

Due to her spotty credit history, the 55-year-old Chapman thought FAI was the only place she could get a computer and they promised her that after three initial payments, her computer would arrive well before Christmas.

The computer was all her son, Micah, wanted, and although Chapman couldn't afford another monthly payment, she was willing to make the sacrifice since her son, who gets all A's and B's and is enrolled in honors classes at his high school, intends to go to college.

But a year later, she has paid $1,565 to the now-defunct company, is in Chapter 13 bankruptcy and has not received anything from Financing Alternatives, Inc. (FAI).

"He wanted this computer so bad," Chapman said. "I never promised him anything because you can break them and I don't want to break his heart. But he knew I was paying on this. Oh, we were so excited and it never happened."

'Big dummy'

Chapman, who works as a parole officer in Chattanooga, Tenn., is one of thousands of struggling consumers who paid as much as $2200 for a computer most analysts say is worth less than $500. Many if not most did not even get the stripped-down computer. Authorities say many got exactly nothing.

"I feel like a big dummy that I just threw money out of the window and couldn't pay my bills," Chapman said, holding back the tears. "I couldn't even pay rent and here I am throwing money out the window."

FAI, based in Chesapeake, Va., advertised nationwide, “Bad credit? No credit? No problem!” Countless thousands fell for the layaway scheme and it's possible they will never be reimbursed.

FAI owner George Christian in front of his home. The police officer, partly obscured by an inflatable Santa Claus, responded when Christian alleged our reporter was trespassing. -- Photo by Joe Enoch

The Virginia attorney general has sued the company, but days before FAI's assets were frozen by a Virginia Circuit Court on Oct. 5, investigators say the company's founder, George Christian, funneled most of the assets, estimated at over $1.5 million, into his wife's various accounts and a defunct company he owned called Liberty Financial. He allegedly removed the company's physical belongings from its office suite – a short walk from the courthouse. Investigators say Christian's wife, Michele, snagged all the financial records so no one has any idea how much is owed to customers.

Meanwhile, investigators say Christian wasn't paying his own employees, owed $42,000 in taxes to the state of Virginia, and over $1 million to advertising creditors.

Christian made at least $7.8 million since he started the company in 1998, FAI representatives told the attorney general. He reportedly had family members on the payroll.

But the largest debt FAI owes consists of millions of dollars to thousands of consumers who made full or partial payments for the overpriced computers and have received nothing.

The Christians and their six children are still living in their palatial 6,000-square-foot brick house, which is assessed at $864,900 and has an in-ground pool with small waterfalls. They still own at least four vehicles. They still have at least one full-time nanny. And from the looks of it, they are more than ready for the holiday season.

While Chapman doubts there will be any presents under her tree in the cramped two-bedroom apartment she shares with her son this year, the Christians have festooned their enormous house and the lot they own next door with Christmas decorations.

There's a giant spinning Santa Claus, a life-size singing snowman, an enormous blow-up snow globe and enough lights to keep Chapman's apartment lit, something she has not always been able to do herself. Her power was turned off earlier this year as she struggled to pay FAI and other creditors, she said.

State seeks restitution

Virginia is trying to win restitution for FAI's customers but the prospects are bleak. At an October hearing, Circuit Court Judge Randall Smith ruled that all the company's assets be frozen and that the company be handed over to receiver Paul Campsen, a local attorney who has acted as a receiver in the past.

The company ceased operations in August but was still collecting payments from previous customers, including those who had never received any merchandise. Campsen's job has been to determine how much the company owes and to whom. But since Michele Christian removed all the financial documents, Campsen said it is nearly impossible to determine.

On Friday, the attorney general goes back to court and will be requesting that Michele Christian hand over all the documents to Campsen. If the court decides that those documents belong to the company, Campsen will then try once more to determine who is owed what.

Campsen estimates that there is only about $60,000 left in the company. But the company owes thousands of creditors millions of dollars so authorities said the next step may be to go after the Christians' personal assets.

But Campsen said he is worried Christian may have spent all the money or laundered it into other businesses. If Christian spends all the company's money, there is little the courts can do, Campsen said.

Green Frog

Christian has already tried to start another company, presumably with FAI's assets. It was called Green Frog Funding and it offered an identical computer layaway scheme. But when local media picked up on it, the company took down all the promotional gimmicks on its website, which now says "COMING SOON."

It's possible the Christians could face criminal charges. Chesapeake police put detective Susan Mayo, who was on leave for two months, on the case. Mayo told ConsumerAffairs.com there is an "active investigation" against Christian but would not elaborate.

Chapman, who said she will never buy anything online or over the phone again, said she wants her money back but realizes she may get nothing.

"I hope he (Christian) gets to feel like I do," Chapman said. "I hope his children suffer with him like I have with mine. I hope he loses his mansion. ... I hope he loses everything he has except for a roof over his head because he has children."

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share		Follow us on Twitter.

Back to the top |