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Virginia Goes After Financing Alternatives Founder's Assets

$7 million in consumer layaway payments may be missing

By Joseph S. Enoch
ConsumerAffairs.com

March 18, 2008 

Christian made “unlawful and excessive” shareholder transfers to himself of at least $7,148,319.22 and the state is going after every penny of that, according to court documents. He could also be held accountable for up to $3,500 per violation for the 20 state consumer violations he and his company are accused of perpetrating.

“As of August 2007, 1,765 consumers had paid Financing Alternatives in full for computers that had not been shipped,” according to court documents. “These consumers paid a total of $3,281,604.”

While the company was failing to ship its products to its paid customers, Christian was allegedly funneling large sums of money to himself, prosecutors charge.

Court documents say Christian made unlawful transfers to his family members as well, but do not list the money his wife, Michelle, allegedly took from the company in the months before a local circuit court judge suspended the company's business and handed it over to receiver Paul Campsen.

Documents missing

It is believed there are more consumers who paid in full and received nothing, but the state has been stymied in its attempt to recover financial documents the Christians supposedly took from the company's premises days before the courts shut it down.

There are likely many more consumers who made partial payments, but the state has not tallied that figure as the complaints continue to come in every day, said Campsen's assistant, Bronwen Joyner.

FAI, based in Chesapeake, Va., is accused of swindling thousands of consumers by targeting poor people and luring them in with the prospect of owning a “brand new, brand name desktop or laptop” with no credit check, according to ads that ran on TV and radio across the nation.

Those “brand new” computers, however, were somewhat outdated, selling for no more than $500 in a store while FAI sold them for around $2,000.

FAI requested consumers make 13 weeks of payments before the computer would be shipped. However, many consumers say they never received a computer or a refund after 13 weeks, or anytime thereafter.

“My husband and I ordered a computer from Financing Alternatives back in Sept. 2006 and we paid $1871.48 and the last payment was August 7, 2007,” wrote Tammy and David of Center, Texas. “We paid $35.99 weekly bank drafts from our checking account and they were supposed to send our computer in June of 2007, but we never received it. We called them but just kept getting a busy signal.

“We disappointed our children because they truly were looking forward to getting that computer and so were we.”

ConsumerAffairs.com has received 202 complaints; the Better Business Bureau has received 487 complaints, according to its website; and the Virginia Department of Consumer Affairs has received more than 2,500 complaints according to investigator Mike Coston.

Assets diverted

The attorney general's amended complaint accuses Christian of using the company's assets for gambling and for starting a new company. While the complaint does not identify what company that is, it is believed Christian is using FAI's assets to operate an identical computer layaway scheme called Green Frog Funding, out of his garage.

Christian and his wife took most of the company's physical belongings after wiping out much of the finances in early October, leaving only about $60,000 in assets. Meanwhile, the company also owes thousands in back taxes and unpaid advertising.

Green Frog's website has undergone numerous facelifts in the past month, including one that pictured Christian, but it is unclear if it has accepted any orders yet.

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