Airleaf Victims Update September 13, 2009

Dear Airleaf Friends,

Some news has recently transpired, and I wanted to update you about this information.
On August 21, 2009, a letter was sent out to the 120 of our authors who part of the cohort of the judgment filed by the Indiana Attorney General against Airleaf last year. This is what it stated:

Dear Consumer,
As most of you know, on June 30, 2008 the Office of the Indiana Attorney General entered into a Consent Judgment with Airleaf and its owner, Carl Lau. Among other things, the judgment contained a provision regarding restitution for your particular loss. For those of you who do not already have a copy of the judgment, please feel free to access a PDF version via www.IndianaConsumer.com. Our ongoing investigation since that filing was made revealed that Airleaf and its owner are insolvent and any attempt at formal collection activity would therefore be fruitless.

On August 3, 2009 Carl Lau and his wife filed a join ‘no asset’ Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Indiana, under Case Number 09-11308-AJM-7. The filing again confirms our conclusion that further attempts to secure restitution are inadvisable.

Enclosed you will find a Notice of Bankruptcy Filing the Bankruptcy Court recently sent to my Office. Please note that the due date for “objections to discharge” is November 20, 2009. Bankruptcy law allows creditors (which you are by virtue of the Consent Judgment) to file a lawsuit within the bankruptcy proceeding to prevent discharge of the debt at issued if the creditor can prove fraud.

The State has concluded that such a lawsuit, even if prosecuted successfully, will not be collectable. Therefore, we will be unable to obtain restitution for your loss. If you believe you might wish to pursue such a lawsuit on your own, please consult a private attorney.

Sincerely,
Tom Irons, Deputy Attorney General, Consumer Protection Division

Okay, I wasn’t surprised—and I’m not quite sure why I felt upset. I expected the bankruptcy to be filed a long time ago because I heard it was in the process last year. But yet, I still felt a sense of anger because I know that Carl Lau has been collecting unemployment compensation benefits since going out of business. I also know that he did have some assets that were never really checked into like his yacht. Proof of those assets came the following week after I contacted our reporter friend Ron Hawkins at the Martinsville Reporter who dug up some interesting information. Here is a copy of his article:

August 29, 2009
By Ronald Hawkins
rhawkins@reporter-times.com

MARTINSVILLE

The Indiana Attorney General’s Office has ended its efforts to collect money from Carl Lau, the owner of the now defunct Airleaf Publishing and Book Selling, following his filing for bankruptcy.

A Martinsville-based marketing and self-publishing firm, Airleaf shut its doors in December 2007 following multiple complaints to the state attorney general, the Martinsville Police Department and Better Business Bureau of Central Indiana alleging that the company failed to pay royalties, publish books and deliver other promised services.

In May 2008, Indiana Attorney General Steve Carter announced the state had filed a lawsuit against Airleaf alleging it had taken money without providing the promised services in return. The lawsuit sought consumer restitution for at least 120 customers.

In June 2008, the state announced it had reached a consent judgment with Lau that provided for restitutions to the consumers.

A Chapter 7 bankruptcy petition, however, filed by Carl and Deborah Lau — who list a Carmel address as their home — in U.S. Bankruptcy Court, Southern District of Indiana, Indianapolis, has led the state to believe that further efforts to collect money from Lau would “be fruitless,” according to a letter sent by Tom Irons, deputy attorney general, to the consumers.

“Our ongoing investigation since that filing was made,” Irons wrote in a letter dated Aug. 21, “has revealed that Airleaf and its owner are clearly insolvent and any attempt at formal collection activity would be fruitless.”

The individual consumers, however, if they can prove fraud may file a lawsuit within the bankruptcy before the Nov. 20 due date to prevent the discharge of the debt, Irons wrote.

When contacted about the letter, Irons confirmed that it was his letter and “my signature.”

Bonnie Kaye, a Philadelphia-based counselor who organized an Airleaf victims group, said she wasn’t surprised by the state’s action, but that it reinforces her displeasure with the state’s efforts. She said her organization has more than 600 members.

“This is just another example of how the government of Indiana allowed a tragedy to happen to our authors whose lives have been shattered by the fraudulence of this company,” she said. “While Airleaf was alive and prospering, the AG’s office turned a blind eye when the complaints started pouring in.

“It was only after our actions forced Airleaf to close down that the judgment was handed down six months after the fact.”

Bankruptcy filing details

In the bankruptcy filing dated Aug. 3, the document lists $1,594,771 in total claims against Lau and $160,217 in assets.

Of that debt, the filing claims that $1,472,588 is in unsecured, non-priority claims.

The largest secured claim is $25,125 owed to Citizens Bank of Cumberland County in Burkesville, Ky., although there are several larger, unsecured claims.

The Lau’s debt list includes $74,445.81 owed to the Internal Revenue Service in employment taxes, $16,601 in state employment taxes plus $2,152 in state sales taxes and a $69,100 debt to the state for violations of the deceptive consumer sales act.

In addition to the dozens of debts to consumers listed in the 134-page document, the debts range from an American Express debt of $116 to $230,62 to Premier Capital Corp. of Indianapolis and $273,825 owed to CIT Lending Services of Livingston, N.J.

The bankruptcy also includes $19,999 owed to Author House of Bloomington, a self-publishing firm, and $4,600 to the Morgan County treasurer.

The filing states Carl Lau has no average monthly income, but Deborah Lau has an average income of $3,537 per month. He, however, has received $3,308 in unemployment compensation this year and received $13,192 in 2008.

Their monthly expenses, the document states, are $4,700 including $1,500 in taxes, but they have no rent or home mortgage payments.

Ronald Hawkins
News editor

My frustration comes from seeing that there is still over $160,000 in assets that could have been sought on our behalf. Also, the fact that Carl Lau owes the IRS and the State of Indiana payroll taxes really upsets me because he has received over $16,000.00 in unemployment compensation in spite of his criminal actions. Go figure! Also, as you see in the article, the Lau’s have no rent or home mortgage payments. This is because they moved in with Deborah Lau’s parents. While I used to feel somewhat sympathetic to Mrs. Lau, I don’t anymore. I would tell her the same thing I tell my women that I counsel—“If you don’t know the truth about your husband and he is doing the wrong thing, then you are a victim. But once you learn the truth and you choose to stay there, you are a volunteer.” And I don’t feel sympathy for volunteers.

The article states that Carl Lau owes money to Authorhouse. He owes it to them for stealing their database when he left there to start his own company. He had to make a payoff agreement with them out of court which of course was never paid off. So that shows Deborah Lau that her husband had a lack of scruples before she even knew about any of us. In addition, Carl Lau was forced to pay money for a sexual harassment suit that one of his former female employees contacted me about to let me know about her settlement. It was general information from all of the previous Airleaf employees that spoke with me that Lau was a sleazy guy watching porn on his computer and making sexual overtures to a number of the female employees or even groping them. And yet, his wife still remains with him. So now she is a volunteer, aiding a criminal. No, I don’t feel sorry for her at all. Deborah Lau is helping him avoid his responsibility of standing up and making amends to his victims. She obviously has no concern for us.

Don’t think that our efforts have been for nothing. Carl Lau will have a legacy that will follow him forever. Every time he goes for a job and someone looks up his name on the Internet, they will know what a crook he is—and this has already happened. His road will never be an easy one again thanks to our standing up and fighting back.

I called the Bankruptcy Trustee, Mr. Elliott Levin in Indiana, and spoke to him about our options late last week. There is a hearing for Carl Lau’s bankruptcy on Monday, September 21 at 1:30 p.m. in Indianapolis. Mr. Levin said any of us could show up at the hearing, but without an attorney, it’s hard to do much because an “objection to discharge” has to be filed. However, if any of you would like to go there to stake your claim, I encourage you to do just that. The hearing will only last 15 minutes, so it won’t be very long. But at least you can have a say. If you would like to go, or you would like more information, feel free to call Mr. Levin at 317-634-0300.

Although you know that I don’t have faith in the State of Indiana, I would like to thank Mr. Tom Irons for taking the Jones Harvest fraud seriously. This past week, at least five authors who were victims of Brien Jones in his scamming of authors received back money from the Indiana Attorney General’s office, and there may be more who haven’t contacted me yet. I have tracked 72 complaints from authors who were taken in by this company. If you have been scammed by Brien Jones in his new publishing company, Jones Harvest et. al, there is still hope for you to retrieve some compensation before he goes bankrupt. If you need help with this, just let me know. I will be glad to send you the information on how to file a complaint form or call you to walk you through with it.

I just wanted to give you an update. If you have any questions, please feel free to contact me.

One last announcement—we are accepting new authors for our Books of Excellence Coop. Visit our site at www.BooksofExcellence.com to see how nice the site is. This year, we will be starting Blog Radio for our group with lots of advertising and marketing. We have a monthly newsletter where we provide marketing and publishing tips to help our authors. Write to me if you are interested.

Love, Bonnie Kaye
Organizer, www.Airleaf Victims.com