Collins Accused of Investor “Rip Off”

4 Jun

A website that recently appeared online accuses former Erie County Executive and current NY-27 Republican congressional candidate Chris Collins of “ripping off” a group of local Buffalo investors for his own gain. More shockingly, it alleges that, when the investors asked to meet with Collins about the matter, he insisted on doing so only in his then-office on the 16th floor of the Rath Building; discussing a private business matter on public property. No one has taken responsibility for the website. 

CollinsRipoff” explains that a former neighbor of Collins’, Richard Conway, invented the “Balance Buddy”, a device that helps parents teach their kids to ride a bike without training wheels. Conway sought investment from several prominent businessmen in WNY, but when orders increased he needed a quick infusion of cash to pay the Chinese factories to ramp up production. Conway’s company was called Jiri, Inc., and state records reveal it was dissolved in early 2010. 

The “ripoff” website alleges that, when the investors balked at ponying up more cash, Conway turned to Collins for help. But instead of joining Jiri as a new investor, Collins chose instead chose to buy the “Balance Buddy” patent outright, and wrap it into a company he already owned called “Ingenious Products” (warning: obnoxious music). In so doing, Collins paid off a secured lien Jiri owed to former Buffalo Bill Kurt Schulz, and pay the needed advance to the factory in China. As a result of the way in which the 2008 deal was made, Jiri lost its only asset, and the remaining investors were stiffed completely out of an estimated $1 million. Why

Chris Collins never speaks of Ingenious Products on the campaign trail, never holds it out as a shining example of his corporate acumen. That’s probably because the company isn’t doing well. According to court filings, today it is worthless. 

In fact, Ingenious Products was in dire need of at least one ingenious product. More important, Ingenious Products was pining for huge big box retailers to sell their mélange of middling geegaws. So, instead of simply joining the group of investors already in for $1 million, Collins had a better idea: he would buy Balance Buddy outright and fold it into Ingenious Products. Why not? Balance Buddy had supplier numbers at Dick’s, Sears and the Mecca for Chinese products, Walmart. Collins hadn’t been able to get the time of day at these mega-retailers for his ingenious hair bands. But with Balance Buddy’s previous relationship he might be able to fold in an order or two of yoga mats with the bike bolt on.

Ingenious Products then hired Conway for $5,500 per month, but he declared personal bankruptcy in 2009, listing just under $3,000 in assets and close to $950,000 in liabilities, including his Spaulding Lake association fees and all the money owed to the remaining investors in the Balance Buddy. 

Collins-JIRI Closing Statement

We’ve heard countless times about what a savvy businessman Collins is, but if the allegations in that website are true (and they appear to be backed up by authentic court filings and other documents), he seems also to be a somewhat ruthless one, as well. None of that, of course, is criminal or anything. However, if the story about Collins insisting on meeting with the Jiri investors at the Rath Building is true (naturally, no one would comment on this or confirm it), that poses some serious questions about Collins’ use of the Rath Building to handle personal business and blatantly intimidate them. It may be illegal, to boot. 

Running government like a business – does that mean cheating people, underhanded dealings, intimidation through power and privilege, and hawking Chinese-built tchotchkes? 

Collins ought to give some answers about Ingenious Products and the Balance Buddy while on the campaign trail throughout NY-27. If Collins will treat prominent Buffalo families – who invested in an invention in good faith – with dismissiveness and intimidation, how is he going to represent constituents and average people?

Incidentally, the Collins campaign has been busy trying to please various subsets of the NY-27 population (farmers, small businessmen), but nary a word about service and the reasons why he wants to representan economically diverse population in a multigenerationally depressed area. 

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17 Responses to “Collins Accused of Investor “Rip Off””

  1. Dan Fabian June 4, 2012 at 9:34 am #

    I’m surprised Mr. Collins would snooker someone. He should know better since he has been snookered before.

  2. Matthew Ricchiazzi June 4, 2012 at 10:24 am #

    Bendeho,

    You’re such a douche bag. Nothing you describe or note in this blog is at all suspect or unseemly. The purchasing of distressed assets or investment in highly risky venture start ups are common transactions in private equity. The entrepreneur is undoubtedly thankful for Collins’ investment and the opportunity that was extended to him (because without it, his venture would have went out of business sooner).

    Your attempt to discredit Collins is disingenuous, laughable, and hurtful to our regional economy. We need more investors emulating Chris Collins’ behavior and his willingness to invest in our community (under extraordinarily uncompetitive regulatory conditions that have propagated our 50 year decline).

    Collins has created jobs, launched companies, and has helped to rebuild Buffalo. When you slander him for doing that, you’re telling other investors that our community doesn’t appreciate them. You are precisely the reason that investors prefer to create jobs elsewhere.

    Now, I’m sure none of that matters to you, because you’re content making your money as a lawyer — using excessively burdensome legal frameworks AGAINST people who are productive in our economy. So, what do you care whether or not people are investing in WNY?  You’re going to find someone to screw regardless.

    Chris Collins in not the one who is arrogant and condescending. You are. 

    If you’re going to put so much time into criticizing a politician, you should articulate a legitimate argument. This blog does nothing but present unobjectionable circumstances in an unseemly tone. Does that make you feel smarter?  More influential?  There is clearly an internal emotional need that this type of thing satisfies for you. Is it a manifestation of your own professional jealousies?  Or are you just trying to keep the spark alive with your Poloncarz bromance?  

    I don’t know, but you come off as douche bag for doing it.

    -Matt Ricchiazzi

    • peteherr June 4, 2012 at 10:52 am #

      You had me until Chris Collins is not arrogant or condescending…….

      • Matthew Ricchiazzi June 4, 2012 at 11:09 am #

        Have you ever personally interacted with him? I thought he was personable, humble, and gracious. Just because the media (and the Democrat-machine) propagates a narrative in the media doesn’t make it true. 

    • Dan Fabian June 4, 2012 at 11:26 am #

      I met Chris collins last month and he is arrogant and condescending.  The media didn’t create this persona for Collins, it’s the way he is.

    • BlackRockLifer June 4, 2012 at 12:28 pm #

      Lets stop perpetuating the myth of the “job creator” class, concentrating wealth in the hands of a greedy few has resulted in less employment, less opportunity, and greater decline in our society.  The economy prospers and grows when fed from the bottom up, not from the top down. A few elitist assholes would like us to believe otherwise but those of us that are a little older and have a knowledge of history know better. 

      • Matthew Ricchiazzi June 4, 2012 at 1:09 pm #

        Look at Silicon Valley. Yes, it emerged as a result of an educated workforce, stable civil society, and infrastructure (like research universities and fiber optics). But it never would have emerged without private equity and venture capital — without entrepreneurs (and the investors who finance them) willing to take opportunistic risks motivated by the potential for wealth accumulation. Investor financing is key to economic development in the context of globally integrated markets where capital can flow to whichever corner of the world is most competitive. This is our contemporary reality, and we must be globally competitive as a region. And we can’t be competitive without a concentration of investment capital that can readily finance new start ups and innovation. 

        I’m very pragmatic in my view: yes, of course, infrastructure and an educated workforce are key to economic development — but so are the capital markets. I would even agree that capital is far to concentrated to achieve a requisite level of dynamism that leads to growth. But the solution is to enforce anti-trust laws against monopolies (something that even Obama is too much of pussy to do), not to demonize people who are trying to do good and play a key role in the success of our economy.

        I’m not articulating an ideological position, you are. You just blindly hate an entire industry or people because Obama tells you to hate them. That’s ideological and stupid.

    • Alan Bedenko June 4, 2012 at 1:09 pm #

      @google-8786c67fc68aece2135aaba3b89577e3:disqus 

      Thanks for your comment! I see you’ve taken some time off from alienating or pissing off people across the political spectrum to intercede on behalf of millionaire hobbyist politician Chris Collins. 

      Lord knows, Chris Collins is in desperate need of defending, and who better to do so than a vaguely employed, wannabe-elected, political failure, who was most recently heard from in February, when he was paid a visit by the State Police for making threats of blackmail against Senator Mark Grisanti over the fight at the Seneca Niagara Casino. 

      I don’t know whom you’re trying to impress here with this, but speculation is that you’re angling for work with Mychajliw, Collins, or Jacobs. 

      Nevertheless, the short version of your comment is that you think I’m an asshole because the original post is little more than an ad hominem attack against Chris Collins. To prove your point, you hurl ad hominem attacks at me, starting with a childish play on my name to turn it into a Spanish epithet for “idiot”. (You didn’t spell it right, by the way. It’s “pendejo”.)

      Instead of retorting by taking your name and turning it into an epithet, I’ll turn instead to the substance of your commentary. 

      1. I am a douche bag: Sometimes yes, sometimes no. It’s in the eye of the beholder. 

      2. Conway is thankful to Collins. Is he? I don’t know about that. Conway’s thankfulness got him a Chapter 7 liquidation, a foreclosure, judgment debt, and alienated the patent from a company he controlled to one controlled by Collins. He is destitute, at best living off a modest income from a product he invented. He had undoubtedly hoped to become rich off of his invention, but that will now never happen. Quite the contrary, through this scheme, Collins makes off with Jiri’s inventory and patent, leaving Conway holding a massive liability.  You might wish to look at the bankruptcy filing again. Jiri went out of business either way you slice it. It could have happened through a simple issue of inadequate capitalization, in which case at least Conway would still own the patent and be able to try again. Now? He’s got nothing. (Waterford foreclosed on the home in 2009 (Erie Supreme 13816/08)). 

      3. Thank you for your vote of confidence, but I hardly think I’m the reason why WNY is in decline, nor do I think my criticism of a political figure counts for everything that’s wrong with this region. 

      4. Yes, I earn a living as a lawyer. Actually, my practice centers mostly around civil insurance defense litigation – defending personal injury lawsuits.  So, what I do is use “excessively burdensome legal frameworks” to defend people who are accused of negligently and tortiously causing someone an injury. I am curious about your characterization of the productiveness in our economy of personal injury plaintiffs and their counsel, but I’m sure you’ll think up something that doesn’t involve misspelling a Spanish insult, or repetitive use of “douche” and “bag” within the same phrase.  

      5. Poloncarz bromance: what does Poloncarz have to do with the NY-27 race? 

      6. Ask the Bergash Associates Family, LP and Blanche Sorgi – ask Joe Fornasiero, Richard Morse, and Jack O’Neill if they think what happened with respect to Jiri, Ingenious, and the Balance Buddy was “fair” and “unobjectionable”. I’d bet they’d characterize it all differently, seeing as they’re all listed in the bankruptcy filing as unsecured creditors who gave Conway the loan to start production on the Balance Buddy, and Fornasiero is a named plaintiff in a case against Jiri Products in Erie County where Judge Curran granted him summary judgment. 

      (tl;dr: Thank you for your ad hominem attack on me in response to what you perceived to be an ad hominem attack on Chris Collins)

      • Matthew Ricchiazzi June 4, 2012 at 1:34 pm #

        You’re awfully touchy for someone who jumps at the opportunity to publish racially charged slander against me, eh? 

        I did not threaten Grisanti. Grisanti attempted to use the State Police to intimidate a political opponent (me) into silence.  You know what they said to him? They laughed in his face and told him that would be illegal.  

      • Alan Bedenko June 4, 2012 at 1:56 pm #

        Interesting to note what you latched on to there. 

        1. You should learn the difference between “slander” and “libel”. Also, I don’t have any racial animus towards Italians or members of the Iroquois Nation. Nice try, though – that’s your only retort is to play victim or hurl insults. 

        2. Well, if you’re suggesting that, when someone calls me a “douche bag” twice, and a “pendejo” (albeit spelled clumsily), I might take offense, then I congratulate you on the fact that your Cornell education didn’t go completely to waste! 

        3. Your vigorous defense of Collins and your complete unwillingness or inability to substantively address the charges made on that website – even when given the court (and other) documents to back much of it up – merely suggests you’re trying to impress someone and get the patronage job you’ve been angling for for some time. Good luck! If things don’t pan out with Chris, maybe try Stefan!

      • Matthew Ricchiazzi June 4, 2012 at 2:29 pm #

        You’re such an ass and I question why I’m even responding to this, but I suppose I will…. 

        1. Obviously. And to make the distinction, for all purposes intended, is trivial and unworthy of my time or yours.

        And, yes, your previous post on me last February was quite racist. My race is what motivated your suspicions, and you even mocked my religious views. So your self-righteousness and attitude towards me is the reason I dislike you. And it’s hilarious to hear you criticize me for alienating people! Ha! Have you read the insulting shit you write regularly?

        2. I wasn’t calling you pendejo, dumbass. You seem to enjoy finding ways to call me stupid. I guess everyone’s got their insecurities and has to get their kicks somehow… Mind you, you’re a failed political wannabe-elected too (and you actually lost your election…. unlike me, who got kicked off the ballot based on an election law that advantages incumbents and goes to great lengths to keep outsiders out of the process). You had the machine supporting you, and you still lost. Way to go. 

        3. I’m defending the capital markets and the role of private equity transactions in our economy (mainly because my degree is in private equity and structured finance, not because of an instinctive defense of Collins).  

        I’m not going to spend time reading court documents so that I can articulate an argument to you (because you’re not that important and I’m not going to waste the time). The nature of the private equity industry is that everyone engages into transactions willingly, they do their own due diligence, and they take their own calculated risks. Creative destruction is a part of the process. 

      • Alan Bedenko June 4, 2012 at 3:02 pm #

        I guess you must have just grossly misspelled my name as “Bendeho”, and that was totally innocuous. 

        Yes, I am a failed political candidate – I lost as a Democrat in a Republican district, and didn’t play the fusion game. I make no bones about that. However, I’m rather a successful political commentator; so insulting and horrible that thousands of people read my stuff every day. Including you. 

        Your defense of “capital markets and the role of private equity” has nothing to do with anything. I wasn’t critical of those things – I was critical of the fraud that Collins perpetrated on the investors in the Balance Buddy through Jiri.  I mean, if someone invests hundreds of thousands of dollars in a product, it’s totally kosher for them to have their investment essentially rendered worthless through subterfuge! Fuck ’em! (I wonder, then, why Judge Curran granted Fornasiero’s motion for summary judgment against Jiri?)

        Clearly, you don’t have the “time [to read] court documents” because your busy life of unemployment prohibits you from becoming even mildly educated about the issue at hand. So, you try and change the subject to racism, to “private equity markets”, to “douche bag”, and how it’s totally normal for businesspeople to breach contracts and commit apparent fraud. 

        And, no, I didn’t write what I did in February out of racist hatred of you (at the time, I didn’t even know if you were an Indian – I only knew that the Senecas had employed you, and suggested you had a bias in their favor as a result). You should read it again. I was quite explicit about it, wondering what your motive was. 

        If you’d like, you can write some more so I can tell you how wrong you are about everything.

      • Christopher Smith June 4, 2012 at 9:24 pm #

        “mainly because my degree is in private equity and structured finance”

        Really? I thought your degree was in failing to read instructions and failing at politics and life.

      • EricSaldanha June 4, 2012 at 10:38 pm #

        with a minor in “escape-goatting”

      • Carl Gorney June 5, 2012 at 4:49 am #

         And a sub-minor in passing off insults as reasoned discourse.

  3. Aaron Lowinger June 4, 2012 at 11:47 am #

    A compelling and constructive argument always starts by calling someone a douche bag in your first point.

  4. Aaron Lowinger June 4, 2012 at 11:50 am #

    and that’s ignoring the “Bendeho” salutation  . . .

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