Chris Collins: Running His Business from a Government Office
by Alan Bedenko & Geoff Kelly
Last week, a website appeared online accusing former Erie County Executive and current Republican candidate in the 27th Congressional District Chris Collins of “ripping off” a group of local Buffalo investors for his own gain. It also alleges that, when the investors asked to meet with Collins about the matter, he insisted on doing so in the county executive’s suite of offices on the 16th floor of the Rath Building—discussing a private business matter on public property.
This last allegation appears to be verified by Collins’s Outlook calendar from his days as county executive, a public record: On September 16, 2008, at 2pm, Collins was scheduled to meet with two of the aggrieved investors: Joe Fornasero and Jack O’Neill. The meeting was scheduled in the county executive’s office.
Here’s the story, according to the website (collinsripoff.weebly.com):
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 Western New York, but when orders increased he needed a quick infusion of cash to pay the Chinese factories that fabricated his invention to ramp up production. Conway’s company was called Jiri, Inc., and state records reveal it was dissolved in early 2010.
The 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 to buy the Balance Buddy patent outright, and wrap it into a company he already owned called Ingenious Products. (Among the company’s products: hairbands, yoga mats, golf tees, biodegradable dinnerware, and a line of clothing emblazoned “FORGED: Bloodied, but unbowed.” Ingenious? You decide.) 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 they’d fronted for research and development and initial production costs. Fornasero and O’Neill, for example, owned (or continue to own, depending on your point of view) a 30 percent stake in the company.
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 genuinely ingenious product. More important, Ingenious Products was pining for huge big-box retailers to sell their mélange of 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 Walmart, the Mecca for Chinese-made products. Collins hadn’t been able to get the time of day at these mega-retailers for his ingenious hairbands. But with Balance Buddy’s previous relationship he might be able to fold in an order or two of yoga mats with the Balance Buddy.
Ingenious Products 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.
None of the aspects of the deal, of course, is criminal. Ruthless, but not criminal. However, Collins’s decision to meet the angry investors in the Rath Building—at least once, according to Collins’s own calendar; sources tell us there was at least one more meeting there as well—is certainly unethical and possibly illegal. The anonymous author of that websites writes:
Several Buffalonians say Chris Collins ripped them off for over one million dollars; that will be settled in court. But what shall be done about Collins using his Erie County Executive office space for his own personal gain, to intimidate several Buffalo families and assure they never get the money they deserve?
Jiri’s investors are indeed preparing to sue. Unless Collins settles out of court, the allegations will then become public record.
(To view the documents that contributed to this report, visit AV Daily.)blog comments powered by Disqus
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