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The story of this bankruptcy fraud is now nearly 10 years old. We believe that the fraud began in 2000, when, the evidence indicates, John Rudd, a “turnaround specialist,” recruited and organized a group of people inside and outside of Level Propane to take it over in order to neutralize Level as a threat to business as usualfor the refineries and the major propane distributors, using the Bankruptcy Court to direct it’s going concern assets to Horizon Propane, and, ultimately, Amerigas. Using e-mail in 2000, Rudd seized on crime’s critical internet moment to organize this scheme. He went so far as to address “Judge RB” of the Bankruptcy Court in his e-mails, and assign “RB” a 20% share of the scheme’s proceeds, and direct him to frustrate any attempt of the owner to retain or regain control of the business.
The 9/11 crisis put the scheme on hold until John Verbos, one of those Rudd addressed in his first e-mails, and the Chief Information Officer of Level Propane, proposed in December, 2001, according to the e-mails we discovered, that customer payment checks be withheld and hidden, so that the cash flow of Level Propane appeared to dry up. He proposed this to “DA,” whom we believe is Richard (Dick) Anter, who later became President of Level Propane while it was operating under the jurisdiction of the Bankruptcy Court. The check concealment scheme was initiated shortly afterwards and continued until August, 2002.
In the meanwhile, John Rudd was placed as “Chief Restructuring Officer” (CRO)by the Bank Group (Deutsche Bank), Level Propane’s lead creditor, on March 7, 2002 in concert with BFCA, then Level Propane’s counsel. While he was CRO, Level’s customer base continued to grow significantly, but, because of the concealed customer checks, it remained cash strapped. He resigned effective June 3, 2002. The next day, William Maloof, founder and owner of Level Propane, proposed to BFCA a course of action to stabilize the situation, which was rejected without discussion by both James Hill and Jeffrey Schwartz of the firm, despite the fact Mr. Maloof was Level Propane’s CEO. The Bank Group put Level Propane in Bankruptcy 3 days later, securing Randolph Baxter as the judge presiding over the case. The Bank Group installed Steven Suesas CEO and kept John Rudd onsite as its monitor. In October, 2002, after an apparently failed auction on September 23, 2002, the failure of which appeared to be arranged, the Jacobs Groupentered a “management agreement” with Level Propane through “Eaglerock Propane,” on the promise that it would lend Level Propane money through the 2002-2003 winter heating season.Richard (Dick) Anter was made President of both Eaglerock Propaneand Level.
Customer checks were again hidden throughout the 2002-2003 heating season, only this time Anter showed a direct role in the scheme, directing the mail where the checks could be taken and concealed. Meanwhile, beginning in December, 2002, thousands of pages of corporate records were shredded or thrown out by the Horizon Eaglerock management team. In January, 2003, Anter and Natasha Brandt, an accountant and attorney with Level Propane, arranged for the customer payment records to be secretly taken off-premises while Sues and the Bank Group started work on compromising the databases to hide customers and customer tanks.
In March, 2003,Brian Salvagnifound another mass of corporate records at the loading dock of the headquarters, ready to be thrown out. He alerted Sues, who was forced to feign an investigation.Tony Pressly, a building maintenance worker, confirmed that corporate documents were thrown out by the Horizon management team. During the investigation, Pressly was warned that he might be criminally liable and told to hire a lawyer. A few weeks earlier, Marc Schlachet, filed a complaint in Bankruptcy Court in which he alleged that Benesch, Friedlander, Coplan & Aronoff (BFCA), the law firm that represented Level before the Bankruptcy, and for which he had worked until January, 2003, colluded with the Bank Group to seize control of Level Propane. The United States Trustee moved for an Examiner based on Schlachet’s allegations. (BFCA was appointed Counsel for Level in the Bankruptcy, in September, 2002.) Salvagni was forced to resign from Level, and soon after named an unindicted coconspirator in a Medicare fraud case, U.S. v. Triana.
By April, 2003, the Level Propane Bankruptcy was getting unwelcome press attention. The Eaglerock management team could no longer shred or throw out documents, so the first week of April, they piled a thousand boxes of customer contracts and records and burned them as a bonfire in a parking lot of the headquarters building. Three weeks later the Examiner was appointed. He had little more than 30 days to investigate the corruption in the case, and did so after much of Level’s records had been destroyed. He could find no evidence of wrongdoing, because all of the evidence was gone.
It was years after the business was sold to Horizon and then to Amerigas, when a comment made in passing that document destruction was not an accident but a policy during the Level Propane bankruptcy, that the founder began to renew his investigation. After years of tireless effort, he has the wrongdoers in his cross hairs. Only time will tell whether justice will prevail.
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