Sunday, September 11, 2016

Lawsuit claim: Neosho businessman's multi-million dollar scam led to Innovative Objects bankruptcy

Documents filed in a civil suit in Greene County Circuit Court claim a Neosho businessman scammed Miami Nation Enterprises into investing millions of dollars in a software business that it thought had lucrative contracts with Wal-Mart.

The lawsuit filed by Miami Nation Enterprises, an economic subdivision of the Miami Tribe of Oklahoma, in October 2015, claims Russell Grundy committed fraud by making the following representations:

-Innovative Objects would be landing a contract with Wal-Mart to provide software development. There was no such contract, the petition says.

-A company known as Green Star Consulting Group had awarded the Wal-Mart contract to Innovative Objects. The Nation claims that Green Star Consulting Group does not exist.

-The Nation loaned money and guaranteed lines of credit to Innovative Objects and other Grundy companies and bought a 70 percent interest in Innovative Objects.

-Financial statements "were inaccurate in an amount in excess of $3 million.

-Assets were listed that did not exist.

-"Grundy caused employees of one of more companies to work on non-existent projects to perpetuate the notion that one or more of the companies had a contract with Wal-Mart to provide services."

Grundy denied all allegations and filed a countersuit, claiming the Nation had failed to pay him $50,000 a month rent on Innovative Objects' property at 2340 S. Range Line Road, Joplin, and had failed to pay $79,690.32 in back taxes it had agreed to pay, as well as late charges of $7,500.

The Nation says it does not owe Grundy a cent because the entire arrangement came as a result of Grundy's alleged fraud.

The Nation is asking for more than $24 million, plus punitive damages.

Innovative Objects filed for Chapter 11 bankruptcy Thursday in U. S. Bankruptcy Court for the Western District of Missouri claiming to have between $10 and $50 million in debt.

The Nation is asking for more than $24 million, plus punitive damages.

United Missouri Bank has also filed a lawsuit against Grundy, asking that a receiver be appointed for Grundy's business. The Nation filed a motion in Greene County Circuit Court to have UMB joined with the Nation in its action against Grundy.


29 comments:

Steve Holmes said...

And the amazing thing is, it has nothing to do with Wallace Bajjali, the Blasters or the Joplin City Council.

Anonymous said...

You left off CJ Steve...

Anonymous said...

Note that this general area of the country is not an obvious place to set up a software development company. If you're good, like Jack Henry & Associates in Monett, now a S&P 400 company with over a billion in annual revenue, you can pull it off (but I'm sure it helps that they're using one if not the best systems platform to put much if not most of their stuff on, IBM's i Series (AS/400)). And they're now in the 40th year.

There's also LocalRaces.com, which may or not have a viable business model, but appears to have the technical chops to make it work.

But to get good people, you'll have to spend plenty of money to recruit and relocate them to Joplin, and/or have enough management skill to have them work remotely, almost certainly you'll need both. And entities like Miami Nation Enterprises shouldn't even think about investing in such companies unless they have a skilled software developer on tap to consult with to see if the company asking for money has a clue.

Anonymous said...

You left off CJ Steve...

Eh, we can blame for the high school no longer having a programming class, something I was appalled to discover when I checked a year or so ago. Back when I was in Parkwood in the '70s, the school had in conjunction with MSSU an excellent one given the constraints of those days, taught by, if I remember correctly, a coach.

Who really knew his stuff, one day he gave us a lecture off the top of his head on two's complement binary integers, something not covered in the text book. It's the most common low level way of representing integers (-2, -1, 0, 1, 2, etc.). To this day, a whole lot of programmers get going, employed even, without having a grasp of what's going on at this sort of low level; that class gave me a solid foundation for a later successful career developing software.

Anonymous said...

Is this the same company as PILR Technology?

Anonymous said...

Yes it is, PILR, Blu20 and, TSI also know choice Tech/Audio Input.

Steve Holmes said...

Sorry, 11:21. It was late and I was dehydrated.

Steve Holmes said...

Good point, 2:32. It'll be interesting to learn how the Tribe got sucked into such a risky venture. Pension funds and governmental groups investing on behalf of a lot of people tend to (or should) play it conservative.

Anonymous said...

Joe Frazier Chief Executive Officer at Miami Nation Enterprise resume is filled with accounting experience so how did he get sold cooked books? What about there president Andrew Jordan who also is an experienced CPA? I just don’t buy that they are poor and helpless businessmen who were taken advantage of by some tech sales guy on a horse drawn cart. If anyone cooked some books, This Andrew Jordan would be the guy. I have heard that he worked as the CFO before the tribe and is now the president thereafter.

Andrew Jordan source LinkedIn "Experienced CPA serving as President for a rapidly-growing technology company. Our PILR brand specializes in creating and supporting custom software. Our blu20 brand provides data-driven marketing, branding, design, and media placement. Together, PILR and blu20 can provide custom software that not only works well, but is designed with the end user in mind and looks great."

Joe Frazier Source LinkedIn "The University of Texas at Dallas BA, Public Administration and Finance"

This is also the same tribe who cheated lots of hardworking people with there payday loan scams and turned states evidence to avoid prosecution.

http://www.dfi.wa.gov/consumer/alerts/miami-nation-enterprises-unlicensed-payday-loans

http://money.cnn.com/2016/02/10/news/payday-lending-scott-tucker-arrest/

http://newsok.com/article/5478088

The real losers in this mess are all those employees who had families, dreams and hopes now joining the unemployment line. I would say cut your ties with all these companies and take your business elsewhere

I believe that Miami Nation is just mad because they made a bad bet and it wasn’t at one of their own casinos.

I figured after doing all this digging I would find something on Wallace Bajjali, the Blasters, CJ Huff or the Joplin City Council but this time I guess they missed the money train.

Anonymous said...

Yes after they moved from Duenweg to behind McAlister's they changed the name.

Anonymous said...

Joe Frazier Chief Executive Officer at Miami Nation Enterprise resume is filled with accounting experience so how did he get sold cooked books?

The claim isn't that the books were cooked so much as a critical entry in them was completely false, and accountants in general only discover that statistically, when the pick a few entries in the books and trace them all the way.

Which makes one wonder why MNE didn't trace the claim of a big Wal-Mart contract all the way to Wal-Mart itself, if that indeed is what happened.

For that matter, that would be white line fraud, has MNE referred this to the Feds?

Anonymous said...

Someone should look into that Andrew Jordan guy. I heard from an accountant at Innovative some stories about him and his accounting background from the past, guess they were questionable at best.

From the links above it looks like MNE has questionable ethics of their own.

Anonymous said...

https://jrbj.biz/honoree/andrew-jordan

Anonymous said...

“I tell the Ions on my accounting team that I don’t care about assigning blame when something goes wrong – I just care about assigning responsibility for fixing things go­ing forward,” he said. “This fosters an atmo­sphere of creative problem-solving instead of guilt and blame.”

this was pulled from the Joplin Regional Business Journal. You should read it here https://jrbj.biz/honoree/andrew-jordan looks like someone is full of themselves or a crook.

Anonymous said...

Anonymous 3:28....so who entered those values? The head accountant which appears to be this Andrew Jordan guy. In a small company like Innovative, you really think that "statistically" it gets found. Really. That company probably had 3-5 big customers if that, the CFO of the company should have verified the legitimacy of those "assets" if proper accounting practices were followed (which since he is a CPA he should have). If Walmart was one of the reasons MNE bought Innovative and it had significant value. IT SHOULD HAVE BEEN VERIFIED PRIOR TO THE PURCHASE. PERIOD.

In major acquisitions, which this sounds like one especially since tribal funds were used, a 3rd party auditor should have been brought in and if that happened those auditors grill the head accountant. If MNE did that, how did this get past the auditors. The CFO would have to explain to the auditors such questions. So did this Andrew Jordan guy sold the auditors smoke screen on Walmart and other valuable assets that he personally did not verify?

Looking at Andrew Jordan's LinkedIn profile...I wonder if he worked with Grundy in the past with BKD or Schmidt, if he did and approved the books, how long has he been covering the tracks. He should be investigated and his CPA license revoked.

This is a complete showing of incompetency by MNE leadership and IO accounting but it also shows unethical behavior by Grundy. PILR/Blu20/TSI and Grundy businesses should be avoided unless you believe in unethical business and incompetency.

Anonymous said...

In a small company like Innovative, you really think that "statistically" it gets found. Really.

No, that's what happens with 3rd party audits, the auditors should take a statistical sample of things and confirm them, transactions, deposits, inventory, etc.

That company probably had 3-5 big customers if that, the CFO of the company should have verified the legitimacy of those "assets" if proper accounting practices were followed (which since he is a CPA he should have).

That's not one of the normal duties of a CFO, they're not assumed to be working with crooks, for if they believe they are, especially if they're also a CPA, they have a duty to report any fraud they've detected and that'll result in a de facto resignation.

I'm not saying he's clean, just that this is not part of his normal duties, confirming that each big contract that's signed is, in fact, legitimate. Or look at it this way, what CEO would put up with such automatic distrust?

The checks and balances for that are supposed to come from 3rd party auditors, who are getting paid by the company, but at least don't report to the CEO. Or in this case, for an acquisition as you note, whoever is buying them should have their books carefully examined by 3rd party auditors.

Anonymous said...

All that I have to say is that something is up and the whole thing is stinking, somebody is in the kitchen....
https://s18.postimg.org/pt1x630x5/cookingbooks.png

Anonymous said...

It seems weird to me that so many people are blaming the victims here. If the lawsuit is true, then this tribe and it's companies had millions of dollars stolen from them by this Russ guy.

Anonymous said...

@ anonymous 12:47
or maybe the tribe is shuffling money and assets between companies that it has and companies it purchased. It needs a fall guy for dumping one of its companies. You go in, buy a pie, cut out the center, and then return the crust. Somebody told me that the Tribe has closed some sub companies from IO and given other sub companies to other tribe owned companies. That Choice Tech company is now TSI or so their invoice go...

Anonymous said...

Wouldn't be so quick to rule out the chamber. More is coming.

Anonymous said...

Anonymous 12:20

The CFO is the checks and balances on contracts during normal business operations and at year end you have a 3rd party auditor that comes and verifies the accounting. If another executive executes a contract...it is the duty of the CFO to make sure those contracts are valid. What is the point to have a professional accountant if they take everything at face value and just take orders.

I wonder how that $500,000 training was executed as far as money transfer. Did the accounting department just hand a blank check to Grundy or did they wire it. In my opinion, that large sum would be wired. Wonder what the CFO did there?

This Andrew Jordan guy seems that he has failed to question any of the assets or oddities prior to tribal purchase or at least the significant ones that the tribe was interested in. So far everything points to Grundy being shady and the CFO not competent enough verify the paperwork and vendors coming from Grundy on this important "project" especially if the CFO was never introduced to any of the Walmart party(s).

Does anyone find it somewhat odd that the tribe is seeking $24 million? They just settled with the FTC for $21 million that they had to pay for scamming people $400+ million over the years through payday lending. I wonder if this is a scheme to try and recoup the fine through Grundy. https://www.ftc.gov/news-events/press-releases/2015/01/online-payday-lending-companies-pay-21-million-settle-federal

Both sides have severely screwed this business up and I wouldn't trust any of MNE's companies nor Grundy's.

Anonymous said...

Whale that didnt work out. #Blu20

Anonymous said...

I worked there for 30 days and could tell shit was not right and walked out. They didn't know what they were doing at all...

Anonymous said...

Anonymous 12:54

Which company did you work for? Care to share? Just wondering if its either Blu20 or PILR or TSI since they are still in business and under the control of the tribe.

They are supposed to be under impeccable leadership :|

Anonymous said...

9 employees? (According to the Joplin Globe article?

Is that after layoffs? Not counting companies they own?

$50,000 plus the extras for rent for such a tiny company???

Anonymous said...

I blame CJ

Anonymous said...

Andrew Jordan and Mike Cory from Innovative Objects must have come up with this whole plan. They are both sneaky and can't be trusted.

Anonymous said...

Anonymous says: "That Andrew Jordan guy sure is sneaky"
Anonymous says: "I agree"
Anonymous says: "Yeah, let's blame that Andrew Jordan guy"
Anonymous says: "Good point, Anonymous"

...meanwhile, at "Anonymous" headquarters

Anonymous: "How do we make it look like Mr. Grundy didn't defraud a bunch of companies?"
Anonymous: "I know! Let's submit a bunch of stupid comments on a random blog blaming Andrew and photoshop his face on to really stupid pictures!"
Anonymous: "Excellent idea, Anonymous! That's why I pay you the big bucks from my ill gotten gains!"

Anonymous said...

That Andrew Jordan guy can't be trusted!!!! In an unrelated note, please visit this cool website I just found!

grundyenterprises.com