Paul Ceglia, the upstate New York man who claims he owns 84% of Facebook, was sued last year by New York State Attorney General Andrew Cuomo.Ceglia’s company, Allegany Pellets, allegedly took $200,000-worth of pre-orders for wood pellets and then failed to deliver them.
Perhaps it was after this lawsuit was filed that Ceglia remembered he owned 84% of Facebook.
Allegany’s web site says the company is no longer taking new orders.
Here’s Cuomo’s release:
BUFFALO, N.Y. (RELEASE) – Attorney General Andrew M. Cuomo today announced his office has obtained a temporary restraining order against a Western New York wood-pellet fuel company he sued for taking more than $200,000 from consumers and then failing to deliver any products or refunds.
Based on Cuomo’s lawsuit, Erie County Supreme Court Justice Sheila A.
DiTullio today signed a temporary restraining order banning Allegany Pellets, LLC and its owners, Paul and Iasia Ceglia of Wellsville, from accepting advance payments from consumers, destroying any business records or property, and transferring any of their assets.
Allegany Pellets and the Ceglias encouraged consumers to pre-order pellets in Spring 2009. The company took in approximately $200,000 in advance payments from dozens of consumers and promised to deliver 1,900 tons of wood pellets in the subsequent months so that homeowners would be prepared for the 2009-2010 winter season. However, Allegany failed to deliver any of the pellets or issue refunds.
“This company and its owners repeatedly lied to consumers and continued to solicit new orders despite an inability to deliver wood pellets that were bought and paid for months before the winter heating season began,” said Attorney General Cuomo. “My office is seeking restitution, penalties, and additional financial safeguards to ensure this company cannot scam anyone in the future.”
The Attorney General’s investigation revealed that in September, Allegany Pellets sent a letter to customers who pre-paid for pellets informing them that it would not deliver the products until the end of the year, well into the heating season. The letter also stated that Allegany had incurred significant layoffs and asked consumers to “dig deep” while the company attempted to make good on their orders.
In reality, Paul and Iasia Ceglia were always the only employees of the company, and while consumers were asked to “dig deep,” the Ceglias were unwilling to do the same. An investigation uncovered that the Ceglias have extensive real estate holdings including 75 acres of oceanfront property in Nova Scotia; 30 acres and 70 rental properties in Wellsville; and their own residence on 2 acres in Wellsville. Rather than use some of the extensive properties as collateral to provide refunds to consumers, the Ceglias only offered the vague promise that, at some future date, they would deliver the pellets for which the customers had already paid.
Additionally, even after the letter detailing the company’s dire situation was sent out, Allegany Pellets continued to solicit pre-order sales and accept payments from consumers.
Cuomo’s lawsuit seeks restitution for the impacted consumers, as well as penalties and costs to the state. Additionally, the suit seeks to bar the Ceglias and Allegany from operating in New York state unless they post a $200,000 performance bond.
The case is being handled by Assistant Attorney General James Morrissey under the supervision of Assistant Attorney General-In-Charge of the Buffalo Regional Office Russell Ippolito and Deputy Attorney General for Regional Affairs J. David Sampson.