NationsBank sues Inphomation, owner Psychic Friends Network director accused of fraud

Legal affairs BTC

March 10, 1998|By William Patalon III | William Patalon III,SUN STAFF

NationsBank N.A. has alleged fraud in a lawsuit it has filed seeking millions from the now-bankrupt Inphomation Communications Inc. and its owner, Michael W. Lasky.

The Pikesville-based Inphomation Communications, better known as operator of the Psychic Friends Network, filed for federal bankruptcy protection Feb. 2, claiming assets of $1.2 million and liabilities of $26 million. Last month, citing evidence of "concealment, dishonesty and less than full disclosure," a federal bankruptcy judge ordered that an outside trustee be installed to replace the company's present management.

After hearing evidence of a clandestine shell company creditors claim was being positioned to strip Inphomation of assets and business, the bankruptcy judge said "in some cases, I think I've heard evidence of criminal activity."

The separate NationsBank civil suit was filed in Baltimore City Circuit Court in January and was amended at the end of February.

Lawyers for NationsBank did not return telephone calls seeking comment yesterday. Neither did Lasky's personal attorney, Robert B. Schulman. James Olson, Inphomation Communications' bankruptcy lawyer, and Paul Michael Sweeney, the independent trustee installed by the U.S. Bankruptcy Court, could not be reached for comment late yesterday.

According to court papers filed by the bank, NationsBank alleges that Lasky and his wife, Kelly D. Lasky, both of Laurelford Court in Hunt Valley, fraudulently pledged anticipated income tax refunds totaling $3.2 million as collateral for a $1.5 million personal loan Lasky hoped to get from the bank. The tax money also was meant to further secure loans NationsBank already had made to Inphomation, which at its peak had annual sales approaching $140 million.

Documents say that in late March 1997, NationsBank and Inphomation restructured some existing loans the company had with the bank, including one for $157,000, another for $66,000 and a credit line of $5 million.

NationsBank alleges that Inphomation failed to make payments on the $5 million for September, October, November and December 1997 -- constituting a "default" on all three loans. Under the terms of the loan, that allegedly gave the bank the right to demand full payment on all three loans and to have a judgment entered against Lasky without having to first hold a hearing. As of Jan. 9, Inphomation owed the bank $6.18 million under the three agreements.

Before that time, however, in late June or early July 1997, the bank says that Lasky approached it about a personal loan of $1.5 million. NationsBank agreed to make the loan -- provided that Lasky provide collateral for the loan that exceeded the amount he wanted to borrow. That way, the bank reasoned, some of the Inphomation obligations would be covered under the agreement, too, the court papers say.

During the negotiations, court records say, Lasky allegedly said that he and his wife were expecting income tax returns exceeding $3.2 million, and agreed to pledge that anticipated money as collateral for both the $1.5 million loan and the three Inphomation obligations.

A memorandum from Lasky's certified public accountant allegedly attested to the tax refunds expected within two months, and played a role in the bank's decision to make the personal loan.

Since the bank felt there was sufficient collateral -- and since it was inking a deal that appeared to guarantee at least a partial repayment of the obligations incurred by Inphomation -- NationsBank made the loan last summer.

As of August 15, 1997, when the personal loan matured, NationsBank said it received no money from the Laskys. In September, it discovered through the Internal Revenue Service that three checks had been issued to the Laskys: A July 25 check for $2,075,732 from the 1994 tax year; an Aug. 8 check for $556,404.30 for a refund from the 1996 year and a check dated Aug. 15 for $6,155.25 also from the 1994 tax year.

On Sept. 11, a representative of the bank telephoned Naresh Mirchandani, Inphomation's comptroller, to inform the company that the refunds had been made to the Lasky's and not to the bank, in violation of the loan agreement, court papers say. Mirchandani said he had the $556,404.30 check and would forward it to the bank right away.

When asked about the other two checks, Mirchandani allegedly placed the bank representative on hold for a time and returned to say that "the money has been spent," according to the account in the lawsuit.

In late September, the bank said it did get two checks from Lasky: the federal check exceeding $556,000 and a state refund check of $115,370. But it has received no money from the other checks.

The bank now seeks $2,563,754.25 from the Laskys as compensatory damages -- as well as interest and legal fees -- and from Michael Lasky alone is seeking punitive damages of $5 million.

Pub Date: 3/10/98

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