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Franchisees David Villano III and his father David Villano, Jr. are accusing Matco Tools, with accomplice TD Bank, of devising a secret scheme that allowed the franchisor to sell franchises through fraudulent small business loans.
A lawsuit filed yesterday in New Jersey federal court claims Matco Tools doled out inflated annual performance projections to Commerce Bank, acquired by TD four years ago. A New York Post article explains the tactics they used,
Matco’s upper management . . . devised a scheme to secretly make income projections to TD and other SBA lenders that would only be disclosed to the SBA lender, in order to satisfy the bank’s lending criteria.
The reporter says that the bank turned a blind eye to the inflated projections. The loan scheme allegedly was in operation over a four-year period, dating back to 2003.
|Final COMPLAINT 11-14-11.pdf||1.52 MB|