For six months Edward Louis Molz III, under the name Frank Sullivan, scammed 247 small business owners in an advance-fee scam under a phony corporation called 3rd Street Financial LLC.
According to the Criminal Complaint and Affidavit of Special Agent Deen Abbott filed, the Dallas Division of the FBI received complaints from 44 victims between a time span of 13 days in May of 2010. Molz promised large lines of credit for “aged” corporations he had claimed to establish and maintain. He promised that the process would return high lines of credit (up to $400,000) and the building up of credit scores of the corporate entities.
In this scam, two different “Tiers” of corporations were offered that clients could buy. For $3,250 a “Tier 1″ corporation could be acquired with minimum lines of credit between $150,000 – $250,000. “Tier 2″ offered between a $250,000 – $400,000 line of credit for $6,500. Molz claimed that in 9 to 12 weeks clients would start to see the benefits of their purchase. When in actuality not one client saw any benefit from this. Source
Screen Shots from Molz’ website claimed the following (notes from Special Agent Deen Abbott)
A) “This program is limited! Call to reserve your aged corporation.” – There is no indication that the program was limited in anyway, and Molz told clients that anyone could get approved.
B) “We build a strong business credit profile on one of our 4-5 year aged corporations that our company formed years ago.” – The investigation has not revealed the existence of any corporate entities formed, owned or controlled by Molz.
C) We are having a 99.9% success rate right now even in these crazy economic times.” – Investigators have been unable to locate any successful business operations, and financial analysis has revealed no legitimate business activity in Molz controlled accounts. Source
As of September 3, 2010, Molz had been arrested by the FBI on four counts of wire fraud and two counts of mail fraud; with the total client deposits identified were $1,005,040.03. On January 23, 2011 he pleaded guilty to one of these counts.
If Molz wasn’t using the money as promised what was he doing with it? Spending it on himself of course! The Complaint outlined that:
Molz made cash withdrawals of $219,992.10, entertainment expenses of $58,536.58, automobile expenses of $54,432.44, personal expenses of $48,415.78, plastic surgery of $25,575.00, travel of $18,680.92, and meals of $9,753.75. Molz paid commissions to outside brokers of $118,450.00.
Molz used $353,541.31 to purchase various assets. Included in this amount are $18,530.00 for a 40 foot Silverton boat, $9,833.38 for a 2007 Chevrolet Corvette, $65,339.91 for a house in Irving, Texas, $26,364.00 for a 2007 BMW 650, $33,855.03 for a 2005 Maserati, $162,647.01 for a 2007 Lamborghini Murcielago, and $32, 971.98 for miscellaneous furniture, jewelry and electronics. Source
According to the Complaint and Affidavit one client, while meeting with “Frank Sullivan” questioned the name Edward Molz. The complaint states, “through research of public records discovered that 3rd Street Fiancial was actually owned by Edward Molz III. At the meeting Frank Sullivan continued to identify himself as such, and was questioned about the name Edward Molz. Frank Sullivan claimed that Edward Molz was a wealthy individual who guaranteed all of the bank lines of credit and was a silent partner.” Source
Molz left behind a long paper trail and there seem to be a lot of eager victims offering up information and the false documentation and contracts provided by Molz. According to multiple forums and personal website these victims have deemed Molz the name “FrankEdstein” and are irate with the entire situation, including one avid “FrankEdstein” fighter posting Molz’ photograph around the internet after snapping a shot when he met with “Frank Sullivan” face to face.
Sentencing is planned for April 18, 2011. Molz now faces up to 20 years in prison and a $250,000 fine. It’s a shame that “Tier 2” corporation doesn’t actually exist, maybe Molz could have invested $6,500 to cover that fine.Advanced Fee Loan and Credit Repair Scam Mastermind - Arrested by FBI. by Amanda Miller