Alanna Steinberg

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Alanna Steinberg accused of running Internet funding scam

Alanna Steinberg, a wheeler-dealer who boasts a network of “angel investors,” sat at Wendy’s restaurant expecting the $5,000 she demanded up front from her latest mark.

What she received instead were subpoenas from two former clients who for two years have tried to recover money they say she scammed from them.

Steinberg, sitting at the fast food restaurant near Toronto airport, was stunned when she realized she had walked into a sting orchestrated by a paralegal and a process server working for her alleged victims.

She erupted into a flurry of profanities when the Star witnessed the sting and confronted her with a list of lawsuits and Internet postings from former clients who accuse her of running financing scams on the Internet.

The Star has found Steinberg has left a trail of victims across North America, who fell for ads for unsecured loans and other financial schemes on Internet sites such as Craigslist and Kijiji.

Steinberg offers to connect people seeking financing with what she described as an extensive network of private money lenders, also known as angel investors. Some of the victims say the loans never materialized and Steinberg made off with the advance fees they paid her.

Lawsuits filed against Steinberg in small claims courts in the GTA show that those who pursue her almost always win, because she rarely shows up to defend. Collecting on the judgments is another matter.

“You want me to break your face?” Steinberg screamed as she bolted from the fast food restaurant and hurried to her nearby white Lexus sedan. “Nothing happened to any of these cases. Let’s see what you have on me — absolutely zero . . .

“Watch what I’m going to do to you. Just watch.”

There are four judgments registered against her at the Sheppard Ave. small claims courthouse in Toronto alone. The clients were awarded their original fees, plus costs. In a fifth case, the complainant was awarded judgment of about $7,000, but the case was later dismissed when he failed to show for an assessment hearing to enforce payment.

In an email to the Star, Steinberg says the cases “have no merit whatsoever, and the last case was thrown out.”

Her exploits over the last four years have landed her on such Internet consumer snitch sites as RipoffReport, ScamAlert and ScamInformer.

Google her name and you will get postings by Steinberg, saying she’s 33, attended George Brown College, lives in Toronto and is a self-employed finance broker “providing funding solutions for entrepreneurs, businesses and real estate investors.”

But you will also get a number of postings by alleged victims warning potential clients to give the “Toronto Scammer” a wide pass. One calls her a “a true wolf in sheep’s clothing.”

Those who have met her say she is smart and very professional as she peddles a smorgasbord of financial solutions: from the sale of “shelf corporations,” credit cards with high limits and ways to boost credit ratings.

Can’t borrow because of a bad credit rating?

No problem.

The people she deals with don’t do credit checks, she says in an email to a potential client.

She also claims to have someone who can get into credit reporting agencies and massage the scores, so you go from being a high risk to someone lenders will be eager to loan money to.

Her latest ads on the Internet troll for buyers of gold bars, gold bullion and even gold dust.

The Star has spoken to 10 victims across North America, from a health food supplier in Montreal to a family counsellor in Arkansas with a PhD in theology and family counselling. All fell for Steinberg’s pitch that she could get them financing for various business ventures.

None got funding. None got the refunds of the advance fees she promised if the funding fell through. Some who pressed were met with a litany of excuses as to why it didn’t happen; the excuses ranged from illness in the family, busy international travel to betrayal by her partners.

Then she fades back into cyberspace and disappears. Calls and emails go unanswered.

Steinberg has no office, preferring to do business in Starbucks coffee shops, especially the locations at Yonge and Eglinton and in Leaside. Her fax line rings in Seattle. She tweets and, according to her Twitter account, has 51 followers.

No one has an accurate figure of how many victims there are.

One of Steinberg’s money-making schemes is the sale of “shelf corporations” that can get you credit. Also known as “aged corporations,” these companies are literally put on a shelf and left to age, then sold to individuals who use them to raise capital for various ventures.

Steinberg always demands an upfront fee of between $2,000 and $10,000. A back-end fee, sometimes as high as 20 per cent of the eventual loan, is due when the money starts flowing. Under the Consumer Protection Act, charging an upfront fee for loan brokering or credit repair services is illegal.

According to some of the victims, the money never arrives.

“Beware, beware beware,” D’Anthony Latti posts on RipoffReport.com, claiming Steinberg has damaged his Miami-based Yashua Financial Inc. by claiming she worked for him. “We are neither associated with Alanna Steinberg, nor does she work for us, nor we do we work with her, nor are we partners in any form with her. We have been notified by many of our clients that she has been scamming people and then disappearing.”

Latti claims to have lost between $100,000 and $200,000 after clients pulled out of deals because of an Internet posting linking Steinberg and him. He now heads a group of people “all trying to catch Alanna,” he said.

A Montreal businessman, who doesn’t want to be named because he’s embarrassed, paid Steinberg $1,800 to “repair” his wife’s poor credit rating. He demanded his money back once he realized that what she proposed was clearly illegal.

“My guy is able to remove anything negative from (credit) bureaus and it is permanent,” Steinberg wrote in a March 24, 2010, email. “If you live in Canada I need you to get a US based postal address for mail forwarding purposes. He charges $1,800.”

“If at any time you try to pay off debts after he has cleaned, it will mess up what he has cleaned,” she warns in the email. Smelling a scam, the businessman backed out of the deal and demanded his money back.

When he threatened to go to the RCMP with allegations of fraud, Steinberg challenged him to go right ahead. “I actually work with the FBI to bring fraudulent loan scammers to justice,” she said in an email.

So he sued, got judgment for the $1,800 plus costs, but has been unable to collect a penny.

Laurelle Maharaj and Viraj Balendran may be the only ones to have gotten any money back from Steinberg. The couple sued and got judgment plus costs after paying Steinberg $3,500 for a shelf corporation that was to come with $100,000 in loans.

“You both make me laugh at your uneducated, lack of business industry knowledge,” Steinberg wrote to the couple after they accused her of running a scam. Determined to get their money back, the newlyweds became amateur detectives, tracing phone numbers and doing stakeouts that eventually led them to Steinberg’s townhouse in the Eglinton and Laird area, where they served her with court papers.

In court, Steinberg agreed she had not delivered, blaming a partner for the mishap. She agreed to pay $300 a month, but stopped after $1,200. The couple went back to court and got an order to garnish her bank accounts, managing to squeeze another $2,600 from Steinberg before that tap went dry.

Bank of Montreal advised the court there were no funds in her two accounts. The CIBC said it found $21 and sent that to the court.

Antonio Barbieri has given up trying to collect the $9,300 Steinberg charged him to acquire a shelf corporation with a built-in $6 million business line of credit. Steinberg was so professional and convincing that Barbieri recommended a close friend to her. She, too, lost $5,000 to Steinberg in a financing deal.

The hard road to collect damages forces a lot of victims to abandon the effort, says Peter Hughes, a licensed paralegal who recently obtained judgments for two clients, and for whom he set up the sting on Steinberg.

“That’s the real flaw in the small claims court system,” said Hughes of a system that put the onus on the victims to try and collect what they are owed. “That’s why we went to these lengths to get Ms. Steinberg to meet us.”

So he had “skip tracer” Dale Ferdinand create Lisa Hunt, a 49-year-old entrepreneur from Moncton, N.B., seeking $150,000 to finance a pop can recycling venture. Steinberg immediately demanded a $5,000 payment to be Hunt’s “designated broker.” She said the fee is fully refundable if financing didn’t materialize in nine months.

The five grand would get Hunt a password to access a network of 20,000 angel investors. The contract Steinberg handed her warned that circulating the list of those investors on the Internet is a serious offence that would make Hunt “subject to the necessary repercussions by law.”

After the sting at Wendy’s, Lisa Hunt (not her real name) went back to her day job as an apprentice process server. Steinberg was last seen driving towards Toronto, one hand on the wheel of the Lexus, the other flipping the bird with her middle finger.

Steinberg is due in court March 14 for an examination of her finances.

Dale Brazao can be reached at [email protected] or 416-869-4433.

Source: http://www.thestar.com/news/article/…t-funding-scam

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