Collins Accused of Investor “Rip Off”
by Alan Bedenko (@BuffaloPundit) - posted 7:30 am, June 4, 2012
A website that recently appeared online accuses former Erie County Executive and current NY-27 Republican congressional candidate Chris Collins of “ripping off” a group of local Buffalo investors for his own gain. More shockingly, it alleges that, when the investors asked to meet with Collins about the matter, he insisted on doing so only in his then-office on the 16th floor of the Rath Building; discussing a private business matter on public property. No one has taken responsibility for the website.
“CollinsRipoff” explains that a former neighbor of Collins’, Richard Conway, invented the “Balance Buddy”, a device that helps parents teach their kids to ride a bike without training wheels. Conway sought investment from several prominent businessmen in WNY, but when orders increased he needed a quick infusion of cash to pay the Chinese factories to ramp up production. Conway’s company was called Jiri, Inc., and state records reveal it was dissolved in early 2010.
The “ripoff” website alleges that, when the investors balked at ponying up more cash, Conway turned to Collins for help. But instead of joining Jiri as a new investor, Collins chose instead chose to buy the “Balance Buddy” patent outright, and wrap it into a company he already owned called “Ingenious Products” (warning: obnoxious music). In so doing, Collins paid off a secured lien Jiri owed to former Buffalo Bill Kurt Schulz, and pay the needed advance to the factory in China. As a result of the way in which the 2008 deal was made, Jiri lost its only asset, and the remaining investors were stiffed completely out of an estimated $1 million. Why?
Chris Collins never speaks of Ingenious Products on the campaign trail, never holds it out as a shining example of his corporate acumen. That’s probably because the company isn’t doing well. According to court filings, today it is worthless.
In fact, Ingenious Products was in dire need of at least one ingenious product. More important, Ingenious Products was pining for huge big box retailers to sell their mélange of middling geegaws. So, instead of simply joining the group of investors already in for $1 million, Collins had a better idea: he would buy Balance Buddy outright and fold it into Ingenious Products. Why not? Balance Buddy had supplier numbers at Dick’s, Sears and the Mecca for Chinese products, Walmart. Collins hadn’t been able to get the time of day at these mega-retailers for his ingenious hair bands. But with Balance Buddy’s previous relationship he might be able to fold in an order or two of yoga mats with the bike bolt on.
Ingenious Products then hired Conway for $5,500 per month, but he declared personal bankruptcy in 2009, listing just under $3,000 in assets and close to $950,000 in liabilities, including his Spaulding Lake association fees and all the money owed to the remaining investors in the Balance Buddy.
We’ve heard countless times about what a savvy businessman Collins is, but if the allegations in that website are true (and they appear to be backed up by authentic court filings and other documents), he seems also to be a somewhat ruthless one, as well. None of that, of course, is criminal or anything. However, if the story about Collins insisting on meeting with the Jiri investors at the Rath Building is true (naturally, no one would comment on this or confirm it), that poses some serious questions about Collins’ use of the Rath Building to handle personal business and blatantly intimidate them. It may be illegal, to boot.
Running government like a business – does that mean cheating people, underhanded dealings, intimidation through power and privilege, and hawking Chinese-built tchotchkes?
Collins ought to give some answers about Ingenious Products and the Balance Buddy while on the campaign trail throughout NY-27. If Collins will treat prominent Buffalo families – who invested in an invention in good faith – with dismissiveness and intimidation, how is he going to represent constituents and average people?
Incidentally, the Collins campaign has been busy trying to please various subsets of the NY-27 population (farmers, small businessmen), but nary a word about service and the reasons why he wants to representan economically diverse population in a multigenerationally depressed area.