CHESAPEAKE
A handful of people who loaned $250,000 to Smiling Earth Energy LLC is suing the biodiesel plant developer, accusing the California company of fraud, breach of contract and racketeering.
The federal lawsuit accuses Smiling Earth, which is planning the world's largest biodiesel plant in Chesapeake, of promising "investment returns" on the loans but never giving any of the money back. The plaintiffs are seeking damages of about $2 million.
This is the second lawsuit to be brought to light since the Chesapeake City Council voted 7-2 in October to allow the plant.
"It's been a sad chain of events," said Chesapeake Mayor Dalton Edge, who supported the proposal. "We gave them a chance. We were hopeful, but we haven't given them a dime of taxpayer money."
In an e-mail, Smiling Earth principal Clifford Cowles wrote that "the company does not comment on pending litigation."
The lawsuit was brought on behalf of two Utah residents, Rick Foy and Jenni Braunberger, and a California couple, Dean
and Deborah Lane, according to court documents.
In July, Foy loaned Smiling Earth $50,000 after the company promised him it would repay the loan with an "investment return" of $12,500 by October, according to the lawsuit. Braunberger and the Lanes each loaned the company $100,000, and each were promised returns of $25,000 plus loan repayments.
All were continually promised they would get their money back with the returns, said James D. Ciampa, a Pasadena, Calif., attorney representing the plaintiffs.
"I hope that this can force the defendants to do what it takes to get the funds together to pay off my clients," Ciampa said.
The suit, filed Dec. 13 in U.S. District Court in California, is similar to one filed in September by an Oregon biofuels company. That company, TerraFuels Inc., sai d Smiling Earth refused to return a $100,000 deposit after the firm broke terms of a deal to build a biodiesel plant in Oregon. A judge ruled in November that Smiling Earth owed TerraFuels the money.
One of the plaintiffs in the most recent lawsuit, Foy, said Monday that he once helped Smiling Earth with "ideas and concepts." At one point, Smiling Earth officials listed him as one of the company's top managers, although Foy said that was a mistake.
"They respectfully corrected that," he said.
The lawsuit names Cowles and Smiling Earth principal Bernie Mock as defendants. Both Cowles and Mock visited Chesapeake over the past few months to trumpet the project.
Both have not returned a reporter's phone calls since the council's Oct. 16 approval.
Smiling Earth has promised to buy Chesapeake land for the project for months but had not purchased it as of Monday. Landowner David Peck said he still expects the deal to close within the next few days.
Mike Saewitz (757) 222-5207, mike.saewitz@pilotonline.com
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Throwing Good Money After Bad
I hope the Ches City Council has learned a valuable lesson that warrants researching to the ground any and all potential investors. Not only does it affect Chesapeake, but the entire Greater Hampton Roads area as well. The Ches City Council is responsible to every person that calls Tidewater "home", and with that comes the required ownership of its decisions. I am glad that the BioDiesel plant has failed but more to the point, what reason does the landowner have for still expecting to close a deal that he must realize can come to no good for his neighbors and generations of Virginians to come?
Oh...Duh!
There were hundreds of posts from citizens about this two-bit band of hustlers and how with a little research one could easily see the baloney below their "glittering coat" (which really wasn't all that glittering. City council should immediately vote to rescind their approval of this project so that not more investors are duped out of money.
More here than meets the eye.
It's been a sad chain of events," said Chesapeake Mayor Dalton Edge, who supported the proposal. "We gave them a chance. We were hopeful, but we haven't given them a dime of taxpayer money."
Nobody is that stupid, not even Chesapeake city council. They backed Happy Funball Grinning Earth for some reason, but not the readily identifiable ones.
Now Chesapeake is complicit in their scam. Investors are more easily fooled when a municipality gives the scammers their stamp of approval. That is exactly what city council gave SE Energy. I wonder what they really got in return.
Biodesiel Bribe
As with the previous commentator, I am not at all surprised. This whole deal should be subjected to a fraud investigation. When Smiling Earth promised $7.5 million upon completion of the project, the Chesapeake City Council voteed 7-2 in favor of the project. Would the Council voted in favor of the deal absent the $7.5 million? I doubt it.
Why does this not surprise me?
This company was fostered with Chesapeake tax dollars, courtesy of the Department of Economic Development. Who is the chairperson for this dept. you may ask? Could it be an ex-mayor turned consultant? Voters would like to know!