Complaint Review: Quaker State Commercial Finance Leonard J. Keating Jr. and Harold Krakowitz

QSCF was engaged by Sagamore Equities, LLC on February 19, 2020 to obtain a $5,625,000.00 loan to purchase the Sagamore Square Mall in Sagamore, Ohio. Sagamore Equities, LLC bound the contract with a non-refundable due diligence deposit to process the loan and fund all expenses paid by QSCF on behalf of the borrower. QSCF had identified and prequalified a proven direct lender to the borrower prior to the borrower engaging QSCF, and QSCF specifically represented that it was not a direct lender (funder) for this transaction.

We (QSCF) find this complaint to be not only totally inaccurate, but outrageous for the following reasons:

First, the person (Sailor) who claims to be the complainant had no direct contractual relationship to our company. Originally, he allegedly was represented to be the property manager for Sagamore Square, but was not a party to the contract between Quaker State and our borrower. 

Based on the fact that Sailor (the complainant) was so quick to file a Rip Off Report in order to have a public forum to unjustly complain about the services we were providing so our client could achieve their objective to purchase the center, we did some in-depth research on the complainer (Sailor).

1. We learned that he is well known in California and Alaska for unjustly bringing lawsuits and complaints publicly, to the point that one court called him a vexatious litigant and prevented him from filing any new litigation or cross complaints in the courts of CA.

1. Also, when investigating the ownership of the companies selling and purchasing the shopping center, QSCF found that not only was the complainant representing the seller of the property but also a silent partner of the buyer of the Center (our Client). Thus, we have concluded that the transaction was misrepresented from the start and is a “Structured Transaction” designed to pump up the value of the property and fraudulently induce a lender to make a loan to Sailor since no conventional lender would make a loan to a felon convicted of bank fraud.

Therefore, Sailor has continued his practice as a serial “Con Man” and Scammer. 

1. In addition, the loan broker who brought the loan request to QSCF has a history with the complainant of being involved in several other bogus transactions and unsuccessful lawsuits.

Therefore, the loan broker is also a serial Con Man and Scammer.

1. Finally, there is public record that Sailor was convicted of making false statements to induce a federally insured commercial bank to make a bogus loan to him. Sailor was subsequently found guilty on three counts of Bank Fraud, sentenced to two years on each count and was incarcerated at the Federal Penitentiary at Milan, Michigan.

Not only is Sailor a serial “Con Man” and Scammer, but a convicted Felon and ex convict.

Let the record state that Quaker State Commercial Finance, Leonard J. Keating, Jr and Harold A. Krakovitz are the victims of an attempted scam perpetrated by Sailor and his Broker Co-Conspirator.

Here is the timeline and progress summary and facts:

On February 6, 2020 QSCF, Inc. received a loan request from a broker (one who had never contacted QSCF before) for the purchase of Sagamore Square Mall in Sagamore Hills, OH.

We reviewed the loan with one of our Investors, received terms and conditions and discussed them with our referring broker before issuing an LOI on February 12, 2020.  As part of the negotiation procedure with the broker we agreed to divulge the identity of the Investor upon engagement.  At no time did we claim to be a lender in this transaction and subsequently disclosed the name of the Lender. The borrower acknowledged that our Lender is in fact a recognized “Direct Lender” and provided the required due diligence deposit.

The alleged borrower signed the LOI on February 18, 2020; subsequently paid the deposit and on February 20, 2020 received a checklist of information needed. It took the borrower until March the 16th to return these checklist items to our firm.

On March 16, 2020 QSCF immediately sent the package to our Investor, and then received a positive response from the Investor. Subsequently, we received a request from the Investor for the Mall’s January and February Profit and Loss Statements along with sales figures from the Shopping Center’s anchor Supermarket.

On March 17, 2020 QSCF received the requested information from our referring broker and forwarded it to our Investor.

On March 23, 2020, the state of Ohio instituted a “Stay at Home” order and closed all non-essential businesses; and our initial Investor rejected the loan due to the gravity of the Covid 19 pandemic and its’ effect on the retail industry .

On March 25, 2020 we informed the referring broker about this Investor’s decision, but that we were in contact with another QSCF Investor who was also interested in the transaction.  A package was immediately sent to the Investor and the Investor responded with additional questions.  By the time we were able to respond with the information they requested, that Investor also made a corporate decision to stop lending in the retail marketplace.

On April 3, 2020 another Investor we contacted was interested in the proposed loan and requested to see that all the lessor’s tenants had paid their rent for April.  On April 8, 2020 the broker emailed that all but one tenant paid April’s rent when in fact, based on a report we finally received on April 16, 2020, four lessors, or about 20% of the mall’s square footage, had not paid any of April’s rent. This Investor then rejected the loan as the percentage of tenants paying rent no longer qualified the center for this financing as per the Lender’s stated guidelines, as well as the declining sales and financial strength of the anchor store. 

QSCF then continued to pursue other Direct Lenders; but as you can see from the facts, QSCF, Inc. completed its fiduciary duties and it was the borrower’s misrepresentations and the economic meltdown due to Covid-19  that kept this loan from not proceeding to closing.