Three customers of Greenville, S.C.-based freight payment and audit services provider Trendset filed petitions this week against Trendset in federal bankruptcy court.
The customers - Husqvarna Professional Products, Legrand North America, DH Business Services – were among those affected by an embezzlement and fraud case that Trendset Chief Executive Officer Gary Selvaggio described in a letter to customers in late March
The case, Selvaggio wrote, involved a “trusted employee” embezzling funds from the accounts which Trendset uses to collect money from shippers to pay those shippers’ carriers. He also indicated a lack of proper internal controls led to the breach.
In an email this week to customers obtained by American Shipper
, Selvaggio said the company had been hoping to avoid filing for bankruptcy, but that the petitions from the three customers
filed April 15 “forced the issue.”
“Trendset plans to convert this action to a voluntary Chapter 11 bankruptcy,” he wrote. “Trendset plans to continue operating during the bankruptcy period, providing the same services to its customers as it is offering today. Even during this challenging period, we have consistently heard from customers that they value the services we provide and that they are superior to most alternatives in the market. We believe that this represents the core of a viable business in the future. We have already ceased making direct payments ourselves and have arranged with a national bank to provide a payment service which will integrate with our freight bill audit services.
“The bankruptcy will resolve
the very serious issue of the deficiencies in the accounts used by our affected customers and will do so in an open and transparent way. We are preparing a plan of reorganization which we will propose to the court. We will keep you informed of the progress of this process,” he said.
Meanwhile, a local news outlet in South Carolina reported late last week on the identity of the employee, Julie Greene Tucker, 52, of Greer, S.C. Tucker, and her husband James “Dean” Tucker, 54. The pair pled guilty
in November 2012 to two counts of filing false tax returns, while Julie Tucker also pled guilty to wire fraud, according to U.S. Attorney Anne M. Tompkins.
According to court documents, Tucker’s embezzlement lasted around 15 months until she resigned in July 2012. She was sentenced to 33 months in prison and ordered to pay Trendset back more than $590,000, as well as $191,000 in taxes to the IRS. Her husband was sentenced to eight months of house arrest. - Eric Johnson