BUFFALO, N.Y. (RELEASE) - Attorney General Andrew M. Cuomo today announced his office hasobtained a temporary restraining order against a Western New Yorkwood-pellet fuel company he sued for taking more than $200,000 fromconsumers and then failing to deliver any products or refunds.
Based on Cuomo’s lawsuit, Erie County Supreme CourtJustice Sheila A.
DiTullio today signed a temporary restraining order banningAllegany Pellets, LLC and its owners, Paul and Iasia Ceglia ofWellsville, from accepting advance payments from consumers,destroying any business records or property, and transferring anyof their assets.
Allegany Pellets and the Ceglias encouraged consumers topre-order pellets in Spring 2009. The company took in approximately$200,000 in advance payments from dozens of consumers and promisedto deliver 1,900 tons of wood pellets in the subsequent months sothat homeowners would be prepared for the 2009-2010 winter season.However, Allegany failed to deliver any of the pellets or issuerefunds.
“This company and its owners repeatedly lied to consumersand continued to solicit new orders despite an inability to deliverwood pellets that were bought and paid for months before the winterheating season began,” said Attorney General Cuomo. “Myoffice is seeking restitution, penalties, and additional financialsafeguards to ensure this company cannot scam anyone in thefuture.”
The Attorney General’s investigation revealed that inSeptember, Allegany Pellets sent a letter to customers who pre-paidfor pellets informing them that it would not deliver the productsuntil the end of the year, well into the heating season. The letteralso stated that Allegany had incurred significant layoffs andasked consumers to “dig deep” while the companyattempted to make good on their orders.
In reality, Paul and Iasia Ceglia were always the only employeesof the company, and while consumers were asked to “digdeep,” the Ceglias were unwilling to do the same. Aninvestigation uncovered that the Ceglias have extensive real estateholdings including 75 acres of oceanfront property in Nova Scotia;30 acres and 70 rental properties in Wellsville; and their ownresidence on 2 acres in Wellsville. Rather than use some of theextensive properties as collateral to provide refunds to consumers,the Ceglias only offered the vague promise that, at some futuredate, they would deliver the pellets for which the customers hadalready paid.
Additionally, even after the letter detailing thecompany’s dire situation was sent out, Allegany Pelletscontinued to solicit pre-order sales and accept payments fromconsumers.
Cuomo’s lawsuit seeks restitution for the impactedconsumers, as well as penalties and costs to the state.Additionally, the suit seeks to bar the Ceglias and Allegany fromoperating in New York state unless they post a $200,000 performancebond.
The case is being handled by Assistant Attorney General JamesMorrissey under the supervision of Assistant AttorneyGeneral-In-Charge of the Buffalo Regional Office Russell Ippolitoand Deputy Attorney General for Regional Affairs J. DavidSampson.
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