Alaska’s state Alaska has gotten involved in more than dozen civil lawsuits that allege “widespread fraudulent practices” by the proprietor of an ATM business that services Alaska Native villages, village companies as well as other small-scale businesses.
In the lawsuit filed on Wednesday at Anchorage Superior Court, the state accuses a man whose name is James Dainis of fraud, civil conspiracy, and of violating the laws protecting consumers in the state by stealing money belonging to ATM owners.
The suit seeks an arbitrator to order Dainis to repay the amount due to owners, and to impose fines for financial violations, and to give an order preventing any further similar actions.
Dainis manages a number of ATM-servicing firms which include Alaska ATM Service and Societe Financial LLC which are also mentioned in the case.
“This tragic incident highlights the enormous amount of damage that a shady person within the financial sector could result in,” said Attorney General Treg Taylor in a letter in the announcement of the lawsuit. “The Department of Law is determined to bring bad actors to justice, however we also urge small-scale enterprises to be aware of the people they do business with and to audit regularly their financial statements.”
On the phone, Dainis said he wasn’t aware of the lawsuit until he was notified of it by the Beacon and added that every one of the claims by the state are false.
“We’ve been doing this from 2006 onwards,” he said. “It’s not a scam.”
There have been issues with processing companies that are third party Some companies were not paid He said, however, in all cases the past, he’s said he’s been working to improve the situation.
“Given our long-standing presence around for a considerable amount of time and that we serve an array of clients throughout the state this isn’t fair and it’s not a good idea to portray this as a kind of scam. There is a problem with a small number of customers but that doesn’t reflect our overall business,” he said.
The government is also accusing Dainis of stealing money from partners were able to sell business interests. In one instance Dainis was accused of selling contract rights to 307 ATMs. These rights were not valid as per the state’s claim that, and he was then unable to perform the transaction.
In relation to these allegations, Dainis said he’s already resolved one case that was which was mentioned by the state and in other cases COVID-19-related cases, the consequent economic decline impacted his earnings in the same way as it affected other companies across and in United States.
He hopes that the court system will help resolve the issues, he added.
The state also claims Dainis utilized two firms outside of the state to serve as “shell corporations” to conceal funds from lenders.
Untrue, Dainis said. They’re actually a single company that hold holding companies that own a piece of land.
“There’s nothing like office building, multi-houses or condominiums or anything similar to that,” he said.
In many rural areas of Alaska in Alaska, in many areas, an ATM can be the sole bank accessible, and the state’s complaint focuses on ATM issues at the root of the problem.
The court documents submitted by the state and other plaintiffs detail what they believe to be the reason for believing that the fraud took place.
A typical store has the ATM within its premises It will then store the ATM with money. A third-party processor will record every transaction and is responsible of deducting funds from the customer’s account and transferring money to the ATM owners account.
In the lawsuit filed by the state, Dainis would sell ATMs to small businesses, which includes rural shops, and act as intermediary. The payments from a third-party processor would be transferred into accounts he controlled and he would then transfer the cash into the ATM owner’s account.
Based on the information provided by the state, and over a dozen lawsuits, it didn’t happen every time. occur.
The Aleut Community of St. Paul Island stated on the month of July it was “the defendants’ past and their practice of engaging in deceitful or predatory practices in relation to businesses operating in remote Alaska is evident in the court documents from similar legal proceedings against defendants.”
A lawsuit filed in 2017 by Qemirtalek Coast Corporation of Kongiganak in Southwest Alaska is similar to several of these cases.
According to lawyers of QCC, “at least $80,000 which the Alaska ATM should have deposited into QCC’s bank account … was not deposited from QCC’s account in the bank,” and the issues were not identified until the last year.
QCC attempted to obtain its money back, as well as an accurate account of the issues however, when Dainis was unable to resolve the issue with the company’s requirements and it filed a lawsuit.
In the year 2019, QCC claimed that Dainis’ behavior “is shocking, committed with malice and motives, willful, and wanton, (and) in reckless disregard of QCC’s rights.” QCC.”
In November last year after nearly five years ‘ worth of litigation it obtained a judgement that was close to $100,000. It was against one Dainis company.
Since then, court documents show that QCC hasn’t managed to get the money since the beginning of this month. Earlier in the month an official from the state issued an order of show-cause that required Dainis to explain the reason Dainis hasn’t followed through with the order.
“Hopefully this will be resolved in the next few weeks,” Dainis said. “That is something we’ll to settle in full amount. The merchant isn’t losing money and we’re not asking them pay less than what they were due. We’re settling the issue and they’re getting a refund for what they had done.”
A number of other cases are still not resolved in court. the state is of the opinion that other small businesses might have encountered similar issues without their knowledge.
In addition to filing a lawsuit, the Alaska Department of Law is asking any ATM owners who believe they may have been defrauded by Dainis to send an email to consumerprotection@alaska.gov or to call (907) 269-5200.
This article first appeared in Alaska Beacon and is republished here with permission.
