A Southern Tier company is in trouble with the state Attorney General for allegedly taking more than $200,000 from consumers and then failing to deliver any products or refunds.
Attorney General Andrew Cuomo said his office has obtained a temporary restraining order against Allegany Pellets LLC and its owners, Paul and Iasia Ceglia of Wellsville.
Erie County Supreme Court Justice Hon. Sheila DiTullio Tuesday signed a temporary restraining order barring the owners from accepting advance payments from consumers, destroying any business records or property, and transferring any of their assets.
Investigators found that Allegany Pellets and the Ceglias encouraged consumers to pre-order pellets last spring, bringing in approximately $200,000 in advance payments from dozens of consumers. The company had promised to deliver 1,900 tons of wood pellets in the subsequent months so that homeowners would be prepared for the 2009-10 winter season. However, Allegany failed to deliver any of the pellets or issue refunds.
Then, in September, Allegany Pellets sent a letter to customers who pre-paid for pellets, informing them that it would not deliver the products until the end of the year. The letter also stated that Allegany had incurred significant layoffs and asked consumers to “dig deep” while the company attempted to make good on their orders.
The AG said Paul and Iasia Ceglia were always the only employees of the company, and that the Ceglias have extensive real estate holdings, including 75 acres of oceanfront property in Nova Scotia; 30 acres and 70 rental properties in Wellsville; and their own residence on two acres in Wellsville. Rather than use some of the extensive properties as collateral to provide refunds to consumers, the Ceglias only offered the vague promise that, at some future date, they would deliver the pellets for which the customers had already paid.
Even after the letter detailing the company’s dire situation was sent out, Allegany Pellets continued to solicit pre-order sales and accept payments from consumers.
The lawsuit seeks restitution for customers, as well as penalties and costs to the state and seeks to bar the Ceglias and Allegany Pellets from operating in New York state unless they post a $200,000 performance bond.