The nationwide free gas voucher program created by a Largo marketing company was a $39 million "fraudulent scheme," according to a lawyer appointed by the state to review the finances of Tidewater Marketing Global Consultants.
Lawyer Charles Stutts said in a lawsuit filed in Pinellas Circuit Court on Friday that Tidewater "fraudulently created and sold millions of worthless coupons for distribution to retailers and consumers."
Stutts' suit seeks to reclaim money spent by Tidewater owner Crystal Clark, general manager James Barnes, computer programmer Michael W. Hunter and affiliated firm Elite Marketing of Tampa.
The lawsuit accuses Clark of concocting the gas voucher scheme, which sold vouchers to brokers and retailers for $2 to $4 to use as incentives for consumers. Retailers then distributed the vouchers free to tens of thousands of consumers after they purchased furniture, tires, cars, electronics and other products.
The voucher was a promise of free gas valued at as much as $500, a compelling inducement when gas prices topped $4 a gallon and as the economy soured.
But instead of fulfilling the vouchers, Stutts says, Clark, Barnes, Hunter and Elite Marketing pocketed the money for themselves, even as obligations and liabilities continued to mount.
"The money obtained by Tidewater through fraud and deceit retains its character as ill-gotten gain, regardless of how or why Tidewater spent it," the lawsuit states. "In addition, Tidewater's owner and president, as well as several of its financial advisers and managers, knew or should have known of Tidewater's fraudulent scheme and abused their positions of confidence to unjustly enrich themselves."
Clark, who is under criminal investigation by state and federal authorities, previously asked not to be contacted any further about the case. Elite Marketing's owner, William S. Kilichowski, did not respond to phone calls requesting comment.
Hunter, the computer programmer, denied any knowledge of Tidewater's scheme. He said he also was not an agent of Elite Marketing, a company he worked for from 2001 to 2003.
"I didn't do it," Hunter said. "I was the computer guy. I had nothing to do with operations of the place at all."
Of the $3.052 million in receipts taken in by Tidewater, Clark transferred more than $1 million to her personal accounts or spent the money on cars, clothes, trips, drugstore purchases, and entertainment for herself and her family.
Almost $700,000 went to Hunter and more than $200,000 went to Barnes, Tidewater's general manager, according to the lawsuit.
Still unaccounted for are the untold millions brokers pocketed. After purchasing the vouchers from Tidewater for as little as $2, brokers resold the vouchers to retailers for as much as $45. Despite the price, "these coupons had no value, as they were nothing more than pieces of paper imprinted with numerical codes generated by Tidewater through a computer program," the lawsuit states.
The scheme left retailers nationwide and in Canada — including Ashley, La-Z-Boy and Bassett furniture stores; defunct Tweeter and Sound Advice electronic stores; Tire Kingdom and its sister company, Big O Tires — saddled with tens of thousands, and in some cases millions, of dollars in debt to consumers.
Ashley Furniture reached a settlement in its class-action suit. A fairness hearing is scheduled for Jan. 29, in the Circuit Court of Cook County in Illinois. Information and a consumer claim form has been posted on Ashley's Web site at www.gasredemption settlement.com.
Tire Kingdom posted a notice from its president about alternatives to the voucher program for its customers at www.tirekingdom.com/tkredemption.aspx. A class action against Big O Tires remains in litigation.
An Ashley Furniture spokeswoman declined to comment Tuesday. Tire Kingdom's spokesman did not immediately return phone calls.
Don Dominguez, a tire incentive broker who first raised concern about the gas voucher program, said he remains troubled by the way the case against Tidewater has unfolded.
"I'm still kind of disappointed in the process, because it's been so slow," Dominguez said. "Even with a civil suit, I have my doubts about any of the plaintiffs being satisfied monetarily."
Times staff writer Rodney Thrash and news researcher Shirl Kennedy contributed to this report. Ivan Penn can be reached at firstname.lastname@example.org or (727) 892-2332. Follow him on Twitter at www.twitter.com/Consumers Edge and become a fan of Consumer's Edge on Facebook.