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Michigan Attorney General Files Lawsuit Against Alleged Company Fraudsters

FERNDALE, Mich. – In a significant legal development, Michigan Attorney General Dana Nessel has initiated a lawsuit against two individuals, Eric and Daniel Vander Ley, who are accused of establishing a series of counterfeit companies to engage in harassment and intimidation of small business owners in Ferndale. This troubling activity appears to be part of a broader scheme designed to extort financial compensation from these business owners.

Details of the Lawsuit

The lawsuit was made public on July 9 but was officially lodged with the Wayne County Circuit Court on June 12. The legal action accuses the Vander Ley brothers of creating 17 fraudulent LLCs that bear the exact names of reputable businesses operating in Ferndale.

According to the lawsuit, “Defendants Eric and Daniel Vander Ley formed these clone companies to capture the business names and harass the business owners to obtain money.” The implications of their actions have been severe, resulting in significant damage to the integrity and operations of these small enterprises. The Attorney General’s office is seeking to have all 17 fraudulent businesses dissolved, ensuring they can no longer be used for such unscrupulous purposes.

Exploiting Vulnerabilities in Business Practices

The lawsuit indicates that the Vander Leys exploited companies that were either operating under different names than those publicly registered or were not in good standing with the Michigan Department of Licensing and Regulatory Affairs (LARA). This manipulation allowed them to falsely accuse the legitimate business owners of “copyright violations” and other baseless legal claims, thereby setting the stage for harassment.

The allegations detail that the brothers would harass these small businesses, coercing them to pay money to reclaim their names. Their intimidation tactics have raised serious concerns, especially among local business communities that have already faced significant challenges due to external economic conditions.

Initial Target: Downtown Ferndale Bike Shop

The troubling campaign reportedly began with the Downtown Ferndale Bike Shop, located at the corner of 9 Mile and Woodward since 2010. Shop owner Jon Hughes found himself entangled in this web when he attempted to issue a 1099 form to Eric Vander Ley after employing him part-time during the summer of 2022. After being terminated, Eric Vander Ley launched a campaign of harassment against Hughes, resulting in a protection order being filed.

The investigation further reveals that Daniel Vander Ley purchased the business name in August 2023, following its fall from good standing with LARA. The lawsuit claims that in August 2024, Vander Ley sent Hughes a cease and desist letter, demanding he stop using the name “Downtown Ferndale Bike Shop” and requiring Hughes to pay $2,500 “in lieu of litigation” to regain his rights to the name.

Extortion Tactics Employed by the Brothers

The Vander Leys didn’t stop there; their tactics escalated to include threatening communications with business associates. For example, in one instance, a business development manager for Jamis Bikes was pressured to cease any business engagements with Hughes. Not only did they target the bike shop, but they also acquired a further 17 business names, including established local favorites like Como’s Restaurant, Urbanrest Brewing Company, Bags and Beads, Found Sound, and Beau’s Grillery.

In a notable incident involving Urbanrest Brewing Company, Eric Vander Ley demanded $500 per hour from owner Zachary Typinski for discussions about buying back the company name, a request Typinski initially believed was simply a clerical error. When the request was turned down by Typinski’s attorney, the Vander Ley brothers resorted to further harassment of employees and customers, again highlighting the lengths to which they would go to pressure local business owners.

Community Response and legal Proceedings

Despite the severity of their actions, as of now, no criminal charges have been filed against the Vander Ley brothers. Local investigative news outlet Local 4 attempted to gather comments from Hughes and Typinski, as well as Attorney General Nessel, but all parties were unable to discuss the matter due to the ongoing litigation.

Strategies for Business Owners to Remain Protected

Business owners in Michigan are urged to be proactive in protecting their interests. Maintaining good standing with LARA can prevent such exploitation. Here are some essential steps businesses can take:

• Timely Filing of Reports: Ensure all necessary reports and statements, including annual reports, are filed on schedule to maintain compliance.
• Payment of Fees and Taxes: Set aside funds to settle all required fees and taxes promptly.
• Registered Agent Maintenance: If applicable, keep a registered agent in the state to handle important legal documents.
• Updating Business Information: Regularly check and update your business status with LARA.
• License Renewals: Ensure that all necessary licenses and permits are renewed as needed.

How AI legalese decoder Can Help

In today’s complex legal landscape, understanding the intricacies of business compliance and contract language is paramount. This is where the AI legalese decoder can be an invaluable resource. It simplifies complicated legal documents, translating jargon into plain language, thereby enabling business owners to comprehend their rights and obligations fully. With this tool, users can also gain insights on best practices for maintaining compliance, protecting themselves from unscrupulous entities, and better preparing for potential disputes.

By utilizing the AI legalese decoder, business owners can empower themselves with knowledge, ensuring they navigate the legal terrain effectively while safeguarding their enterprises from vulnerabilities that could be exploited by individuals like the Vander Ley brothers.

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