Deadbeat Advocate owners pull 11th hour Chapter 11 scam

By Linda Bentley | July 2, 2008

Playing the system to continue ripping people off
PHOENIX – Thomas and Karen Seemeyer, who own the Desert Advocate, LLC, have been ripping people off for decades and have learned how to play the legal system to their advantage.

When Thomas Seemeyer showed up in Maricopa County Superior Court before Judge Thomas Dunevant, III on June 2, 2008 for a hearing on Freedom Arizona Information Inc.’s “Order To Show Cause Why A Receiver Should Not Be Appointed” to foreclose on the Desert Advocate in order to collect the $435,640.83 owed, Seemeyer was informed because he is not a licensed attorney, he cannot represent the LLC.

Seemeyer knows full well the court will not allow a lay person to represent a corporate entity.

However, once again, Seemeyer played another judge for a fool and showed up without an attorney and requested a continuance for the purpose of obtaining counsel.
Dunevant granted the continuance, setting the evidentiary hearing for 10 a.m. on Tuesday, June 24, admonishing Seemeyer to inform any retained counsel of the date and time of the hearing.

Seemeyer retained Attorney James M. Laganke, who has represented the Seemeyers in their bankruptcy filings since 1991, and who, at 5:11 p.m. on June 23, the eve of the order to show cause hearing, electronically filed a Chapter 11 voluntary petition for bankruptcy under the name Thomas Seemeyer.

However, the actual petition was in the name of the Desert Advocate, not Seemeyer, and claimed to have been signed on June 20, 2008, rather than June 23, when Leganke electronically filed the documents.

A copy of the voluntary petition was then forwarded to Dunevant, who noted in his June 24 minute entry the Desert Advocate had filed a petition under the bankruptcy code on June 20 and ordered the case/claim placed on the inactive calendar until Dec. 22, 2008 (180 days).

Dunevant further stated the case/claim would be dismissed on Dec. 22, 2008 unless prior to the scheduled dismissal date Freedom Arizona Information demonstrates it has moved to lift the stay, sought to reduce the claim(s) against the debtor, obtained severance of the claim or somehow demonstrated a reasonable basis for continuance of the case on the inactive calendar.

When Leganke filed Seemeyer’s petition in U.S. Bankruptcy Court, none of the schedules or statements were included, nor was the mailing list of creditors, which the court affirmed must be uploaded no later than five calendar days of filing the petition or it could result in dismissal of the case without further notice.

Chapter 11 allows a business to remain in operation as it reorganizes its debt. So, with their 11th hour filing for Chapter 11, the Seemeyers were not only able to avoid the order to show cause hearing as to why a receiver shouldn’t be appointed, they were afforded another court-sanctioned opportunity to continue swindling advertisers by charging rates that defy their actual circulation, ripping off employees by deducting payroll taxes that are never deposited and ripping off taxpayers who subsidize all the taxes, including the payroll and sales taxes the Seemeyers don’t pay.

On June 24, the day after Seemeyer’s voluntary petition was filed, the clerk of the court issued a Notice of Error and/or Deficiencies for Leganke’s electronically filed documents, stating: “The petition uploaded is not for debtor Thomas Seemeyer. Please docket and upload the correct document using amendment to petition.”

Last Friday, instead of filing a correction, Leganke filed a motion to dismiss and a motion to expunge the record in the Chapter 11 proceedings.

Leganke wrote, “On Monday, June 23, 2008 two (2) bankruptcy cases were filed – one for Thomas F. Seemeyer and the other for Desert Advocate, LLC. The filing for Mr. Seemeyer was an error made by a temporary secretary as counsel’s regular secretary was on vacation. Counsel requests that Mr. Seemeyer’s case be dismissed and the record be expunged so it does not reflect that Mr. Seemeyer was in bankruptcy. Counsel apologizes for the inconvenience.

At first it appeared Leganke was involved in a conspiracy to commit fraud, since no bankruptcy petition could be found for the Desert Advocate, only Thomas Seemeyer.
However, Sonoran News learned on Wednesday, after the paper had gone to press, there were in fact two bankruptcies filed with the second one filed under “The Desert Advocate.”

Simply searching “Desert Advocate” brought up nothing unless it was prefaced with “The.”

Interestingly, when the Seemeyers previously filed for bankruptcy under their personal names, it seemed to wipe out not just personal debt but their business debts and judgments as well, since the Seemeyers were the sole partners in those business ventures, as they are in the Desert Advocate.

However, it appears the Seemeyers are not able to file personal bankruptcy again just yet and have never filed under a business name.

The Seemeyers’ home in New River is scheduled for another trustee sale at 11:30 a.m. on August 29, 2008.

American General Home Equity, Inc., which granted the Seemeyers a $100,000 home equity line of credit a year ago, apparently purchased the first mortgage after the last trustee sale was cancelled. 

The “Statement of Breach or Non-performance” cites “non-payment of principal and/or interest from October 2007 and all subsequent payments, plus all late charges and impounds due.”

Last Wednesday, the Arizona Industrial Commission filed a transcript of judgment for $6,230.76 against the uninsured Desert Advocate for yet another workers’ compensation claim in the matter of Nicholas Hall, whom the Advocate continues to list as an employee on its masthead, although long gone.

Saab is going after not just the Seemeyers, but also Karen Seemeyer’s father, who is actually the responsible party for the vehicle his daughter continues to drive, since it was purchased on credit by his wife, who is now deceased.

However, Karen Seemeyer appropriated the Saab convertible, refuses to make payments and has been hiding the vehicle from Saab, which posted a $38,750 bond for the right to repossess it.

Both Seemeyer and her father have subsequently been served with a notice of lawsuit.
For decades, the Seemeyers’ trademark has been that of gaming the legal system while ripping off customers, vendors and employees. Karen Seemeyer has now expanded on that M.O. by dragging her innocent father into the fray.