Bradenton Company Sues Wells Fargo, Sarasota Company For Fraud

A Bradenton Internet publishing business is suing a Sarasota businessman for securities fraud along with Wells Fargo for the bank's role in providing funds.

Melford Bibens, represented by Merrit & Sanderson law offices in Osprey, is suing Wells Fargo, Colby Cosmetics and its president Robert Colby, Directors of Cosmetics Thomas Hurley and Secretary of Cosmetics Pamela Miller.

Wells Fargo Bank is being sued for cashing a $29,000 check written by Bibens to Colby that Bibens claimed should not have been cashed. Wells Fargo denied all allegations in a response filed in court Feb. 19. The lawsuit, filed Nov. 8, 2012, has not made it to trial yet, as the two sides are still filing motions as of March 15.

Bibens is seeking to recover an unpaid $22,406 in funds, $100,000 in lost profits for his Bradenton company Electronic Publishers Unlimited. He is also seeking payment of lawyer fees, court costs and any additional relief provided by the court.

Colby's company Colby Cosmetics had "induced" on May 8, 2012, Bibens and his wife Concetta Bibens to write a $29,000 check to purchase 29,000 shares of stock in Colby Cosmetics, according to the complaint.

There was a rush placed on the purchase because the opportunity would expire in the matter of hours, according to the court complaint filed in Sarasota County Circuit Court. Colby, 57, sold securities stating the his cosmetics company stock would be taken public or be acquired for $750 million, according to the complaint. 

The cosmetics company formerly operated in the Westfield Southgate Mall around 2009. All that's left on the Internet of Colby Cosmetics's presence is a company Facebook page saying "Colbys Cosmetics You cant buy to Public haha." Colby Cosmetics dissolved as a company on Sept. 28, 2012, according to the complaint. 

Colby was convicted of federal securities fraud in 2004 and sentenced to 30 months in the Coleman Federal Correctional Complex for bilking MSH Entertainment out of $60,000, according to court records. Colby was tied to a high-profiled real estate agent Neil Husani, who had completed more than $100 million in fraudulent real estate deals in Manatee and Sarasota counties, according to the Herald-Tribune.   

Wells Fargo is being used for breach of fiduciary duty, negligent misrepresentation, fraudulent misrepresentation, breach of contract for cashing the $29,000 check and refusing to refund any portion of the funds, according to the complaint.

Colby, Hurley and the cosmetics company is being sued for violation of federal securities law, deceptive and unfair trade practices, conversion, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment and breach of contract, according to the complaint.

The complaint states that Hurly and Colby didn't explain they were promoting and selling stock shares in a way that would violate federal and state securities laws, and told the plaintiffs that the check wouldn't be negotiated until the plaintiffs met with Colby's business partner Hurley. 

Bibens became concerned about the $29,000 check in the hands of Colby, so Bibens contacted Wells Fargo to transfer funds from the account the check was written on to a second checking account, in hopes to prevent a check being cashed, according to the complaint. The thought behind the move was that the check couldn't be cashed with an account that had insufficient funds, and Bibens was told by Wells Fargo employees that the Bibens family appropriately handled the matter, according to the complaint.

Wells Fargo also issued a stop payment on the check as an extra level of guard to prevent the funds from leaving the account, according to the complaint. 

The Bibens then closed their bank account and opened a new one; however, the $29,000 check was cashed anyway, according to the complaint. 

A Wells Fargo representative blamed the error on an algorithm used by the bank's computer that allowed to check to be cashed, according to the complaint. Interestingly in the previous Colby case, Century Bank blamed a computer system for not picking up that Husani was involved with the $750,000 loan Colby acquired in 2003, the Herald-Tribune reported. Husani fled to Jordan before he could be prosecuted, according to reports.

Wells Fargo acknowledged that a representative did talk to the defendants about a stop payment on the check, but that the check was "properly presented" and that the plaintiff, Bibens, assumed risk when signing the check, according to court documents.

The address shown on the check for Electronic Publishers is 6609 Arizona St., Bradenton which today is shown as a mobile home in Bayshore Gardens not owned by the Bibens.

Colby told Bibens in a May 25 letter that the full check would be returned, but SunTrust Bank, which controls Colby's account, only returned $6,954, according to the complaint. It is unclear how or why SunTrust Bank gave Bibens $6,954, but Wells Fargo acknowledged in court documents that SunTrust did transfer that money.

Bibens claims that his company, Electronic Publishers Unlimited, has lost more than $100,000 in profits as a result of the loss funds, according to the complaint.

The company runs several websites including FaxLiensMadeEasy.com, DiabetesControlMadeEasy.com and MakingPowerSites.com.