David DeSilva Sr. and Champion Fuel & Service Corp. of Peekskill have been ordered to stop selling home heating oil and to pay $176,000 in damages and restitution to customers they defrauded.
The court’s decision is the second time that DeSilva, of Hopewell Junction, has been reined in for cheating customers. His Nu Way Fuel & Service Corp. was prosecuted for the same kind of scam in 2013.
Even as Nu Way was under investigation, state Attorney General Eric T. Schneiderman alleges, DeSilva was creating Champion and devising a new scheme.
In 2014, Champion began luring customers by offering low prices for home heating oil. The company collected payments in advance, the state said, but then delivered little or no oil. It also sold service contracts but allegedly did little or no work.
The attorney general, state police and Better Business Bureau have received 83 complaints against Champion. Thirty customers sued the company in Wappingers Falls Town Court.
The Champion case, filed in March, also names DeSilva’s son, David DeSilva Jr., and Patrick Terminello. The state contends that DeSilva Jr. managed the operation and that Terminello owned 15 percent.
Justice Charles D. Wood of Westchester Supreme Court held a special hearing on matters that have “no triable issues of fact.” His Jan. 2 decision only addresses charges against Champion and DeSilva Sr. The culpability of DeSilva Jr. and Terminello have yet to be determined.
DeSilva Sr. claims, according to court papers, that neither he nor his son participated in any scheme to defraud or mislead customers. He says Terminello looted the company.
DeSilva Jr. says all he did was answer the telephone and take orders. But when he was asked in another lawsuit about his work at Champion, Wood noted, he refused to answer questions and asserted his Fifth Amendment privilege against self-incrimination.
Terminello claims the DeSilvas forged his signature on checks and documents.
“The DeSilvas and Terminello appear to be playing the blame game,” Wood said in his decision. But he found that the evidence clearly shows that DeSilva Sr. is the majority owner of Champion.
Wood ordered Champion and DeSilva Sr. to stop engaging in fraudulent practices, account for all customers who prepaid for oil and services and pay restitution and damages to all victims of the scheme.
A court previously ordered the DeSilvas to stop selling home fuel oil, in the 2013 Nu Way case, unless they posted a $200,000 performance bond. They were ordered to pay $692,879 in restitution, damages and penalties.
They never posted the bond, the attorney general said, and they paid only $49,499 of the judgment.