Founders of Angola trucking company sued in Steuben Superior Court over allegations of fraud, financial improprieties

Keywords damages / lawsuit / Theft
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The founding shareholders of a northern Indiana transportation company are now defendants in a complaint for damages filed by Tradition Transportation Group Inc. in Steuben Superior Court, a lawsuit filed the same day as the shareholders’ complaint was entered against their former general counsel, a state lawmaker and several other defendants in Marion County Commercial Court.

The case, filed Oct. 23 in Steuben Superior Court, is Tradition Transportation Group, Inc. v. Timothy E. Evans, Jessica Evans and James L. Evans, 76C01-2310-PL-000453.

James and Tim Evans are TTG’s original owners.

Jessica Evans is Tim Evans’ wife.

The complaint alleges breach of fiduciary duty, fraud, unjust enrichment and conversion and civil theft by the Evanses.

Paul Vink, a partner with Bose McKinney & Evans representing TTG and the defendants in its Marion County complaint, issued a statement to Indiana Lawyer that said: “My clients look forward to uncovering the facts about what transpired and getting those facts before the Court. In the meantime, they will continue to faithfully operate the company.”

Marion County Commercial Court Judge Heather Welch issued a temporary restraining order on Oct. 26 in Timothy Evans and James Evans v. Joseph M. Davis, Joseph J. Montel, Robert Morris, Stephen W. Carnes, Aqua Power Systems, Inc., and Tradition Transportation Group, Inc., 49D01-2310-PL-041340.

Vink said the TRO that was entered was agreed to by both parties to just maintain the status quo for the moment.

He said the defendants he represents in the Marion County complaint did not object to the TRO, and worked with opposing counsel on the order signed by Welch.

Wayne Turner, an attorney with Hoover Hull Turner LLP representing the Evanses, said he could not comment on either lawsuit.

The Steuben Superior Court complaint alleges the case arises from a multiyear scheme by the Evanses to use their positions as officers, directors and shareholders of TTG to defraud, steal and misappropriate the assets of the company for their own personal gain and benefit, without the knowledge or approval of and to the detriment of TTG and its “unsuspecting officers, directors, and shareholders.”

It alleges James and Tim Evans “intentionally entering materially false warehouse invoices into the accounting records, which fraudulently increased the account receivable amount, adversely impacted the company-customer relationship, and which caused multiple employees to terminate their employment with Tradition out of concern that Jim Evans was forcing them to act in violation of the law.”

According to the complaint, on Dec. 28, 2022, TTG executed a multi-party stock purchase agreement in which all of its shares were acquired by Aqua Power Systems Inc.

The transaction identified above included promissory notes for future payouts to all owners of TTG, including specifically Tim Evans, Jim Evans and general counsel Joe Montel.

On approximately Aug. 10, 2023, Tim Evans, Jim Evans and Montel resigned from the Tradition board of directors, leaving Joe Davis and Robert Morris as members.

The complaint alleges that in September 2023, TTG was working with TAB Bank to acquire a new asset-based line of credit.

As part of the bank’s routine due diligence, it randomly spot-checked TTG’s accounts receivable, where it noticed that payments which had been made to TTG were not reflected in a manner that reduced the corresponding accounts receivable amount.

The complaint alleges that Tim Evans, who was overseeing accounting, admitted that he had directed that payments not be applied to accounts receivable so that TTG’s accounts receivable would be inflated, thus improving the appearance of the overall financial health of the company.

It also alleged that during TTG’s initial investigation, multiple TTG employees indicated that Tim Evans directed them to leave accounts receivable on the financial statements, or to put them back on the same if they had been removed.

“The Evans family knowingly made false statements about the financial condition, accounts receivable, accounts payable, credit card records and expenses of Tradition to the board of directors, shareholders, and lenders,” the complaint states.

Other than Tim Evans and Jim Evans, none of the current officers, directors, shareholders or past board members knew about the defendants’ misconduct until it came to light in September 2023, the complaint alleges.

On Sept. 28, 2023, Tradition terminated Jessica Evans, who had remained on TTG’s payroll after multiple directives from the board of directors that Tim Evans discontinue her fraudulent employment once it had been discovered.

On Oct. 2, 2023, TTG terminated Tim Evans for cause and also terminated Jim Evans for cause the following day, according to the complaint.

The plaintiffs are demanding a jury trial in the case.

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