Royal Links, USA –Was it an advertising program or a classic Ponzi scheme?

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Steve Lombardi, Attorney

Most golf course owners who were a part of the Royal Links, USA hospitality cart advertising program lost a lot of money. Advertising that was supposed to pay for lease payments never materialized and the program eventually collapsed leaving the owners with making monthly lease payments amounting to over $20,000. It would not have been so bad if the owners hadn't pay $12,500 for what amounts to a Dixie Cup with wheels and a canopy. It wouldn't cool if you didn't add ice and couldn't keep anything warm unless it was made warm. You could pull it behind a golf cart but it wouldn't move on its own. For $12,500 you could have purchased a fancy riding mower and pulled a $200 cart behind it with coolers filled with ice.  Many of the leases required venue in Polk County, Iowa, which is why I became involved with representing golf course owners who were sued by the leasing companies.

Royal Links USA - Claim Form - Victim Impact Statement

The National Golf Court Owners Association has tried to keep its members up to date on announcements and the efforts by the Department of Justice in the Northern District of Ohio to bring some justice to the table. Indictments were brought and plea agreements worked out but one question still not answered is what happened to the money? NGCOA

If what I've been told is true over 2,500 hospitality carts were sold to golf course owners at a price tag of $12,500 each. Add it up; it's not chicken feed. It's over $31 million. The golf course owners were told by a man now deceased but working on behalf of Royal Links, USA that if this program was a no-brainer. If the owners signed up for the program and agreed to lease the cart, RL would pay them from advertising revenues generated from ads placed on the carts. But the advertising dollars never did materialize which raises a question as to what advertising was in place when the program was first being sold. If there were no advertisers already signed up, then where did the few dollars paid to the first few owners come from? Were those owners who promoted the program as being a no-brainer being paid from the money other owners were paying to buy into the program? If so isn't that a classic strategy of the Ponzi schemer?

Litmus Test: If you admit it's your signature on the lease, then for sure you didn't read the lease.

Royal Links USAAnd another question looms large about the money taken in. What happened to the $31,250,000 paid for these carts?  Where did it go and is there any left in some bank account? I never could understand why no one filed an objection in the Royal Links USA bankruptcy proceedings asserting this was one giant Ponzi scheme, then doing discovery and tracking the cash? That seemed to me to be the correct way to go. Find the cash stash and you just hit a hole-in-one. But that lawsuit never was filed and none of my clients had the money to hire counsel and pursue it.  So if there is any cash left it's long gone and sitting in Switzerland or perhaps a Bahamian bank. Perhaps that is what the U.S. Attorney's office in Ohio needs to pursue before the sentencing hearing. And then again, perhaps not.

For the many clients we've represented here is the DOJ Victim Impact Statement (financial claim form) that you should fill out and file.

Royal Links USA Victim Impact Statement 

The US District Court for the Northern District of Ohio has postponed the August 23 sentencing hearing for the defendants in the Royal Links Case. The judge has not set a new date for the hearing.

This delay gives golf course owners who had contracts with Royal Links additional time to complete the Victim Impact Statement and provide it to the court. These statements will be considered by the judge in the sentencing process. In addition to possible restitution to victims, we understand the maximum penalty is five years imprisonment.

Please download the Victim Impact Statement and return it via fax to:

Terri Greene
Victim/Witness Coordinator
US Attorney's Office, Northern Ohio
Fax: 216-685-2378


For Additional Information

Dept. of Justice Indictment
Dept. of Justice Press Release

 Victim Impact Statement

NGCOA - National Golf Course Owners Association Royal Links USA page


Questions to ask and answer before signing equipment leases:

  • What is a hell or high water clause?
  • Have you read the lease?
  • Do you understand the terms?
  • What happens if the product you're financing the purchase of stops working?
  • Do you still have to make lease payments if the product being financed doesn't live up to your expectations?
  • What difference does it make that the manufacturer of the goods isn't financing the purchase or lease?
  • Would you be better off paying an attorney to review the lease and advise you as to what your liability may be?
  • Have I considered all other avenues for financing the product?
  • Am I better off having the product manufacturer finance the purchase of lease?
  • If the manufacturer isn't willing to finance it should that tell me something about this program?
  • Hell or High Water Clause Case

Iowa Supreme Court on the hell-or-high-water clause wherein the Court discussed the clause and describes the cart in a lower court opinion as follows:

2 One district court judge has referred to the carts as "an ice chest on wheels." See C and J Leasing Corp. v. Hendren Golf Mgmt., Inc., No. 06-0429, 2007 WL 257955, at *1 n.3 (Iowa Ct. App. Jan. 31, 2007). The carts have no mechanized features of any kind for transportation, refrigeration, or a cash register.

Steve Lombardi
Iowa personal injury, workers' compensation, motorcycle, quadriplegic, paraplegic, brain injury, death
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