I’m not lying, I’m advertising
20 February 2023 Aaron Gilland Forest Industry Fraud
|Christopher Dillard of Dillard Timber LLC advertised his logging and timber services to North Carolina customers. The company owned no logging equipment, had no employees and Dillard himself didn’t log or mill timber. Dillard worked differently. His business model was to get the customer orders and then find a third party to do the actual work.|
His mistake came when he advertised that Dillard Timber LLC actually performed certain timber services when they did not. A quick Google search, brought me to a very sparse website for Dillard Timber LLC that primarily consists of a short advertisement on the first page and then links to contact information. The home page of the cite reads “We Buy the Timber and Do All The Rest For You! You don’t even have to move a finger! (Except to accept the check)”
When things went well, customers would probably not notice or care about the arrangement with the subcontractors. Customers would take notice only if they received poor quality work or never received the services promised.
Dillard’s business model led to allegations of unfair and deceptive advertising. In order to make a profit from his role as “middle-man,” Dillard created the impression that he was paying fair prices for the timber when he was actually paying well below market rates. The companies he contracted with to do the work received fair market rates, but he took his cut before passing the rest onto the customers.
There are some other interesting angles about this case that go beyond simply providing poor customer service and a questionable business model, however.
To start, the case was brought to court by the Attorney General of the State of North Carolina rather than the customers who were personally harmed by this arrangement. It was unwise for Dillard to assume that the cost of going to court would prevent any legal action.
Another obligation of legal businesses is to protect themselves against legal complaints. Dillard failed to follow the appropriate legal procedures which severely swayed the decision in favor of the State.
The case also leaves open the question about the legality of the company’s existence. Dillard Timber is listed as an LLC and when operated properly an LLC prevents legal action against the individuals assets. We are not told, but I suspect that Dillard thought the LLC (Limited Liability Corporation) designation would prevent serious financial losses, since he had no assets in the business. The article says he was not registered to do business in North Carolina, which I take to mean his company wasn’t registered with the Secretary of State in NC. Any businesses should be aware of registration requirements within thier operating areas. Dillard now cannot do business in the entire state (under his own name).
Read below for more details about the case and the judgement or go to (https://ncdoj.gov/wp-content/uploads/2023/01/doc05665420230125152033.pdf) to get a copy of the judgment itself.
Court Wins Claim Against Dillard Timber, LLC
On March 17, 2022, Attorney General Joshua H. Stein, acting pursuant to authority granted in Chapters 75 and 114 of the North Carolina General Statutes, filed a complaint against Christopher Dillard of Lumberton, NC. It was filed against Dillard personally because his business, Dillard Timber LLC, was not registered with the state of North Carolina.
Throughout the proceedings, Dillard failed to file or serve an answer or plead his case to the Complaint within the time required by law, which did not help his case.
On April 27, 2022, the plaintiff (Stein and the State of North Carolina) filed and served a motion for entry of default against Dillard. The next day, default was entered and on May 3, 2022, Dillard was served a copy of the Entry of Default. Then on December 13, 2022, Stein filed and served a Motion for Judgment by Default, as Dillard continued to fail to provide a written response stating his case for opposing the complaint.
Therefore, the court proceeded without Dillard’s representation of his case and final judgment was made January 31, 2023.
The prosecution’s case included the following complaints against Dillard:
Failure to respond.
Engagement in unfair and deceptive acts and practices which affected commerce.
Actions taken were done knowingly and willingly.
Actions caused financial harm to others. The case cited losses to Herman Rodger and Mary Alice Hall in the amount of $5,368.06.
Engagement in unfair and deceptive acts or practices over a long period of time (2017-2021).
Failure to take action to reimburse his victims for their financial losses.
In his advertising, Dillard, as owner and operator of Dillard Timber, LLC, claimed that his company performed logging, milling and other timber services. He also claimed that he would pay top prices for their timber when he actually used a non-standard unit of measurement in his contracts to create the impression that he was paying fair prices for timber. He was paying well below market rates.
In some cases, Dillard was also accused of failing to complete the timber services promised. He was also accused of failing to pay for ALL the timber harvested. Finally, he then failed to respond to complaints from customers.
In the end, Dillard paid the money owed the Halls and an additional $5,000 for civil penalties to the State of North Carolina for prosecuting the case.
Additionally, Dillard and Dillard Timber, LLC are permanently banned from operating a timber business in North Carolina.
Some Lessons Learned
When buying services from any business it is important to ensure they are a legitimate company that can make good on its promises. Just because the company has a website and a logo and puts LLC behind the name, doesn’t necessarily mean it is legitimate. Get references!
Know what you are paying for. Tangible goods can be seen and valued more easily than services. Make sure the service that is being delivered is what you intended. We talk a lot about contracts in this newsletter. They are the best way to keep everyone honest and actually protect both the buyer and seller from misunderstandings or unclear expectations.
Avoid Bait-and-Switch ads and websites. These lure people in with a specific promise or offer, but then change what you actually get once you try to claim the offer.
Check for details. Every quality ad will have all the details the consumer needs in order to know what they are purchasing. There should at least be a link to a website where there will be detailed information about the goods and services offered.
Even though remediation was relatively small as in this case, it is worth taking action to get your money back and to ensure others are not also being taken advantage of in the same way. This is especially true for individuals and small companies.
Let authorities know that you have been swindled. You may get support from places you never expected. Politicians are looking for votes and helping out citizens can often do that for them.