At about 10 minutes before 5 p.m. on Wednesday, September 25th, 2024, lawyers representing a company called Seamless Funding LLC filed in the Supreme Court of Ontario County, New York a suit in the County’s Supreme Court.
They file suit, it seems, now and then against any company that is declared in default of the loans that they issue. The significance of this specific court filing is that it was against the company in Hawaii.
Specifically, SMS Research and Marketing Services and its owner, Timothy James Carson. Reports suggested that Mr. Carson was a top-notch choice when he took over the business in 2021.
Now, it seems, the company has fallen on hard times, and its owner took out a loan to bridge the funding gap the company was experiencing, starting in August of 2024.
According to the filing, Seamless and Mr. Carson signed a loan document back on August 22, 2024, to provide him and the firm $22,500 in funding, minus 10% for fees. The terms and conditions spelled out that within 77 days from signature, SMS would pay back the loan in full.
With interest, the payback amount totaled $33,727. That is where this loan stops looking normal to anyone.
Mr. Carson used the expected payment from contracts as security for the loan. He anticipated that the company would receive $223,000 by the end of the loan term, but the contracts linked to this amount were not specified in the loan paperwork.
Secondly, to get the funds he needed, Mr. Carson agreed to terms and conditions that make this loan look like it comes from a “lender of last resort.” Carson agreed to the loan with an interest rate of 528.62%.
That would be a loan that is the prime rate, which right now is 8%, plus 520.62 points.
The terms and conditions required SMS to make daily payments of $655 to service the loan. This means that a payment needed to be sent to Seamless every day to continue servicing the loan. An analysis of the lawsuit reveals that SMS made most of the payments, sending payments every day from August 22 to September 17. However, on September 18 and 19, the bank rejected the automatic withdrawal of payment, most likely due to insufficient funds, and all payments stopped at that point.
On the 25th of September, when the loan termination date arrived, the loan was declared in default. On the same day, a lawsuit was filed against Carson and SMS. According to the Proof of Service record, Seamless’ lawyer, Mr. Boris Yankovitch, sent the lawsuit via certified mail to SMS’s Bishop St. address and Mr. Carson’s home in Kaneohe.
By now, Seamless and their lawyers most likely have discovered that the company is not in business, and the mail returned to them, as they sent it on October 2, which was after this blogger was told that the company shut down.
Talking about a timeline, it seems that whatever happened to SMS, happened quickly. Could it be that a state entity that awarded one of the larger contracts with SMS decided not to pay out? Was it another entity, as SMS had contracts with, among others, the County of Maui, that chose not to pay? And why did Mr. Carson suddenly in August choose to get a loan from a lender of last resort with horrible terms based on a payout of over $200,000 that never happened?
However it happened, the situation was made all-too-real by at least one now-former employee, named William Grant, who posted on his Facebook page the following on September 27th, two days after the lawsuit from Seamless was filed.
(Read the comments and who acknowledged the post. Interesting people commenting).
And, no doubt, more details of this story will emerge now that through all this, that SMS’s closure is now confirmed.