Odd hours and multiple break-ins had residents complaining that the seemingly abandoned stores had become an eyesore for the community.
State and federal [image-nocss] records show that over a period of nine days in late 2007, loans backed by the Small Business Administration (SBA) were granted to seven corporations that were in the process of buying stores that previously operated under the Kum & Go name. Those seven corporations are currently controlled by Ish Oberoi of Illinois, according to the report.
The loans, which ranged from $89,000 to $1.8 million, totaled $7,199,700 and were issued by American Enterprise Bank in Buffalo Grove, Ill. Of that total, $5,408,685 was guaranteed by the SBA.
Under SBA rules, one company-or any group of companies affiliated by common ownership or management-typically cannot receive more than $2 million in SBA-backed loans.
Mike Stamler, a spokesperson for the SBA's Washington, D.C., office, declined to tell the Register whether the loans were made in accordance with SBA rules.
The Illinois secretary of state's office lists Oberoi as the current president of all seven companies that received the loans. All of the companies are named Elite Fuel with an added numerical designation of two through eight; all have the same registered agent, whom Oberoi describes as his accountant.
Oberoi told the newspaper the companies are unrelated. He said that while he has managed most of them, the companies are owned by other people, none of whom have any business ties to each other.
Asked how this group of unrelated owners coordinated the naming of their companies and their near-simultaneous receipt of SBA loans, Oberoi said all of the owners know each other personally. He said "a lot of people" went to American Enterprise Bank with him to secure the loans, and he told the others that he would be in charge of setting up the deal.
Oberoi said the companies all share the "Elite Fuel" name to create the impression of common ownership and management.
"We like to do that because then vendors think we're a big company and they give us more discounts," he said. "It looks like a big company so we can get more benefits from vendors."
Dan Lapucina, president of the Chicago-area bank that gave Oberoi the loans, told the paper that the companies are not affiliated "in the classic sense," but he declined to elaborate. SBA loans are made by commercial lenders, such as American Enterprise Bank. The lenders then receive a federal-government guarantee for a portion of each loan.
Oberoi said some of the other owners put him in charge of running the Des Moines stores, in addition to the two Waterloo, Iowa, stores he manages. That proved to be too difficult, he said, and the Des Moines stores were plagued by employee theft, irregular hours, out-of-service gasoline pumps, unstocked shelves and other problems.
The stores soon became an issue for neighbors as well, who complained about their poor management and upkeep.
"People in the community get used to going someplace to pick up quick needs," George Davis, who works at the Four Mile Community Center, next door to one of the stations, told the paper. "When it's not open, it affords a big inconvenience for patrons at the community center."
In addition to being listed as president of Elite Fuel, Oberoi is also the president of 16 other Illinois companies. Each goes by the name of Infinite Gas with the added numerical designation of one through 16.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.