An embattled Auburn auctioneer can add a civil lawsuit by a Tennessee city and a pending investigation there to his list of concerns.
The city of Sevierville, Tenn., alleges that Dean V. Kruse and Kruse International stuck the city with more than $12,000 in unpaid bills after a June auction.
The Journal Gazette reported in August that Kruse faces millions of dollars in debts from unpaid corporate credit card bills and personal and business loans, including two foreclosure lawsuits in DeKalb County. Kruse International’s Better Business Bureau rating is the lowest possible, and the company’s license to operate was suspended in Arizona.
Kruse International rented the Sevierville Events Center for a June car show. The $8,500 check Kruse sent for that lease bounced June 30, according to the lawsuit.
In addition to unpaid bills for Internet and telephone services, equipment and security, Kruse owes $4,350 to the city, the lawsuit said.
A hearing in that case is scheduled for next week, court staff said.
“Our attempts to get payment have failed,” city spokesman Bob Stahlke said Wednesday.
Stahlke confirmed that the city’s criminal investigation division continues to investigate because of the city’s own debt and others claiming they were not paid after the June event, and he said he understands the Secret Service has been involved.
In addition to protecting the president, the Secret Service is authorized to investigate certain financial crimes. No one was available Wednesday at the Knoxville, Tenn., Secret Service branch to take media questions.
Kruse said Wednesday he believes the idea that the Secret Service would be investigating him is a rumor spread by people with whom he’s had bad business dealings.
“I think they’re just trying to stir up trouble,” he said.
But he acknowledged Sevierville’s lawsuit and said it remains on the list of issues he hopes to resolve in the near future.
“I’m sure that’ll be settled,” he said. “I had a bad summer, but I’m a lot better off now than I was.”
Kruse has said he often released cars to longtime customers before receiving payment, and those customers would pay within a week or two by bank wire or check.
The recession has meant more people aren’t paying him – to the tune of millions of dollars – causing him to suspend that practice before the Labor Day auction and require immediate payment. Meanwhile, dozens of sellers claim they haven’t been paid, and many have sued.
The Labor Day sale drew the largest crowd in the auction’s history, Kruse said, but sales were down. Kruse International has another auction this week in Hershey, Pa.
Kruse said he has cut his full-time staff in half this year to about 20 employees.
One foreclosure lawsuit in DeKalb Superior Court gave Kruse September deadlines for paying off his mortgage lender with proceeds from Kruse International’s Labor Day auction, the company’s largest event.
The company was to provide a detailed accounting of the auction to the court, the agreement said.
No further public documents in that case have been filed, and attorneys for both sides have declined to comment about whether the terms of the agreement were met. A hearing is scheduled for Nov. 2, and several other lawsuits are pending in DeKalb County.
