Is this considered fraud?

[DFir]

What is the name of your state (only U.S. law)? ME

A situation has arisen between my parents and a person who leases property from them. This person leases my parents gravel pit that is pretty much devoid of any materials left, but there is some. The agreement between my parents and this person is very lax, but there is paperwork. There is an honor system from this guy to write down how much material he has removed from the property and to pay my parents accordingly.

With the way the housing market took a dive, there is a credit crunch on his end to pay for his equipment to keep running the business. He has already stated that he owes from previous loads.

In the last few days, he has started once again to take material out without ever mentioning anything to my parents. It will be the final amount, I am sure, of the material left in the pit.

My gut feeling is that he is up against the ropes and needs money fast to pay some things before a repossession happens. If a repo happens, then he is going to be financially in a huge amount of trouble. This would lead me to believe his intentions are that there is some value that he can tap off of in the material, but really has no intentions of paying anything from this since he has creditors pounding on him.

He is doing this consciously knowing full well he will never be paying my parents any amount whatsoever. I forsee repossession of his equipment and foreclosure of his home along with bankruptcy.

I would like to go to him and make a statement that what I feel he is doing is going to land him in jail, if this is actually the case.

 

[ReformedMan]

Whether or not it was fraud would depend on the nature of the contract that was drawn up between the lessee and your parents. Unfortunately, at present you can't actually DO anything (YOU couldn't anyway, it would have to be your parents) because HE hasn't done anything. I would think it would be most unwise to approach and accuse somebody who has not done anything illegal to present. It seems like that could come back to bite you in the end. Hopefully if I have misspoken one of the legal types will show up to comment soon.

 

[outonbail]

I don't see how you're parents are going to prove he intended to take this material without compensating them for it. Hence the police will not get involved at this point and consider it a civil matter.
If the terms of the contract state that he has to be current in payments to your parents for the material he has already removed before he can remove any more, then they can stop him from removing more material by locking him out.
But if as you say this contract is very lax, with your parents relying on his honesty to determine what he owes them, than the only thing they will get out of this situation is a good lesson in how to handle business matters in the future. "Honesty" doesn't gain a line of credit from any bank I know of and the courts don't award judgments on anyone's "gut feelings".

Additionally, if this guy is looking at his equipment being repossessed, then paying them a few overdue payments is probably only postponing the inevitable and therefore not a wise way to invest the money. Unless this guy has a way of making next month's payments and the ones after that, why throw any more money away when there is no chance of seeing any return from it?
He's probably trying to get all the material he can while he still has use of the equipment, then he can sell the material and have some capitol to get something else in the works to earn money off of. But to use whatever amount he has, to delay repossession for another month, when he has no use for the equipment during that month, is not a real smart business decision.
Just my opinion,,,,