Wayne Brooks, a Leesburg air traffic controller, thought he'd found a good way to earn $100 a week part time when he agreed last November to buy a $2,850 steam carpet cleaner from ALC Corp. in Fairfax City.
Any doubts he may have had about the deal vanished, Brooks said, when the local manager for a loan company owned by the Bank of Virginia, one of Virginia's largest bank holding companies, told him that ALC was reputable.
But the company's good reputation vanished last January along with its affable boss, Frank Chandler. He left behind Brooks and about 90 other customers in the Washington and Richmond areas, most of whom have machines they can't use and debts they can't afford to pay.
The FBI is investigating ALC and possible links to similar companies in at least three other East Coast states, according to Charles Monroe, special agent in charge of the Richmond office.
The investigation isn't much comfort for ALC's former customers, who calculate ALC could have made a $60,000 profit in Fairfax alone in less than four months. They recently learned that the machines they agreed to pay $2,850 for -- with interest and insurance, payments will total $4,228.92 over three years - actually retail for less than $700.
"It's a Horatio Alger-gets-nailed case," said John McGeehan, a Vienna lawyer for 15 of the victims.
Based in Richmond, ALC opened its Fairfax office last fall. Chandler, office manager Nancy Summers and an employe named Brad Benton rented space in a Fairfax City office building, hired a secretary and placed an ad in the help-wanted section of The Washington Post.
The ad promised $100 a week of part-time janitorial work: "We train. No cash outlay. All expenses paid out of gross earnings."
Those who answered were guaranteed enough part-time work to gross $200 a week. After giving ALC 30 percent, paying off $117.47 a month on the machines, which ALC bought from a South Carolina distributor, and buying cleaning fluids the company provided, customers would clear at least $100. Or their money back, Chandler pledged.
For the skeptical, Chandler put that pledge in writing.
For the extremely skeptical, he arranged a visit to Roger Worman, manager of the Fairfax Mall branch of Budget Plan, the Bank of Virginia-owned company that financed the loans to buy the equipment.
Worman said he never recommended that prospective customers go into business with Chandler.
"All I told them was that we had never had any problems with him in the few months we'd done business," he said.
Others remember it differently. Said another Leesburg man, who asked not to be identified for fear of losing his regular job, "Worman heartily endorsed the guy [Chandler]. He said the company had dealt with the guy in Richmond and he had an impeccable reputation. That really made a big difference in my mind."
Worman said he had no idea what the carpet cleaning equipment was worth. "We weren't financing the machines, we were financing the people who bought them," he said, "and nine out of 10 were A-1 citizens with solid credit."
For awhile, business went well. ALC ran ads in local newspapers offering cut-rate carpet cleaning, then referred the jobs it obtained to its customers. German Jaramillo, a furniture warehouse manager who lives in Hyattsville, recalled making close to $100 a week over a two-month period before Christmas.
Many others didn't do as well. But the company made good on its pledge to pay some installments for those who didn't make what it had guaranteed.
But after Christmas, business slowed dramatically. "Toward the end of January, I noticed the office was getting empty-looking," recalled ALC's former secretary, a McLean woman who asked not to be named.
"Then on a Friday, Nancy told me they were going to have to close for awhile. She paid me my salary and said she'd call me when things picked up."
That was Jan. 26. When Virginia Consumer Affairs Office investigator G. Fred Albrecht went to the ALC office the following Wednesday to follow up on a complaint, he found the front door locked.Upon further investigation, Albrecht learned ALC had left town, closed its Richmond office and left no forwarding address.
Monroe said the ALC pattern has been repeated in Maryland, Florida and Pennsylvania, sometimes with insect extermination or swimming pool cleaning equipment replacing the carpet cleaners.
Monroe said the FBI has located Chandler and other principals, but won't say where or how many people are under investigation. He says the six-month probe should be wrapped up sometime this summer and could result in racketeering and fraud charges against Chandler and others.
As part of the investigation, the FBI three months ago subpoenaed all of Budget Plan's financial records concerning ALC.
Budget Plan maintains it was as much a victim of ALC as were its customers, and said it intends to collect on the loans.
"We think we have an enforceable contract," said Christopher Giragosian, assistant corporate counsel for Bank of Virginia.But Giragosian said the company hasn't sued any customers yet and is attempting to negotiate a settlement.
Lawyers for some of the customers say that under the Federal Trade Commission's holder-in-due-course rule, customers can refuse payment to Budget Plan because ALC reneged on promised services. But Giragosian said the company will argue the loans were business, not consumer, loans and therefore not subject to the rule - a position FTC staff members said is valid.
A few of the customers attempted to keep their equipment in use by going into part-time business for themselves. But most, like Brooks, have put the machines in storage hoping to return them and void their loan obligations. Many said they have no intention of ever paying the installments.
Meanwhile, Budget Plan sends them monthly notices. "I tear them up," said Ronald L. McDonald of Washington, "and throw them in the trash can." CAPTION: Picture, Wayne Brooks displays unused equipment stored in a shed at his Sterling home. By James A. Parcell-The Washington Post