Vital Express: The Aftermath
Tuesday, 08 August 2006
Two weeks ago,Dan and Lisa Boaz, owners of Santa Clarita based, Vital Expressmoved to North Carolina. In the wake of their departure, money isstill owed to many Santa Clarita businesses and a group ofinvestors and franchise owners are exploring their legal options,trying to determine if any assets remain to go after.

The Boaz’s sold their Sand Canyon home andmoved on July 22nd to a million dollar plus home on Lake Norman, inMooresville, North Carolina, a wealthy suburb of Charlotte.

KHTS broke the original story about the VitalExpress scandal on July 21st. Since then, we’vereceived a tremendous amount of feedback.

Click here to read thatstory.



KHTS beganinvestigating the Vital Express story last winter, when severalindividuals connected with Vital Express communicated with us. Asword among insiders spread, a number of Vital Express employees,former employees, franchise owners and investors contacted us toshare their concerns. KHTS chose not to break the story asinvestors tried to figure out their options. The radio stationbroke the story, only after it learned investors were not going tobe able to place a lien on any proceeds from the sale of theBoaz’s Sand Canyon home.

Since then, a number of other franchise ownersand investors spoke with us. However while they were willing todescribe what happened in detail, and KHTS was able to securedocumentation supporting their claims, they have requested theyremain anonymous because of pending lawsuits. A few are fearful ofretribution.

We apologize ahead of time, as we protect oursources, that we do not disclose names of a number of individualsor more specific details. But as we relay the facts, KHTS has beencareful to make certain we either have written documentation toback up statements, or have separate confirmation from more thanone source.

One thing is clear, as of this writing many highprofile companies in Santa Clarita have been impacted by VitalExpress. Money is owed all over town. One banker told KHTS,“It’s become a game to figure out who’s owedmoney.”

But it’s more than the money that’sthe tragedy. People’s lives have beendisrupted. It’s the stories of theseindividuals that really bring home the impact of what happened, asthey attempt to pick up the pieces of what’s left of VitalExpress.



Many of theinvestors were first introduced to Dan and Lisa Boaz through theirinvolvement in the community. One investor told us he was impressedwith what the young couple had accomplished. They had built an upand coming company in a very short period of time.

Vital Express, the Santa Clarita based Shippingand Logistics Company had everything going for it; top-notchequipment, a young, bright and energetic staff and charismaticowners. As the company grew, it maintained its “Mom andPop” feel. Owners, Dan and Lisa Boaz became very active inthe community. They were nominated as Santa Clarita Valley Man andWoman of the Year in 2005.

But, as the owner of one franchise told us thingsbegan to unravel as the company’s cash flow wasn’t ableto sustain the Boaz’s lifestyle.

Jonathan Kraut is a name familiar to many SantaClarita residents. The owner of a local private investigationcompany, Net Check Investigations, Jonathan ran for College of theCanyons Trustee in November 2005. He lost that election, but therace became a real eye opener.

During the election Jonathan used his detectiveskills to conduct due diligence on Vital Express. He saw the lackof payments for the performing arts center as a huge campaignissue. He shared with KHTS, “Everything happened backwards.Here was this $2 million dollar pledge the Boaz’s made to theCollege, COC scrambled to change the name on all of theirpromotional material, yet there was no contract, no pre-screening.The College had already given Vital Express the naming rights forperpetuity yet no one had done a background check to see if theyhad the financial resources to back it up. As it turned out, afteronly an hour of research last September, my staff determined thatthey didn’t have the resources to honor their $2 millioncommitment.”

By this time, KHTS had received a number ofcommunications from individuals concerned about the Vital Expressnaming. There were a lot of allegations flying around and a lot offinger pointing.

Kraut also shared his concerns with KHTS.“When I ran a background check on the Boaz’s, Idiscovered a whole history of transferring assets, constantlymoving of resources, spending lots of money, and even judgmentsagainst them.”

Jonathan Kraut spoke with a number of thefranchise owners and investors. “It was the same story. TheBoaz’s had made all these promises that weren’thappening. They were making transactions under five or sixdifferent company names at a time. I could see them planning to getready to get a fresh start in North Carolina.”

As the Boaz’s were preparing for theirmove, many outstanding bills to local vendors had not beenpaid.

“It covered a wide range of people, manybusinesses in Santa Clarita,” Jonathan commented.“Records indicate well over half a million dollars inoutstanding bills as of March.”

“The list covers other shipping companies,attorneys, cellular, computers, florists, printers, even a localpizza franchise that had delivered hundreds of dollars of pizza toVital Express. And this figure doesn’t include $500,000.00paid to the Corporation by investors, nor the money paid by thefranchisees.” Will they take care of these Santa Claritabusinesses?

KHTS called a number of these businesses in preparation for thisstory. Most of the money is still owed and in some cases the amountowed has increased. Several of the vendors had been paid, a fewsince the Boaz’s sold their Sand Canyon home. Most of thevendors who are still owed money told us the same thing. No one isreturning calls.

Kraut’s gone public with his findingsbecause he wants to prevent other institutions and businesses frommaking the same mistakes. “Whether it’s pre-employmentscreenings or checking into the financial stability of a companywho just promised you two million dollars, you need to have duediligence.”

And remember the COC performing arts center storythat broke last February when Lisa Boaz sent a letter to theCollege after COC had informed them they had defaulted on theirpayments for the naming of the Performing Arts Center? Lisa Boazrequested that they unilaterally terminate the agreement as ofFebruary 28, 2006, due to a slow-down of the economy, risinginterest rates, increased cost of construction and the significantincrease in fuel costs. Boaz promised in that same letter to paythe college the fee installments still owed for January andFebruary 2006, totaling $25,641. As of this writing, College of theCanyons Public Information Officer, Sue Bozman told KHTS,“Those payments have not been made to the college.”

The college complied with Lisa Boaz’srequest to terminate, having only received $74,359 of the $2million dollars the Boaz’s had agreed to pay.

As for the percentage of money promised to the Henry MayoHospital Foundation for local companies who use Vital Expressservices, as reported in our last story, Vital Express still hasthe 5% offer posted on the home page of their websitewww.vitalexpress.com, along with a logo of the Vital ExpressPerforming Arts Center. A few payments were madewhen the offer was first launched. The Hospital Foundation would notdivulge specifics in respect for donor confidentiality.

Since the first Vital Express story brokelast week, another key Santa Clarita investor decided to share hisstory. He told us he was attracted to VitalExpress because, for a small investment, only a $35,000.00franchise fee, investors could have an exclusive Vital Expressfranchise.

The Boaz’s had done itright; heavy marketing in franchise publications, the naming of thePerforming Arts Center at College of the Canyons and the communityinvolvement Dan and Lisa had coveted during their years in theSanta Clarita Valley. As they rolled out the marketing of thefranchises the leads just poured in. In April 2005, Vital Expresshosted a VIP luncheon during the Valley IndustrialAssociation’s (VIA) Business-to-Business Expo. It was anelaborate presentation, with community leaders driven in limos fromthe Expo to lunch at the lavish Vital Express headquarters a shortdistance away. But very few of the Valley’s leaders made theinvestment.

“I shouldhave realized something was up,” one employee reflected.“I mean here were Dan and Lisa’s friends andacquaintances, the power elite of the community. The ones who weresitting on the same Boards as they were. They should have believedin what the Boaz’s were doing, and except for a couple ofthem, they weren’t biting.”

The troublestarted a few months later. All those leads didn’t really panout. A lot of people had the $35,000.00 to get them in the door,the problem was most of them couldn’t come up with the$350,000.00 in Capital needed to successfully launch a franchise.In the end, only five franchises were sold, Phoenix, the SanGabriel Valley, Milwaukee, Seattle and Chicago. The Boaz’sheld onto company stores in Valencia, Indianapolis, Charlotte andHouston, although Houston never became fully operational. Alongwith the franchise fees another $500,000.00 was raised frominvestors who bought shares in the Corporate Franchise Group. Allthese investors were from Santa Clarita or the Ventura area, whereDan and Lisa were renting an expensive beach house. One investorlives in Pasadena, but is related to a Santa Clarita resident andbusiness owner.

By earlysummer 2005, things began slowing down with the franchise rollout.Cash flow became a problem.

“Iremember one meeting in early August. I couldn’t believeit,” another employee told us. “Dan and Lisa came inand instead of rallying the troops they started threatening. Danbegan putting heavy pressure on us, threatening our jobs. Heactually said we have to bring in this kind of money to supporttheir lifestyle. This is while they are driving new luxury cars andrenting a home on the beach in Ventura. The staff walked away fromthat meeting, flabbergasted. That was the first of many similarmeetings. And what’s funny is Lisa was worse than Dan.She’d get up there and talk about how we needed to supporttheir lifestyle. She kept pushing and pushing. It was like theywould sit home over the weekend and look at the cash flow andrealize it wasn’t covering the bills, so they’d come inon Monday morning in a rage. What a great motivator for theirstaff. They had no understanding of the negative impact it washaving.”

In better timesbonuses were given to employees.

In late 2005,some employees’ paychecks stopped. The Boaz’s beganpositioning themselves to move to North Carolina. They had alreadyestablished a number of other entities, including a company calledGlobal Logistics, which they formed in partnership with formerSanta Clarita resident, Rich Brulato, the former owner of Mama MiaRestaurant in Stevenson Ranch.

As they preparedto leave Santa Clarita, the Boaz’s purchased a million plusdollar home, on Lake Norman, in the suburban town of Mooresville,outside of Charlotte. Dan also purchased a boat to go with his newhome, along with a brand new Infinity Q-56.

“It’slike he had no conscience,” another investor told us.“Here he wasn’t paying his staff or his vendors, but hehad to brag about the new car he just bought to use at a locationhe wasn’t even living at.”

Several investorstold KHTS that anytime they expressed concern they had to fear thewrath of the Boaz’s.

One investorexpressed concerns the Boaz’s needed to increase theircommunication with the franchisees and investors. “There wasno strategy. There was no vision. Nothing was being done to makethings successful or make current franchises profitable.”

During anotherinstance, when one franchise owner complained about vendors notbeing paid, and that was impacting his new franchise, Danthreatened him over the phone.

When KHTScontacted the Boaz’s for a response to the allegations toldto us, Lisa threatened to sue the radio station, screaming over thephone for several minutes, shouting out the same unprintableexpletive over and over again.

Another VitalExpress employee however, sees things differently. As Senior VP ofSales for Vital Express, Tony Demma is poised along with otheremployees to purchase the Valencia operation from theBoaz’s.

“The KHTSarticle really surprised us,” Demma shared with the radiostation. “The article devastated our employees. We havethirty great employees here in Valencia, providing awesome service.That article jeopardized everything and accomplished nothing.Vendors and customers aren’t going to want to do businesswith us. It’s so one sided. That partabout the Performing Arts deal, COC (College of the Canyons) madetheir share of mistakes, as well.”

Demma, along withothers, is trying to salvage the Valencia franchise and save thejobs of its employees. Hopefully he’s successful. He’supset with KHTS for exposing the story.

A Midwesternfranchisee also shared his concern about the story. He informed us,“We’re doing a different kind of business than theother franchise owners. We’re doing our own thing and werealize we need to make it on our own.” According to him,everything is squared away with Vital Express corporate. “Wearen’t owed any money. The bad credit situation didn’timpact us much because we knew we’d have to pay depositsanyway. That would be the case with any new company.”

But thisfranchise owner seems to be the only one of the five franchiseeswho wasn’t impacted by the Boaz’s exploits. One ownerhas shut down his operation, a second opened and has distancedhimself from Vital Express corporate because of the problems heknew the other franchise owners were experiencing, a third has yetto open and has told us he is unlikely to open and the fourth hasleft the franchise fold and is trying to make it on its own under adifferent name.

KHTS spoke withall of the franchise owners, one told us the following story, buthe’s hesitant to be named pending legal action. He opened hisfranchise last year, along with his partner. His partner tragicallydied as they were getting their franchise off the ground, leavingbehind a widow and three week old daughter. In January, thefranchise picked up some of the overflow work for the Boaz’son the lucrative Staples account.

He claims he isstilled owed tens of thousands of dollars for the work hisfranchise completed. “Dan Boaz never paid me a penny. He keptpromising me I’d be paid, first saying, what’s therush, then telling me he’ll take care of it. When my partnerdied, Boaz said don’t worry, he’d help out mypartner’s widow and baby. That never happened. Recently, Dangave me his word I’d be paid after they sold their SandCanyon House. I still haven’t received any money.”

By late 2005, theBoaz’s were beginning to get behind on payments to a numberof vendors. BAX Global was one of the largest and most important,since most of the franchise owners relied on BAX to handle many oftheir deliveries. Lisa Boaz sent an email to the franchise ownerssaying they were no longer using BAX because they’ve beenbreaking, merchandise, not delivering on time. What she did notreveal was Vital Express owed BAX a lot of money and BAX wascutting them off. Eventually, BAX was paid, but credit wasn’treestablished. Money was also owed to many other vendors thatfranchise owners relied on to get the job done and be able to givecompetitive bids.

“Wedidn’t stand a chance,” the franchise owner told us.“Who would want to do business with a company that had badcredit? We couldn’t be competitive. It was costing all of usa lot more to move the freight. Now, there’s nothing left ofour franchise and there is no way to resurrect it because the VitalExpress name hurts a lot more than it helps.”

That franchiseowner is stuck with a building and truck lease he still isresponsible for paying, even with nothing left of hisfranchise.

“Maybe wecould have made it with that additional infusion of money Dan Boazhad promised to pay. Who knows? I guess it was greed that got tothe Boaz’s. Dan just forgot what it took. After he hit thebig time with his franchises, he didn’t want to work anymore.He was never there. He just wanted to lead the goodlife.”

KHTS hadlearned there was not enough money remaining in the sale of theBoaz’s Sand Canyon home to make a dent on the monies owed toinvestors, franchise owners and vendors.

Since thewriting of the first Vital Express expose, many people havewondered why KHTS would break this story. Rumors alluded to theKHTS owners, Carl and Jeri Goldman having lost a personalinvestment in Vital Express.



“Those rumors are completelyfalse,” stated Jeri Seratti-Goldman. “We never haveinvested in Vital Express. We became interested in the story whenthe College of the Canyons Performing Arts Center problems started.We began receiving anonymous E-mails, followed by paperworksubstantiating the allegations. It was not until the last couple ofmonths that we realized the financial troubles that were impactingso many local businesses and community leaders. We did a lot ofcommunication behind the scenes. After the Boaz’s house sold,it became apparent there was not enough money remaining to help theinvestors and vendors, so we felt it was time to go public. Maybewe can all learn from this and prevent something similar fromhappening.”

The previous comment is relevant because...?