Colorado Man – William C. Crabbe – Convicted of Tax Fraud!

WILLIAM C. CRABBE, age 58, of Kersey, Colorado, was found guilty Friday, March 7, 2008, of Failure to Pay Employee Federal Payroll Taxes, and of Filing False Tax Returns. Unlike his co-defendant, JAMES S. ROWAN, had earlier pled guilty of similar charges.

According to the US Attorney’s news release, CRABBE was co-owner and principal officer of Columbine Health Care Systems, a now defunct national nurse-staffing agency which operated in 35 states throughout the United States. Columbine would charge its clients a fee for placing nurses in such places as hospitals, healthcare facilities, and doctor’s offices. Columbine would then pay wages to the nurses. The company’s corporate offices were located in Greeley, Colorado, with a few small sales offices located in other states.

According to an article in the Denver Business Journal, CRABBE was quick to roll his ex-partner stating, “I was unfortunately too trusting,” William Crabbe testified on March 4. “I could not imagine that someone would simply decide not to pay taxes.”

The original indictment charging both CRABBE and ROWAN with tax fraud states the following:

The defendants were required to withhold federal income tax, Social Security taxes, and Medicare taxes from their employees’ pay checks. The indictment alleges that from June 30, 2000 through December 31, 2001, the defendants deducted and collected these taxes from their employees, but only paid these taxes for their corporate employees, and not for their nurses. From March 31, 2002 through December 31, 2002, the defendants allegedly collected these taxes but did not pay them to the federal government for either their corporate employees or their nurses. In total, CRABBE failed to pay $4,244,433 in taxes. ROWAN failed to pay a total of $4,236,531 in taxes.

In addition, the indictment alleges that both defendants evaded the IRS in 2001 by concealing their income of approximately $200,000 by using a shell company, Global Management LLC, thus avoiding paying the IRS over $70,000 in taxes owed. CRABBE is also charged with filing false income tax returns for quarters ending March 31, 1999 through December 31, 2001.

While the indictment came in 2006 the jury verdict finding WILLIAM C. CRABBE guilty was reached on March 7, 2008. “Thanks goes to the hard work of the agents who investigated this complex crime and the prosecutors who obtained the guilty verdicts,” U.S. Attorney Eid said. “Our mission at the IRS is to apply the tax law with integrity and fairness to all,” said Terry L. Stuart, Special Agent in Charge of the Denver Field Office. “That means that all taxpayers should pay their fair share,” Stuart said.

Every choice has a consequence! Seems that lately there have been a rash of tax fraud convictions, but then again, it is tax season…perhaps they are timed that way for a reason. One sure way to gain significant tax compliance is to show what can happen when you don’t follow the rules.

Today, speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?

In an unusually vulnerable style, Chuck Gallagher explores the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by his personal stories and poignant lessons.

For information about my presentations, visit my website – www.chuckgallagher.com

Embezzlement Greed – Sherry Gehrung Indicted for Charging Personal Expenses to Corporation!

There are some things that just fall into the category of “dumb criminal” choices. Now, I must admit I have made some dumb choices too, but what I’m reporting on here almost falls into the category of “dumb and dumber!”

Seems that Sherry Gehrung, age 42, of California was arraigned on a wire fraud charge alleging that she embezzled money from her former employer. Funny, how when you take money from your employer they always become your former employer! Anyway…

According to the news release from the US Attorney’s office, Gehrung was an administrative assistant and worked at Alza’s Mountain View, California facility. Alza is a pharmaceutical research and development company that is a wholly owned subsidiary of Johnson & Johnson. Between February 2007 and October 2007, Ms. Gehrung fraudulently charged over $240,000 in personal expenses on an Alza corporate credit card, including paying for a 1968 Ford Mustang and 1969 Chevrolet Camaro automobile, the restoration of those automobiles, cosmetic surgery, a Hawaii and Tahiti cruise vacation, a granite kitchen countertop, a residential air-conditioning unit, and American Express gift cards.

Now…wonder if she thought she’d get by with such a blatant fraud? It’s pretty obvious that a credit card company bills the holder (in this case Alza) each month and you’d think that when they saw the charge for a 1968 Ford Mustang it might have raised some eyebrows. Honestly, I’d like to know what she was thinking?

Keep in mind, an Indictment contains only allegations against an individual and, as with all defendants, Ms. Gehrung must be presumed innocent unless and until convicted.

Today, speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?

In an unusually vulnerable style, Chuck Gallagher explores the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by his personal stories and poignant lessons.

For information about my presentations, visit my website – www.chuckgallagher.com

“Teach Me To Trade” Instructors Indicted in a Multi-Million Dollar Stock Trading Seminar Scheme

People from all walks of life attended seminars nationwide to learn how to better invest their money. They attended “Teach Me To Trade” seminars – controlled by the Whitney Information Network, Inc. a nationwide seminar company. See their web site here.

Seems that Linda Woolf, age 48, and David Gengler, age 34, both of Utah, were indicted on federal grand jury charges of wire fraud and conspiring to commit wire and mail fraud. In addition, the SEC also announced the filing of civil fraud charges against Woolf and Gengler.

According to the news release from the US Attorney’s office: Woolf and Gengler falsely represented themselves to be highly successful stock traders in order to sell “advanced” seminar courses costing from $3,000 to more than $40,000. Many of the attendees were senior citizens, who were encouraged by the Woolf and Gengler to take out large lines of credit and to show their retirement and investment portfolios to the seminar sales staff (known as “Success Coaches”), ostensibly to receive investment advice, but really to allow the staff to identify how much money an individual had available.

Woolf and Gengler worked for “Teach Me To Trade,” a brand name controlled by the Whitney Information Network, Inc., a nationwide seminar company that frequently targeted Northern Virginia.

While this might be one of the first indictments against “Teach Me To Trade” instructors, it is not the first time this organization has been accused of unethical business practices. Just searching for “Teach Me To Trade” – other than their nicely done website – turns up a more bad press than good. Here are some examples:

Trading is not as easy as they would make you believe and most people will loose their money. This company takes advantage of the most financially vulnerable and should be stopped. Denise – Glenview, Illinois – full article here.

My major complaint about TMTT is that they prey on the innocent. A bonafide organization would have advised us that this was beyond our means. Henk Belfast, New York – full article here.

I recently went to the free seminar in Arizona just to see how much trading information could be tought in a 2 hour class. What a joke that was! It was 2 hours of trying to be scammed into paying $200 for a 3 day workshop. After listening to basically a salesman in a cheap suit talk about the money you could make with their product I realized how much information he was leaving out on every chart he showed. It was just enough to get your attention but also confuse the hell out of you to make you feel stupid. Then he would explain how with more classes all of this would become clear and easy to understand. Its a scamming sales pitch…take my advice and save your money. Chad – Arizona – full report found here.

According to an article in Business Week, “Woolf and Gengler worked as independent contractors, according to the indictment, and received sales commissions of 10 percent to 15 percent from Teach Me to Trade, which is a part of the Whitney Information Network, a publicly traded company based in Cape Coral, Fla.

Whitney itself is not charged, though the indictment says Woolf and Gengler relied on the company’s “fradulent marketing efforts” to entice the public to their seminars.”

Criminal indictments are only charges and not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty. That said, every choice has a consequence. My guess – and it is only an educated guess – is that this is the beginning of the crumble of this organization. I suspect that “Teach Me To Trade” will try to distance themselves from those indicted, but with all the buzz out there on this organization, I would suspect that there will be more to come.

Today, I speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?

In an unusually vulnerable style, Chuck Gallagher explores the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by his personal stories and poignant lessons.

For information about my presentations, visit my website – www.chuckgallagher.com

Tax Evasion – Tennessee Business Owner Thoeun Chan Pleads Guilty – Comments by Business Ethics Speaker Chuck Gallagher

How often I remember in my days as tax partner in a CPA firm, people saying that “as long as it’s cash, you can’t get caught.” They were inferring that they could avoid tax by just not reporting cash as income.

True…cash is harder to track, but most people don’t seem to connect the dots – every choice has a consequence and you do reap what you sow. Thoeun Chan, age 52, of Germantown, Tennessee recently faced those two truths as he plead guilty to tax evasion for failure to report cash as income on his tax returns.

According to the news release by the US Attorney’s office: Chan, owner and operator of Handiworks Jewelry and Winchester Pawn and Jewelry in Memphis , admitted that he failed to report approximately $274,875 in income for 2001 and approximately $277,277 in income for 2002. These false returns resulted in a tax loss to the United States of approximately $207,142.30.

It was stated at the hearing that Chan utilized an accountant to prepare his tax returns; however, he failed to provide the accountant with a large amount of the business revenues, namely cash receipts. On his 2001 return, Chan reported $0 taxable income for 2001 and only $40,524 in taxable income for 2002. During this time Chan enjoyed a lifestyle inconsistent with these reported levels of income and he acquired assets without a proportionate increase in liabilities. Evidence revealed during the plea hearing showed that Chan had approximately $312,000 in out of pocket expenditures in 2001 and approximately $604,000 in out of pocket expenditures in 2002.

The fallacy in Chan’s little scheme is spending patterns, lifestyle and income. Notice (this is real simple stuff), the IRS looked at Chan’s lifestyle his income and his debt. Now, if Chan had been increasing his debt and living off of debt, the scheme might have run a bit longer. However, I routinely say, every choice has a consequence – and Chan soon will face the consequence of his action which could result in 5 years in federal prison.

So there is no misunderstanding, I know what Chan is facing as I, too, spent time in federal prison for a tax crime. I am sympathetic to Chan’s plight, and understand that soon he will learn that the momentary gain does not equal the cost he will be required to pay.

As a result of my past deeds, I, today, speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?
In an unusually vulnerable style, Chuck Gallagher explores the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by his personal stories and poignant lessons.

For information about my presentations, visit my website – www.chuckgallagher.com