White Collar Crime – The Aftermath for Families! Ewing, Trebert and May – How Can Healing Occur?

April 2, 2008

Three men have been convicted and all await sentencing. All understand that they will be facing substantial time in federal prison. Their lives will never be the same. Neither will the lives of those who, through family or choice, are connected to them.

Ewing, Trebert and May will find their new environment much different than the world they came from. In their past, they lived a life of intensity. To clarify, “intensity” doesn’t denote good or bad, rather “intensity” means that it was anything but common. Regardless of the reason, they made choices that will have profound and far-reaching consequences.

Years past, the three, in their own way were in the midst of the choices that earned them a prison sentence. They did not elect to obey the law. Funds, which should have been sent to the IRS were diverted and used in a manner that was inappropriate. Who was the mastermind behind this scheme – we may never know. Those who are free to speak are quick to point fingers as they find themselves embroiled in their own set of consequences – consequences which are tied either directly or indirectly to what Ewing, May or Trebert did.

What was their motive? Again, we may never know. Each, more than likely, were making choices for different reasons. Over the years I have observed many who made similar choices. The magnitude of the crime is generally irrelevant. The motive behind the crime varies but the bottom line is it becomes lying and theft in its purest form.

Do you suppose that any of these men, some well educated, would have ever said, “I can’t wait to grow up to become a liar and a thief.” Not a chance would be my guess. Certainly, I had no concept that I would ever utter those words. Yet, much like Ewing, Trebert and May, there came a point when I had to face my partners, my family and sadly, and most importantly, my wife and speak those words. That was the saddest day of my life.

Much like the “trio” here (Trebert, Ewing and May – hereinafter referred to as TEM) I made choices that I never expected would have the consequences they had. No one would have ever picked me out of a high school yearbook as most likely to be in prison! Yet, 13 short years ago I was facing prison much like TEM. The only difference was I was allowed to self-report and I’m not sure they have been given that privilege.

Having asked about the background of TEM, I’ll briefly share mine. I grew up in a single parent home as my father died of diabetic complications when I was two. My mother did not have a high school degree, so there were only certain jobs that she could do with little education. Yet, she was a great mother, full of love and encouragement. I recall many times she told me, “Son, do not be concerned with our station in life. Get a good education and know that – YOU CAN BE SOMEBODY.”

I never forgot those words – “You can be somebody.” I took them to heart. While we didn’t have much money, we always seemed to have our needs met. In high school I recall living in what today would be called “the projects.” Most of the people there saw it as a one-way ticket to nowhere. I, on the other hand, never saw the limitation. It was a place to live. If I wanted to be “somebody” I could and never felt the limitation of poverty. Perhaps, though, those years had more of an effect than I have given them credit. Perhaps.

After college and a master’s degree, my career blossomed, much like I suspect that the careers of TEM grew. I suspect that all were well respected by their families and those who were around them. They, like I, had the trappings of success – position, influence, power and money. While the May group on prior blog postings were quiet, I have found that most people who come into success find it comforting and pleasurable to share their success. Helping out those less fortunate whether family or friends can provide immense satisfaction. Speaking from personal experience, not only was doing good positive, but it boosted my ego – I felt more a “somebody” when I was able to share the wealth. And, mind you, those who received were pleased with the generosity spread their way.

Speaking candidly never did anyone whom I helped, have a clue that my generosity was from ill-gotten means. I recall on instance where my mother-in-law was confronted by one of her dear friends who questioned my rapid success. They suggested that something was wrong. They were right. Yet, the nature of people is to believe in their best, and my mother-in-law believed in me. To an independent observer it was clear that something was amiss, as most people don’t have such a meteoritic rise. Yet, my mother-in-law, a recipient of my generosity, was too close to the situation to have a clue. She defended me – to some extent at the cost of her friendship with the other person.

Years later, I was faced with admitting I was a liar and thief. The friend was right and to her credit never rubbed it in the face of my mother-in-law. Both were saddened by my choices and how I disappointed those who surrounded me. In the end, my mother-in-law became my ex-mother-in-law as my wife could not bring herself to stay in the marriage. Once trust is broken it is hard – and sometimes impossible – to rebuild.

What happened after it became public – my crimes that is? First, beyond the legal issues, which resulted in prison – enough said, my family and I had to deal with the aftermath. This is where those connected to TEM are today. My close family was angry with me, but more importantly they wanted to find someone to blame. It had to be someone’s fault. My mother wanted to blame my wife. After all she thought, if she hadn’t had the need for such an extravagant lifestyle I wouldn’t have been “forced” to make the choices I made. My mother-in-law wanted to blame my mother for a poor upbringing and my partners in my former accounting firm. In her mind, they should have known better than to let me get by with the theft…and they should have paid me more. I recall her saying, “Surely they could have just paid it off and swept it under the table.” And, my wife blamed anyone she could point a finger at.

My wife was mostly concerned with what other people would think. How would she be perceived? It’s obvious that the one committing the fraud paints those around him or her with a broad brush of guilt. She didn’t want people to think that she condoned my actions. She didn’t want people to accuse her of contributing in any way to what I did. I embarrassed her as my choices – now public – changed out status in the community and social status is important to some people. It was to me at the time, although when I had to come clean (mind you it wasn’t by choice) status was the least of my concerns. Then it was survival.

In my former blog on this subject it is crystal clear that the pain associated with the criminal choices made by TEM is expressed through the comments made by others. But a word of caution, when you point the finger at someone else, notice – THREE ARE POINTING BACK AT YOU. I say that so that perhaps, in a moment of quiet, you might reflect on how you truly feel and what you could have done to prevent this unfortunate outcome. Mind you, NO ONE, other than TEM had complete control. It was their choices, made many years ago, that brought them to where they are today. They made them and they will ultimately pay the supreme price.

So where from here? That, to those who read this, is the best question of all. First, it takes time to heal and healing only comes to those who want it. For years there are those who hang on to “victim hood” like it is a badge hard fought and earned and never find healing. Many who have read the former blog have expressed themselves with little kindness. I understand. Expression of anger is a process and begins healing; yet, it also fosters more hurt, which requires more healing. Consider what you say, whom you blame, and why blaming someone is necessary. All, who are interested, have suffered. Suffering will stop when you elect to see reality for what it is and move on.

Second, it’s impossible to move forward with out accepting responsibility. Today, while I acknowledge that I am a convicted felon, I live a happy and fulfilled life. The title “convicted felon” is meaningless to me. It holds no value. I am the result of the choices that I make daily. I become “somebody” when I recognized that being somebody is not a reflection of the cars I drove, the home I lived in or the position I had. Being “somebody” was a function of the lives I touched while here on this earth. We each come to earth for a reason. Through a series of bad choices I found mine and am better for the experiences I have had.

But, back to accepting responsibility, if you are connected to TEM then you, too, will likely learn to accept the responsibility you have had in the drama that has unfolded. As an example, my ex-mother-in-law did. She came to understand, that while she did nothing wrong, she expected a great deal from me and, while the choices were MINE, she contributed to the pressure I felt. In no way was it her fault. Yet, hindsight being 20/20, she later told me that she wished that she had never accepted the gifts (of sorts) that I lavished on her.

Even my ex-wife (a person with whom I have an excellent relationship today) has learned that status isn’t everything. Those friends she had years ago – her true friends – stuck by her side and are there today. Likewise, those who bolted were never true friends anyway. Today, she is well respected for who she is, for the work she does as an educator and for the excellent job she has done in rearing our children. She has earned respect far beyond what any amount of money could have ever provided.

Lastly, and most importantly, healing comes through forgiveness. The word “forgiveness” is easy to say and hard to do. In my life, many have forgiven me. I have, in order to earn that, made myself easy to forgive. I have opened my life – bore my soul – and exposed my weaknesses, believing that God’s purpose would somehow shine through my ego and become worthwhile and apparent to others. I found that as long as I fought – trying to make myself right – I blocked the healing power of forgiveness. But beyond me, I found that those who forgave found healing in themselves. They were able to let go of their anger, resentments and victim mentality. The power that forgiveness brings is incredible.

As I close, while my ego would like to slap the hand of those whose comments have been hurtful to others from the other blog, I understand that the experience that TEM are going through is not isolated to them. Yes, they may be the ones who will face years in prison, but those who have been touched by them – either directly or indirectly – are dealing with their own issues and demons.

Let me say – the road ahead will not be easy. Trebert and May will likely have a long prison sentence and, I suspect, that Ewing may face ever longer. They (TEM) will change. They will likely feel isolated, alone, hurt and in pain. Holidays won’t be the same and to many their presence will be missed. Most will find that your lifestyles may change – that’s to be expected. That, in and of itself, isn’t easy. Further, you’ll find it strange to talk to TEM, as they will only be allowed to make collect calls. And, it’s possible that their final place of incarceration won’t be near, making visits difficult. The game has changed and all will have to learn to adapt. But, this is a process and healing is possible.

The choices you make today, and tomorrow and the next day, are the choices that will shape your life in the future. Every choice has a consequence and YOU control, by your choices, the future life you live. Make your choices wisely and know that, just like mama said, “You can be somebody!”


GUILTY! Stephen Michael Ewing Has Day In Court Over Massive Payroll Tax Fraud Nursing Home Scheme

March 7, 2008

Every choice has a consequence! Regardless of how well thought out, no one will escape the consequences of their choices. As a business ethics and white collar crime speaker, I know from personal experience that you reap what you sow. While Trebert and others got by with their scheme for 5 years, the reality is the consequences of their actions will be far greater than any benefit they received.

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In an update to a prior report, Gary R. Trebert, age 57, pled guilty to two counts of an indictment that charged him with various offenses related to his operation of nursing homes in Texas and elsewhere. Co-defendant Larry Gordon May pled guilty to his role in the conspiracy in October 2007 and co-defendant Stephen Michael Ewing, a/k/a “Stephen Michaels,” is scheduled to go on trial March 3, 2008.  Today Stephen Michael Ewing was found GUILTY!
Well, Stephen Michael Ewing’s day in court has come and he’s facing what used to be partners who have now become bitter enemies. Gary R. Trebert, a Frisco attorney who was Ewing’s former business partner and turned states evidence as part of a plea deal he reached as he awaits sentencing. Obviously, he is hoping for a downward departure from the sentencing guidelines as he helps the government in its prosecution of Ewing, the only co-conspirator who elected to plead not guilty.

According to trial testimony and a report from the Star Telegram, Trebert’s role involved legal advice relating to the acquisition of nursing homes. Ewing oversaw operations and finances, according to Trebert. Larry May of Hurst, was reportedly a figurehead whose name would be used on nursing home and federal funding applications.

U.S. Attorney Richard Roper said, “This case is the one of the largest payroll tax fraud cases ever prosecuted in the U.S. Mr. Trebert admitted evading more than $34 million in payroll taxes – this is nothing short of egregious. Nursing homes should be safe havens for the elderly and vulnerable, not vehicles for criminals to commit fraud.”

Trebert admitted that beginning in August 1999 and continuing though mid-May 2004, he, Stephen Michael Ewing and Larry May conspired together, and with others, to defraud the U.S. by impeding, impairing, obstructing, and defeating the lawful government functions of the IRS in the ascertainment, computation, assessment, and collection of the revenue, that is, nursing facility employees’ withheld income taxes, social security taxes and medicare taxes, and HHS in the administration of the Social Security Act and the Medicare and Medicaid programs.

Dennis Olson of Dallas, Ewings attorney stated, “You can be present when a crime is being committed and not be guilty of the crime.” Representing his client Olson said Ewing was interested only in a legitimate business and that he alerted federal authorities about the scam.

According to the government’s indictment as part of the conspiracy, Trebert and his coconspirators, using the names of sham corporate entities, obtained control of 70 licensed nursing facilities with thousands of patient beds and thousands of employees. In order to acquire control of these facilities, Trebert, Ewing and May used false statements and false and fraudulent documents including Applications for Nursing Facility License and Medicaid Contracts, Medicare Federal Provider Enrollment applications, ownership documents, IRS Employer Identification Number applications, Health Insurance Benefit Agreements, and Electronic Fund Transfer forms. Their falsifications included falsely identifying relatives as owners, operators, and managers of the nursing homes on the applications; failing to disclose staffing/payroll companies on nursing home applications; failing to disclose Ewing and May as the true owner/operators of nursing homes; and forging names of individuals on filed documents to divert responsibility away from the three defendants. Trebert and his co-conspirators used the false statements and documents to hide from HHS, state licensing and Medicaid agencies, and the IRS, the true control and management of the nursing facilities, their responsibility for more than $200 million in money derived from the nursing homes, and their responsibility for the nursing facilities’ residents.

More than 150 sham staffing/payroll entities, many with foreign business addresses at drop boxes in England and Austria, were created to file Form 941 employer withholding tax returns with the IRS, preventing the IRS from assessing and attempting to collect more than $34 million of unpaid payroll tax liabilities from Trebert, Ewing and May, and creating the appearance that these sham staffing/payroll entities employed more than 4500 nursing facility employees, when they did not. From time to time Trebert caused his coconspirator to fly to London in order to mail to the IRS the sham payroll/staffing companies’ false withholding tax returns.

Trebert admitted that he and his coconspirators diverted to themselves and their personal activities substantial sums of money derived from their nursing home operations and from the non-payment of employees’ withheld payroll taxes. Trebert also admitted that in April 2004, he attempted to evade and defeat the assessment and payment of more than $4,113,000 in withholding taxes taken out of employees’ pay at 42 nursing homes he and his coconspirators controlled.

“Evading employment taxes can have serious consequences for employers and their employees. Trebert’s guilty plea demonstrates that those who willfully attempt to undermine our tax system by playing fast and loose with the rules will be held accountable, regardless of how complicated a scheme they devise,” said Erick Martinez, IRS Special Agent in Charge for the Dallas Field Office.

In the plea agreement, Trebert will spend 8 years in federal prison. The trial results should be forthcoming. Then we will see if the “I just didn’t know” defense will hold up. More to come!


White Collar Crime – A Crazy Week In Texas For The Feds – Comments by Chuck Gallagher White Collar Crime Speaker

March 2, 2008

It happens once every four years – leap year that is. Should that mean anything unusual? Can’t say that I can trace it back four years, but this week this year was especially ripe for white collar crime in Texas. Maybe the federal government is more focused in this arena. Whatever the reason, below you’ll see a brief synopsis of the week in review.

Let’s start in the Southern District for Texas (Houston Area):

Priscilla A. Thomas, age 39, (Houston, TX) plead guilty to mail fraud in connection with a false claim for Hurricane Katrina disaster assistance. Thomas was charged in a three-count indictment relating to three false claims for Hurricane Katrina disaster assistance. The claims were filed on or about Sept. 11, 2005, each falsely claiming primary residence in New Orleans, La., at the time of Hurricane Katrina. Thomas claimed that as a result of damage to her primary residence, she had an essential need for food, clothing and shelter as a result of the storm. Upon filing the claims, Thomas provided a Houston address as her current mailing address where payments were sent and subsequently received.

Uzoma Okechukwu Osuagwu, age 36, was sentenced to over 14.5 years in federal prison for conspiracy to launder funds, procuring U.S. citizenship by fraud and identity theft. Court documents demonstrated Osuagwu obtained stolen confidential bank account and identity information of numerous individuals which was used to transfer funds from the compromised accounts to bank accounts controlled by one of Osuagwu’s co-conspirators. After the funds reached the controlled account, they were withdrawn by check writing, automated teller withdrawals, money order purchases and other financial transactions.

Anthony D. Thurman, age 26, (Houston, TX) plead guilty to one count of health care fraud and one count of conspiracy. Thurman is the final defendant to plead in a three-defendant case, involving his mother, Sandra Thurman Patino, 44, and his cousin, Katrice Oliver, 25. Patino and Oliver will be sentenced in August. All three defendants helped run two Houston durable medical equipment (DME) companies, Thurman Family Medical Services and Seniors Comfort & Caring Medical Services. From 2002 through 2003, these two companies billed Medicare for DME, primarily for motorized wheelchairs and related accessories, but delivered less expensive scooters. A motorized wheelchair and its accessories were reimbursed at a rate of approximately $5,000 in this time frame, while a scooter’s cost was approximately $800-1,200 wholesale. In all, the two companies billed Medicare approximately $3.9 million and were paid approximately $2.6 million.

Agustin Dovalina III, the former chief of the Laredo Police Department (LPD), was sentenced for committing Hobbs Act extortion. The government’s evidence showed that on or about January 2006, with Sgt. Alfonso Santos acting as the middleman, the (cooperating witness) CW provided Chief Dovalina funds to pay for golf tournament fees and golf equipment. As the relationship progressed, when Dovalina needed funds, Santos would arrange lunch meetings between the CW and Dovalina. Dovalina received $5,000 June 22, 2006, from the CW for personal expenses and a second $5,000 payment Sept. 25, 2006, both of which were captured on audio and videotape. On Nov. 8-9, 2006, Dovalina met the CW for lunch, and through Santos and Lt. Eloy Rodriguez, thereafter received two $1,000 bribe payments from the CW. Dovalina’s lunch meeting with the CW prior the delivery of the two $1,000 bribe payments was also captured on audio and videotape. The recordings prove that in exchange for the bribe payments, Dovalina offered, among other things, to re-divide the sectors at LPD to keep Rodriguez and Santos in their positions to oversee the CW’s illegal eight-liner business, and to close down a competitor of the CW’s business.

Edward E. Villarreal, 53, of Corpus Christi, has been sentenced for accepting a $5,000 bribe. Villarreal was an engineer technician in the Public Works Department at the Naval Air Station in Corpus Christi. He pleaded guilty Dec. 19, 2007, for accepting a $5,000 bribe in exchange for recommending Contract Construction and Fence Company (CCFC) for a fencing contract in the amount to $153,000 at the Naval Air Station. The bribe was paid in two installments during meetings with agents of CCFC, the second of which was captured on audio.

Sharif J. Reid, 33, has pleaded guilty to one count of conspiracy to commit credit card fraud and one count of credit card fraud. Reid admitted he participated in a 17-month conspiracy with several other individuals, including Nandasharie Shivmangal, 31, to commit credit card fraud through the use of counterfeit credit cards in names other than his or Shivmangal’s. The FBI and League City Police Department conducted a search of Reid’s residence, Sept. 7, 2007, resulting in the seizure of approximately 100 counterfeit cards, two cash register rolls with approximately 1800 additional credit card numbers, counterfeit drivers licenses, a document shredder, a bag of shredded credit cards and approximately $300,000 in electronic equipment, gold and diamond jewelry, designer clothing and shoes. Reid further admitted he and Shivmangal deposited more than $505,000 in cash from April 2006 through September 2007 into bank accounts under their control.

A former United States Postal employee has pleaded guilty to five counts of mail fraud. Dwayne Mickens, 37, of Deer Park, Texas, began his employment with the USPS in 1992 as a temporary employee until his service became permanent in 1999. Once he became a permanent employee, he was continually employed by the USPS until July 27, 2007. However, from June 1997 through February 2007, Mickens misrepresented his earning to the (Texas Workforce Commission) TWC, and, as a result, was over-paid $43,878 in unemployment insurance benefits, to which he was not entitled.

Kretia Griffin, 39, and Aubry Johnson, 35, have been sentenced for their roles in an identity theft scheme that resulted in actual losses of more than $184,000. Agents with the United States Secret Service became aware of the scheme in September 2006 when loss prevention investigators with Target Corporation provided store video surveillance tapes of various individuals opening and using new Target VISA accounts. All of the accounts had been opened with the unauthorized use of other individuals’ Social Security numbers. In February 2007, Johnson and another individual were arrested when the other individual used a stolen identity, including another person’s Social Security number, to open an instant credit account at Wal-Mart. In the vehicle with Johnson at the time of his arrest were 26 pieces of paper containing the personal identifiers of 26 different individuals with the same name as the personal identity used to open the Wal-Mart account. The papers appeared to have medical billing information and were subsequently traced back to the Kelsey-Seybold Medical Group business office. The director of operations identified Kelsey-Seybold employee Griffin as the person who had accessed the billing account information without authorization. When interviewed by Secret Service agents, Griffin confessed to having accessed the account information for approximately two years and to providing the information to Johnson in return for cash.

Wow…that’s a lot for just one week and that’s in the Southern District alone…!

Now Let’s move to the Northern District for Texas (DFW Area):

Gary R. Trebert, 57, pled guilty to two counts of an indictment that charged him with various offenses related to his operation of nursing homes in Texas and elsewhere. Trebert admitted that beginning in August 1999 and continuing though mid-May 2004, he, Stephen Michael Ewing and Larry May conspired together, and with others, to defraud the U.S. by impeding, impairing, obstructing, and defeating the lawful government functions of the IRS in the ascertainment, computation, assessment, and collection of the revenue, that is, nursing facility employees’ withheld income taxes, social security taxes and medicare taxes, and HHS in the administration of the Social Security Act and the Medicare and Medicaid programs. U.S. Attorney Richard Roper said, “This case is the one of the largest payroll tax fraud cases ever prosecuted in the U.S. Mr. Trebert admitted evading more than $34 million in payroll taxes – this is nothing short of egregious. Nursing homes should be safe havens for the elderly and vulnerable, not vehicles for criminals to commit fraud.”

Following 20 minutes of deliberation, a federal jury in Dallas has convicted James L. Fantroy, Sr., a former Dallas City Council Member and a former member of the Board of Directors and Treasurer of Paul Quinn College Community Development Corporation (Paul Quinn CDC) in Dallas, on an indictment that charged him with one count of embezzlement and theft from a program receiving federal funds. From April 26, 2003, through July 30, 2003, James L. Fantroy, Sr., acting as an agent for Paul Quinn College, embezzled approximately $21,000 in monies held in trust for Paul Quinn College.

A 14-count federal indictment was unsealed today that charges Amarillo, Texas, resident, John Joseph Baumgartner with several felony offenses related to a mortgage fraud scheme. Baumgartner, 45, was arrested without incident on those charges at the Pantex Plant in Amarillo, where he is employed by the National Nuclear Security Administration. The indictment alleges that in September 2006, Baumgartner applied for and obtained an $840,000 conventional, cash-out refinance mortgage for a property located at 1022 South Wilton Place in Los Angeles. As part of the scheme, Baumgartner falsely represented that he was purchasing the Wilton Place property as his current and primary residence. Baumgartner misrepresented his income and retirement account funds and misrepresented that he had rental property on Briarwood Drive in Amarillo that generated $1700 per month in rental income. When Baumgartner obtained the refinancing funds, he didn’t use them in the manner he represented in his application for refinancing, but instead diverted the bulk of the funds to a casino account at Caesar’s Palace in Las Vegas.

SUMMARY:

Of the items mentioned above 27% are female and 73% are male. 13% of the folks either indicted or convicted of white collar offenses are in their 20’s; 47% are in their 30’s; and 20% are in either their 40’s or 50’s. And, based on the brief summary above, they come from all walks of life.

 

 

 

Perhaps, if there were a way to have effective communication, the message that every choice has a consequence would be highly appropriate. As a speaker, and having been there myself, I know the challenges these individuals are and will be facing soon. Perhaps, their loss now, will prove to be a learning environment and allow them to be productive in the future.

One thing is for sure…each day we get the chance to choose! Make choices wisely.

_______________________________________________________________________

On a crisp October day in 1995, I took 23 physical steps… opened a door… and began a new experience that was life-changing. In a style that is far more vulnerable than most motivational keynote speakers, I share the painful lessons of life with my audience and touch them forever.

My Poignant, High-Energy, Thought-Provoking and Honest Motivational Presentations Show Organizations how to:

  • Transform self-limiting beliefs into personal and organizational success
  • Help employees increase ethics awareness and reduce fraud
  • Understand the effect of choices on their personal and professional lives

Every choice has a consequence! Do your employees make the best choices for your company – or for themselves? Most organizations are vulnerable to unethical activities at any level. My message, as a keynote business ethics speaker, crystallizes, for those who hear, the critical importance of making the right choices and the positive results that can follow…a must for those who want to promote individual and organizational integrity in the workplace.

For information on how I can help your organization in a positive and meaningful way – contact me through www.chuckgallagher.com. Talk to you soon!


$34 Million Dollar Payroll Tax Fraud By Texas Nursing Home Executive!

February 27, 2008

U.S. Attorney Richard Roper said in a recently issued news release, “This case is the one of the largest payroll tax fraud cases ever prosecuted in the U.S. Mr. Trebert admitted evading more than $34 million in payroll taxes – this is nothing short of egregious. Nursing homes should be safe havens for the elderly and vulnerable, not vehicles for criminals to commit fraud.”

Gary R. Trebert, age 57, pled guilty to two counts of an indictment that charged him with various offenses related to his operation of nursing homes in Texas and elsewhere. Co-defendant Larry Gordon May pled guilty to his role in the conspiracy in October 2007 and co-defendant Stephen Michael Ewing, a/k/a “Stephen Michaels,” is scheduled to go on trial March 3, 2008.

Trebert admitted that beginning in August 1999 and continuing though mid-May 2004, he, Stephen Michael Ewing and Larry May conspired together, and with others, to defraud the U.S. by impeding, impairing, obstructing, and defeating the lawful government functions of the IRS in the ascertainment, computation, assessment, and collection of the revenue, that is, nursing facility employees’ withheld income taxes, social security taxes and medicare taxes, and HHS in the administration of the Social Security Act and the Medicare and Medicaid programs.

As part of the conspiracy, Trebert and his coconspirators, using the names of sham corporate entities, obtained control of 70 licensed nursing facilities with thousands of patient beds and thousands of employees. In order to acquire control of these facilities, Trebert, Ewing and May used false statements and false and fraudulent documents including Applications for Nursing Facility License and Medicaid Contracts, Medicare Federal Provider Enrollment applications, ownership documents, IRS Employer Identification Number applications, Health Insurance Benefit Agreements, and Electronic Fund Transfer forms. Their falsifications included falsely identifying relatives as owners, operators, and managers of the nursing homes on the applications; failing to disclose staffing/payroll companies on nursing home applications; failing to disclose Ewing and May as the true owner/operators of nursing homes; and forging names of individuals on filed documents to divert responsibility away from the three defendants. Trebert and his co-conspirators used the false statements and documents to hide from HHS, state licensing and Medicaid agencies, and the IRS, the true control and management of the nursing facilities, their responsibility for more than $200 million in money derived from the nursing homes, and their responsibility for the nursing facilities’ residents.

More than 150 sham staffing/payroll entities, many with foreign business addresses at drop boxes in England and Austria, were created to file Form 941 employer withholding tax returns with the IRS, preventing the IRS from assessing and attempting to collect more than $34 million of unpaid payroll tax liabilities from Trebert, Ewing and May, and creating the appearance that these sham staffing/payroll entities employed more than 4500 nursing facility employees, when they did not. From time to time Trebert caused his coconspirator to fly to London in order to mail to the IRS the sham payroll/staffing companies’ false withholding tax returns.

Trebert admitted that he and his coconspirators diverted to themselves and their personal activities substantial sums of money derived from their nursing home operations and from the non-payment of employees’ withheld payroll taxes. Trebert also admitted that in April 2004, he attempted to evade and defeat the assessment and payment of more than $4,113,000 in withholding taxes taken out of employees’ pay at 42 nursing homes he and his coconspirators controlled.

“Evading employment taxes can have serious consequences for employers and their employees. Today’s guilty plea demonstrates that those who willfully attempt to undermine our tax system by playing fast and loose with the rules will be held accountable, regardless of how complicated a scheme they devise,” said Erick Martinez, IRS Special Agent in Charge for the Dallas Field Office.

In the plea agreement, Trebert will spend 8 years in federal prison. Needless to say, when sentenced, Trebert will also be facing substantial restitution – which he may not be able to repay.

Every choice has a consequence! Regardless of how well thought out, no one will escape the consequences of their choices. As a business ethics and white collar crime speaker, I know from personal experience that you reap what you sow. While Trebert and others got by with their scheme for 5 years, the reality is the consequences of their actions will be far greater than any benefit they received.

Your comments are welcome – as you might have been a victim of this massive scam. But let me leave you with this – before you make a choice consider what is the worst thing that could happen – feel what that would feel like – then make your choice. Trust me, the consequences to negative choices are far worse than any gain you can imagine!