Is it a crime to swindle someone out of company ownership?
September 28, 2009 – 8:56 pm
speakeasy asked:
Todd Fisher, CEO of iParq.com, enticed a contractor to become an employee in exchange for a four year vested ownership position in the company that would generate residual income. Todd filed K-1 tax forms with the IRS to give the employee con-fidence that the deal was real. When fully vested (and the software development completed), Todd simply instructed his tax preparer to stop filing K-1 forms, essentially swindling the employee.
Todd Fisher, CEO of iParq.com, enticed a contractor to become an employee in exchange for a four year vested ownership position in the company that would generate residual income. Todd filed K-1 tax forms with the IRS to give the employee con-fidence that the deal was real. When fully vested (and the software development completed), Todd simply instructed his tax preparer to stop filing K-1 forms, essentially swindling the employee.
Is this a criminal offense? Would it be a Federal crime since Todd used the IRS as a tool to defraud the employee?
Egbert
3 Responses to “Is it a crime to swindle someone out of company ownership?”
Failure to file is punishable by the IRS. They begin with penaly and interest. If they suspect fraud and then prove it, jail time follows.
If he was receiving a K-1, that means he was a partner. Partners are supposed to receive K-1’s, so he should notify the company and if he gets no satisfaction, notify the IRS. They will look into it. Tell him to notify the criminal division.
By KDCCPA on Sep 29, 2009
need to check with an attorney. sounds like it, but it could have been done legally without any kind of legal documentation. (contracts ,etc……). and yes…… it would be a federal offense.
By andy h. on Sep 30, 2009
The ownership and the K-1s are independent. The failure to file the K-1’s does not absolve the employee of any ownership position. BUT the agreement in regard to that ownership position had better be on paper and not just word of mouth, or any agreement for such an exchange might be barred by the Statute of Frauds.
By shellanswerman on Oct 1, 2009