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LwnmwrMan22
03-29-2008, 06:20 PM
Landscaper is going to jail (6 months, maybe) for billing companies for work at private residences.

There's a couple of people mentioned in the story that are involved in the post I had last week "would you walk away from this account?".

http://www.twincities.com/localnews/ci_8734986?nclick_check=1

LIBERTYLANDSCAPING
03-29-2008, 06:30 PM
Link doesn't work????

LwnmwrMan22
03-29-2008, 06:40 PM
Link doesn't work????

Landscaper admits guilt in scheme

The landscaper to the Twin Cities' elite pleaded guilty in federal court Friday to a charge that he helped some clients evade paying more than $80,000 in taxes.

With short, direct answers to questions from a judge and prosecutor, Luther Hochradel, 60, the former owner of Windsor Landscaping of Maplewood, admitted in court that he was involved in the scheme over a four-year period.

The scheme was simple: Windsor did landscaping work at the homes of some high-powered executives, then provided fraudulent invoices so the executives could bill the work to their companies or even to their clients.

Federal investigators say some Windsor customers who benefited from the scheme included former UnitedHealth Group CEO Bill McGuire; William and Ross Sandison, the CEO and president, respectively, of Community National Bank; and Gary Hook, a former executive vice president of Kraus-Anderson Cos., a major construction company.

Hochradel is the only one who has been charged.

Lawyers for the Sandisons have said the bankers paid for the landscaping and did nothing wrong. McGuire's attorney has said his client did nothing wrong. Previously, Hook's lawyer declined to comment. On Friday evening, he could not be reached.

In a plea bargain with the U.S. attorney's office, Hochradel pleaded guilty to a single charge of "misprison of a felony." In lay terms, he knew a crime was being committed, concealed it and "did not as soon as possible make known the same to some judge or other person in civil or military authority," the charge against him reads.
Hochradel is a member of the Dellwood Country Club and, wearing a dark suit and shirt with no tie, and standing 6-foot-5, he was the tallest person in the courtroom of U.S. District Judge Joan N. Ericksen. To assure herself that Hochradel knew what he was pleading to, the judge asked him a number of questions, to which he quickly replied, "Yes, your honor," or "No, your honor" or "I do."

He paused only when she asked him if he'd had any alcohol to drink in the previous 24 hours. He said he hadn't.

"You didn't have a beer last night?" Ericksen asked.

Hochradel said he didn't but that he had had to stop and think about it.

"Did anybody force you to commit the crime?" she asked.

"No, your honor," he replied.

The one-page charge against Hochradel provides few details of the crime. But a 10-page affidavit filed by a federal postal inspector, Mary Agnew, details a number of the allegations. The investigation started by happenstance: Federal authorities were looking into possible mail fraud involving a development known as Ramsey Town Center when they came across questionable landscaping invoices in the records of the development's financier, Community National Bank of North Branch.

In her affidavit, Agnew said that when authorities questioned Hochradel, he denied ever doing work at a private residence and then billing it to a business.

But among those claiming the opposite was Brandi Werra, a Windsor employee who also happened to be the daughter of Laurie Vadnais-Hochradel, who was then Hochradel's estranged wife. According to Agnew's affidavit, "Werra was aware of personal work done by Windsor Companies at personal homes, including the residences of some Kraus-Anderson Midwest executives, which work was then billed to other jobs."

Among them was the Woodbury home of Hook, who is no longer with the company.

"The Windsor invoices for the work done at Hook's residence were printed up and put into other Kraus-Anderson landscape jobs," Agnew claimed.

McGuire, who was ousted from UnitedHealth Group in 2006 after controversy over backdated stock options, "was never charged full price for work Windsor did for him" at his homes in Orono and Wayzata, Agnew said in her affidavit.

Another Windsor employee who Agnew said was aware of the alleged improprieties was Kami Hansen, who is Hochradel's daughter.

"Hansen also stated the billing practice probably 'happened a lot,' " Agnew wrote. "Hansen said she did what she was told to do with Windsor invoices by her father, Hochradel, and added that within the last three years she stopped questioning Hochradel about the invoices."

Hochradel will be sentenced later; no date was set.

Misprison of a felony is itself a felony and can carry a maximum punishment of up to three years in prison and a $250,000 fine. But lawyers believe that because Hochradel has no prior criminal record and because he has cooperated with authorities, he could get a maximum sentence of up to six months imprisonment and could be ordered to pay restitution.

Ed Ryder
03-30-2008, 02:11 AM
Wow!

I had no idea this was something that could get a lawn guy in trouble?

This guy is going to jail?!

It sounds crazy.

I don't understand how a government can throw this guy in jail for this?

If a grass cutter has a customer that wants one bill for his residential and commercial properties, and he pays the whole thing with his company check, why should the grass cutter be at risk of being a defendant in a criminal case?

What the hell?

How is the lawn service provider supposed to know if screwy accounting is going on that is meant to cheat the tax authorities? It's the customer's problem as far as I'm concerned.

But this case shows that to think this way is wrong. And we can't in any way be complicit in the slightest tax avoidance measures.

Man, from now on - if I get a customer who gives me the slightest hint that he is trying to avoid taxes by getting me to combine home residence and business property work in one bill - forget it. I'm not going to do it! I don't need that grief.

Holy cow...

mngrassguy
03-30-2008, 02:53 AM
"Agnew said that when authorities questioned Hochradel, he denied ever doing work at a private residence and then billing it to a business."

No, he got in trouble for lying about it.:laugh:

CFB
03-30-2008, 03:04 AM
Hmm. I have a commercial account that I also do there residence. They asked me to bill both to the bisuness. I'm not going to worry about as they are both just $60/week.

But, this is interesting.

Richard Martin
03-30-2008, 06:51 AM
I had a customer who wanted me to make the bill out to his business and I said "no problem". The "bill to" was his company but the "serviced at" was his home address. I have and still do get paid with company checks for services rendered at homes but the invoices always give the real address for where the service is performed. I will not be a part of someone else's attempt to tax evade.

LwnmwrMan22
03-30-2008, 07:12 AM
I had a customer who wanted me to make the bill out to his business and I said "no problem". The "bill to" was his company but the "serviced at" was his home address. I have and still do get paid with company checks for services rendered at homes but the invoices always give the real address for where the service is performed. I will not be a part of someone else's attempt to tax evade.

I personally have done work at a residence of one of the people mentioned in this article.

For 2 years I've done the chemical applications there. Both times I sent an invoice to the bank, but the invoice was in the name of the person, as well as their address on it.

I just figured it was the way the guy could get around to telling his wife how much he was or wasn't paying to have the work done.

The first time, it was paid with a bank check, which as the guy is the vice-president of the bank, I didn't think much of it, that maybe they just did it this way and then deducted it from his pay, whatever. I don't care how I get paid, as long as from my end of it, it's all above the table, and it gets paid.

Then the next time, it was paid with a personal check. Now that I see all this in the paper, I have a feeling they were already under scrutiny.

Atlantic Lawn
03-30-2008, 07:31 AM
It's all about the numbers if they're big enough then it becomes interesting for a prosecutor, the landscaper really just caught up in a net that was after much bigger fish.

Jason Rose
03-30-2008, 08:09 AM
I do one like this too, but I also mow at the "business" as well. I figure it's HIS ass on the line if he gets caught, I was told to combine his house mowing and the business on one bill and send it. It's not a personal business either. I get paid, so I'm happy, and they send me a 10-99 at the end of the year, so I know he's at least writing me off.

topsites
03-30-2008, 08:33 AM
Well it ain't right but the way things have been with the economy and things getting harder every year sometimes folks maybe they got greedy or maybe they just couldn't make ends meet... I don't know but I ain't judging nobody lord knows I got stories I could tell so just wish them the best of luck and DON'T DO THAT, 'k...

bill w
03-30-2008, 08:37 AM
A lot of high end jobs have incentives like housing, car, etc. that would be paid with the corporate check. Billing the company is not necessarily collusion in tax evasion.

Frontier-Lawn
03-30-2008, 09:56 AM
Wow!

I had no idea this was something that could get a lawn guy in trouble?

This guy is going to jail?!

It sounds crazy.

I don't understand how a government can throw this guy in jail for this?

If a grass cutter has a customer that wants one bill for his residential and commercial properties, and he pays the whole thing with his company check, why should the grass cutter be at risk of being a defendant in a criminal case?

What the hell?

How is the lawn service provider supposed to know if screwy accounting is going on that is meant to cheat the tax authorities? It's the customer's problem as far as I'm concerned.

But this case shows that to think this way is wrong. And we can't in any way be complicit in the slightest tax avoidance measures.

Man, from now on - if I get a customer who gives me the slightest hint that he is trying to avoid taxes by getting me to combine home residence and business property work in one bill - forget it. I'm not going to do it! I don't need that grief.

Holy cow...

So i quess if one cuts a clients rental property and also there home and send them one bill its against the law. :laugh:

grasschopperofchicago
03-04-2009, 12:08 AM
Wow!

I had no idea this was something that could get a lawn guy in trouble?

This guy is going to jail?!

It sounds crazy.

I don't understand how a government can throw this guy in jail for this?

If a grass cutter has a customer that wants one bill for his residential and commercial properties, and he pays the whole thing with his company check, why should the grass cutter be at risk of being a defendant in a criminal case?

What the hell?

How is the lawn service provider supposed to know if screwy accounting is going on that is meant to cheat the tax authorities? It's the customer's problem as far as I'm concerned.

But this case shows that to think this way is wrong. And we can't in any way be complicit in the slightest tax avoidance measures.

Man, from now on - if I get a customer who gives me the slightest hint that he is trying to avoid taxes by getting me to combine home residence and business property work in one bill - forget it. I'm not going to do it! I don't need that grief.

Holy cow...

i know this has been posted some time ago, but the point you all missed is, HE WAS MAKING UP FRADULENT invoices!---it wasn't how he was billing, but rather that he billed made up over priced invoices to write off the expense or pass it on to other customers....not because he got paid for 2 accounts with one check----example!!----he does $20k in work in the season, but makes an invoice up for $100k so they guy can lower his tax liability because he now has $80K more expense...for those of you who OBVIOUSLY Missed this try this scenario...you have your cost to cut at $60, and you write off $31,000 in gas to get to that account on your taxes and the gas station WRITES you the receipt for the $31k to submit to your accountant...problem with this idiot is, if he made fake invoices, it was so easy to catch because he wouldn't be showing it as income on his taxes!

topsites
03-04-2009, 01:30 AM
No way, it takes 10 times the effort to build trust than it does to destroy it, just not worth it.

How is the lawn service provider supposed to know if screwy accounting is going on that is meant to cheat the tax authorities? It's the customer's problem as far as I'm concerned.

I do agree, but I think it went deeper than that.

LwnmwrMan22
03-04-2009, 01:56 AM
Since I'm the original poster, of this thread and the original thread dealing with the actual customer, I'll clarify.

The landscaper was intentionally creating 2 seperate invoices, one showing the cost the customer was supposed to pay, at a discount, and one showing the cost the work actually cost.

If you dig up the articles, one invoice was for $14,700 +/- for work done at a bank that they had done a renovation project on. There'd be a second invoice that the owner of the bank would get, say $12,700 which he would pay out of his pocket, and then turn in the one for $14,700, so he would get paid $2,000 from the bank.

That, or there would be work done at someone's house, and the homeowner would get an invoice for $2,500, but then there would be a commercial project that the landscaping company was working on that the homeowner was tied into, and they would get a copy of an invoice showing $2,500 in "markups".

This was dealing with fairly major landscape installs / renovations. Entire new construction of parks, renovations of major over hauls of properties, large landscape housing projects, to the tune of $15,000 - 20,000+.

Even with that said, I'm sure there are guys here that deal with businesses where you mow the owner's house as well. You might want to list both addresses on those invoices.

Roger
03-04-2009, 06:33 AM
i know this has been posted some time ago, but the point you all missed is, HE WAS MAKING UP FRADULENT invoices!---it wasn't how he was billing, but rather that he billed made up over priced invoices to write off the expense or pass it on to other customers......

Yes, this is right. It is not a matter of just doing the work and sending the invoice to the company. The first line of the story states clearly, "... fraudulent invoices...." This is why the man got himself into trouble, not because of doing work at a personal residence and getting paid by the company. The landscaper had to know what he was doing was wrong. He is not an innocent bystander, rather an accomplice to the problem. He deserves to get nailed and pay the penalty.

kaferhaus
03-04-2009, 07:48 AM
Yes, this is right. It is not a matter of just doing the work and sending the invoice to the company. The first line of the story states clearly, "... fraudulent invoices...." This is why the man got himself into trouble, not because of doing work at a personal residence and getting paid by the company. The landscaper had to know what he was doing was wrong. He is not an innocent bystander, rather an accomplice to the problem. He deserves to get nailed and pay the penalty.


I agree, but isn't it interesting that the "big fish" all seem to have gotten away with it (the people who were actually profiting from this scheme) and the guy who did the work is the one going to jail?

Further if you ever did anything even similar to this and it made the newpaper you'd never get another commercial job in that city again as no one would want to be associated with you.

We also send some invoices to the client's "office" but as a few other intelligent posters have mentioned the invoices clearly state WHERE the work was done and WHO authorized the work.

Several years ago I got asked by a large developer to submit a invoice showing several thousand dollars of charges over and above what the work was going to cost and give him a "legit invoice". He had partners in the development but he called the shots. His plan was obviously to cheat his partners out of the difference in the two prices. Fortunately for me he didn't do this until after we had completed the work and I told him the invoice had already been sent to the bank. (it hadn't but it was all I could think to say at the moment)

He was "caught" over a year ago by none other than a "sales tax audit" that was "random" (it's how they do them here unless they have evidence) In those audits they pick through invoices and then match them against the company that issued them.... that's when some underpaid public servant noticed someting wasn't right as invoices and materials were not the same.

Anyway that brought in a "team" of auditors. Few months later he and over a dozen contractors (general, roofing, paving etc.etc) were all arrested. His partners sued him AND the contractors.

Now here's the sad part. He lost his license (the theif), all the contractors were convicted and given suspended sentences (fined out the ass).

The contractors all went BK, no bank would finance anything they were involved in, the bonding companies refused to issue bonds to any company that employed them (1 committed suicide) They lost the lawsuit brought by the developers partners and because it was "fraud" bankruptcy did not protect their homes.....

The developer? NO conviction, lost his license, lost the lawsuit but only had to pay restitution, attorney fees and interest. Promptly opened a "consulting company" and still lives in a multi million dollar home.

So the little guys (relatively speaking) took the biggest fall. Seems it always works out that way.

grassman177
03-04-2009, 08:40 AM
we have had these requests in the past but now avoid them and i guess this is a good reason too!!!!

Roger
03-04-2009, 08:45 AM
we have had these requests in the past but now avoid them and i guess this is a good reason too!!!!

... to make fraudulent invoices?

Lawnhunter66
04-07-2009, 03:16 PM
Well it's about time you all figured this out, (a year later) .

LwnmwrMan22
04-22-2009, 08:21 PM
My two clients that were involved have now been indicted.

29 felony counts.

http://www.startribune.com/business/43465202.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUX

Three top executives with Community National Bank in North Branch were charged today in a 29-count federal indictment with organizing a scheme to defraud financial institutions and obtain money in connection with a $35 million loan to the Ramsey Town Center.

William Garfield Sandison, 65, president of Community National Bank; his son, Ross William Sandison, 42, a vice president at the bank; and Curtis Alan Martinson, 53, a senior vice president, face charges of conspiracy, bank fraud, mail fraud, misapplication of bank funds and money laundering.

According to court documents, Community National solicited other financial institutions to participate in financing the Ramsey Town Center development, a 320-acre mixed-use development, by lending $35 million with the option of extending $15 million more in credit. Community National, as the lead bank, assumed responsibility for administering the $35 million loan on behalf of the other banks.

The indictment alleges that prior to soliciting the other banks, the defendants, along with Community National, had loaned Ramsey Town Center developer Bruce Nedegaard about $3 million and failed to disclose this to the participating banks. The defendants also allegedly failed to disclose that they jointly owned a business with the Nedegaard called Powerhouse Title.

Bill Sandison's attorney, Mark Larsen, said that his client is innocent and that he doesn't want to try the case in the press, unlike the U.S. government. "We will try this case in the courtroom," Larsen said. Sandison no longer works at Community National Bank but the bank is "alive and well and well capitalized," he said. City officials in Ramsey had hoped the Town Center project would create a pedestrian-friendly downtown with homes and parks. But the project went bust amid the downturn in the housing market.

I don't think I'll be doing the fertilizer application at the house this spring.

For what it's worth, how many of you have had your services listed in a Grand Jury indictment?m:rolleyes: