Are you involved in this sort of thing??

Discussion in 'Lawn Mowing' started by LwnmwrMan22, Mar 29, 2008.

  1. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

  2. LIBERTYLANDSCAPING

    LIBERTYLANDSCAPING LawnSite Bronze Member
    from Indiana
    Posts: 1,283

    Link doesn't work????
     
  3. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    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.
     
  4. Ed Ryder

    Ed Ryder LawnSite Senior Member
    Posts: 541

    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...
     
  5. mngrassguy

    mngrassguy LawnSite Silver Member
    Posts: 2,167

    "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:
     
  6. CFB

    CFB LawnSite Senior Member
    Posts: 515

    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.
     
  7. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    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.
     
  8. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    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.
     
  9. Atlantic Lawn

    Atlantic Lawn LawnSite Senior Member
    Male, from Outer Banks NC
    Posts: 940

    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.
     
  10. Jason Rose

    Jason Rose LawnSite Fanatic
    Posts: 5,858

    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.
     

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