Labor Bars Employer Who Engaged in Extensive Fraud

Local
Monday, May 18, 2009

Labor bars employer who engaged in extensive fraud

By Ferdie de la Torre
Reporter

The Department of Labor has barred an employer from employing alien workers in the CNMI for a two-year period for engaging in extensive fraud in operating his businesses.

Labor Administrative Hearing Officer Jerry Cody referred its order against Soleman (his name and last name) to the Division of Revenue and Taxation.

“The evidence establishes a systematic pattern of fiscal mismanagement, neglect of business by this owner, and extensive fraud with respect to the issuance of sales receipts. Such business practices render any income and expense figures completely unreliable,” Cody said.

As of the date of the Labor hearing on June 3, 2008, Soleman operated a barracks rental, land clearing, charcoal manufacture and sale, and commercial cleaning.

The charcoal business was known as “Dajets Island Charcoal & Lime.”

Cody, however, allowed 10 employees of Soleman to seek new employers. Aalthough it is likely that some of these workers' jobs were mere sponsorships, he said the fact remains that other workers, in fact, produced charcoal for Soleman.

Cody said Labor did not examine individual workers to establish which of them have engaged in sponsorship versus legitimate charcoal manufacture.

“Therefore, the Hearing Officer finds that all workers should be granted transfer relief at this time,” he added.

According to Labor records, Soleman began employing or attempting to hire an increasing number of workers as “charcoal makers” for his charcoal business.

Soleman claimed that his charcoal business-making business was profitable and that he needed all of these workers to maintain and increase the capacity of his land clearing and charcoal businesses.

In April 2008, the Labor director denied a number of transfer applications submitted by Soleman due to failure to comply with a deficiency notice; income not justifying an additional hiring; salary records showed that not all workers are being paid; and suspected sponsorship.

Soleman and the 11 workers appealed.

Cody said that at the hearing, Soleman produced a number of sales receipt books regarding his charcoal sales.

Cody said the Labor director's examination showed that numerous entries in the books had been altered to make it appear that a greater number of bags of charcoal had been delivered and a greater amount of cash had been collected.

To document the fraud, the director obtained affidavits signed by the customers themselves attesting to the actual numbers of charcoal bags they had purchased and the prices they paid.

With respect to tax records, Cody said Soleman admitted under oath that he intentionally falsified the amount of revenue he claimed to have received in an attempt to reduce his tax payments.