Sucky Restraunteur is Sucky (Still)

[Ghel]

The restaurant owner, "Betty," from this thread is up to her tricks again (some old tricks, some new). Yes, that thread is 5 years old.

A few months ago, we learned that she wasn't paying the taxes out of her employees' paychecks again, and so she had state and federal tax liens again. And she's been overdrawn a lot lately, so we're unable to cash payroll checks. So her employees are mad at us and her. (At least some of them seem to realize it's Betty's fault.)

She finally got insurance about a year ago, but she's been late paying the premiums. There's been at least 3 times in the past year that we've received notices from her insurance that there was an uncovered period of several weeks when here insurance wasn't in force. One of these days, her luck is going to run out and somebody's going to get hurt in the restaurant. If it's during one of those times that she doesn't have insurance, she's done.

One good thing, though. The last time we extended her loan, we convinced her to do automatic payments out of her checking account. As long as she isn't overdrawn, her loan gets paid. We don't have to worry about "taking" payments. This doesn't mean that her loan is getting paid down, though, since we also had to add to the loan to pay real estate taxes again.

Now, I mentioned new tricks. Lately, she's been writing checks to herself and putting them into her deposit as a way to make it look like her balance is higher that day. We keep catching her doing it. We keep telling her she can't do that. And yet, she still keeps doing it. It's like kiting, only she's only using one account to do it. I don't know how she expects to get away with it.

In the previous thread, I talked about how the people delivering food would come to the bank to cash the check before unloading food into the restaurant. Now, Betty somehow comes up with the cash to purchase a money order on delivery days.

Today's payday for Betty's employees. That's what made me think to post this - we've had a couple employees of hers come through the bank and leave angry.

[Raveni]

Isn't check kiting bank fraud? What are the consequences for this (with your bank, not the law)? Also, isn't it kinda useless when you're using just one account?

[Rainman]

Is this restaraunt her only source of income? Because MAN it sounds like she is bad at that line of work and its just getting worse and worse for her as time goes on.

[Ghel]

Yes, kiting is fraud. We could file a police report if there was another account involved, but she's only doing it with the single account. So it's easy to see that she's doing it. The only real consequence for her, so far, is that we take those checks out of her deposit, so it doesn't look like she has more money in the account than she does.

Her husband does seasonal work as a logger, so they have some other income. But they seem to be spending beyond their means. They take long vacations and trips to the casino. (Which wouldn't be a problem of itself, except that they can't afford it.)

[Merriweather]

You would think there'd be somewhere the employees could go to file charges against her for not being paid. If that isn't a crime, it should be.

[MadMike]

Also, isn't it kinda useless when you're using just one account?

About 20 years or so ago, back before I knew any better, I did it a few times when it was a day or two before pay day and I needed money. I'd write a check to myself, deposit it in the ATM, and then withdraw the cash. I had direct deposit, and back then, it took two days for checks to clear.

After I had been doing this for a couple months, I got a letter from my bank telling me not to do that anymore. I doubt something like that would work today, since checks clear a lot quicker than they did back then.

[Ghel]

She sometimes pays them out of the till. We see payroll checks signed over to her in her deposits once in a while. This isn't quite the same thing as I talked about in the OP. It would be ok, except the reason she's doing it is that her account is overdrawn.

I think the only reason she still has employees is because it's very difficult to find a local job right now. If other places were hiring, I doubt she'd have any employees left.

[BrenDAnn]

Ghel, you answered my question before I asked it. I was wondering why anyone in their right mind was working for her. I'll bet her turnover rate is pretty damn high, though, regardless.

[PepperElf]

She sometimes pays them out of the till. We see payroll checks signed over to her in her deposits once in a while. This isn't quite the same thing as I talked about in the OP. It would be ok, except the reason she's doing it is that her account is overdrawn.

I think the only reason she still has employees is because it's very difficult to find a local job right now. If other places were hiring, I doubt she'd have any employees left.

If she's paying employees in cash that's a big warning sign right there.

One of my second retail jobs was in a dump of a discount store that paid us in cash. Not surprisingly they went tits-up within a year or two after I left.

and yes... i think the employees have a LOT of leverage if her payroll checks aren't worth the paper they're written on. They're not slaves.

[taxguykarl]

If she's paying employees in cash that's a big warning sign right there.

Sounds to me like Betty was, hypertechnically, cashing employee checks out of the till...nothing illegal, immoral or fattening there, so long as she is paying the taxes she is withholding.

She sometimes pays them out of the till. We see payroll checks signed over to her in her deposits once in a while.

Still, that does not sound like she is, in fact, paying the required payroll taxes...that would suck big time as the individual is ultimately responsible for the tax payments. It's worth noting that, tax debts can't be discharged in bankruptcy.

i think the employees have a LOT of leverage if her payroll checks aren't worth the paper they're written on. They're not slaves.

all the more reason to cash the checks out of the till whenever possible.

[sirwired]

If the employees are being paid in cash, there's a near 100% certainty that she isn't withholding. Which isn't necessarily bad for the employees since it's the employer's job to do this, and the employer (not the employee) is liable for that withholding if the withholding appears on the pay statement attached to the rubber check. But what IS bad for the employees is the fact that this means Social Security and Medicare also aren't being withheld. And I really doubt Workmen's Comp or Unemployment is being paid either.

If I was a disgruntled soon-to-be-ex employee, I'd totally be turning her in to every govt. agency I could think of. There's so many to choose from with such a worthless business owner, and almost any one of them has the power to shut her down.

[kpzra]

I worked at a restaurant that would let us cash our payroll checks out of the till, if there was enough. We just signed it over and took cash. The check was the same as what we would have taken to the bank, with taxes and what not taken out. It made it nice if it was a long weekend and the bank was closed on Monday. Or if your car is in the shop a block away and your bank is 5 miles away and you worked 10 hours on your feet all day.

[PepperElf]

Sounds to me like Betty was, hypertechnically, cashing employee checks out of the till...nothing illegal, immoral or fattening there, so long as she is paying the taxes she is withholding.

Never said it was illegal or immoral.

It is however, in my book, a warning sign. That sign being "beware of sinking ship".


Or in plain words... if their payroll checks are bouncing and they have to pay people out of the till, chances are the business is about ready to go under.

[Ghel]

Still, that does not sound like she is, in fact, paying the required payroll taxes...that would suck big time as the individual is ultimately responsible for the tax payments. It's worth noting that, tax debts can't be discharged in bankruptcy.

As I mentioned in the OP, she has a tax lien against her again. I guess I could have been more specific, though. The tax lien isn't because of her taxes. It's because she's been withholding taxes from her employees' paychecks and not sending the money on to the government.

WRT Betty's previous bankruptcy, it's my understanding it was a chapter 13. She was required to make payments through the bankruptcy court to pay back her debts, including the previous tax lien. That's done now, but it seems that she's on her way towards another one.

[taxguykarl]

It is however, in my book, a warning sign. That sign being "beware of sinking ship".

I agree there, I would be looking to get out, if the bank my paycheck was drawn on refused to cash it. Depending on how PO'ed I was, I would deposit it and turn the bouncie over to the state's attorney... a suitably diabolical way to strike back.

WRT Betty's previous bankruptcy, it's my understanding it was a chapter 13. She was required to make payments through the bankruptcy court to pay back her debts, including the previous tax lien. That's done now, but it seems that she's on her way towards another one.

And what a mess that will be. With the SBA, IRS, state revenue, laborboard and the bank picking over her bones. The worst part is that employees are just another unsecured creditor.