When my friend Steve Evans posted a link to a story about Chipco’s president being arrested on tax evasion, that got my attention. Chipco was a Maine-based company that made high-quality poker chips. Many of the local casino here in Las Vegas have used Chipco chips. I have a particular fondness for them; one of my poker chip sets features these chips that I got to design back in 2002.
John Kendall was the president of Chipco (formally, Chipco International). They closed a couple of years ago. Those in the poker community thought that there closing was mostly due to the end of the poker boom. Another factor was Chipco’s method of paying employees: off the books.
Perhaps this could be my Bozo Tax Tip #11: Pay your employees off the books and don’t send withholding to the government. That’s exactly what Mr. Kendall did, and the money went exactly where you’d think it would go: his mortgage, country club dues, and legal fees for his personal bankruptcy. Maine Revenue Services investigated, and they weren’t happy. Add in underreporting of his own income on his 2009 tax return and you have the makings of six guilty verdicts. That’s what happened this past week in Portland, Maine. Mr. Kendall will be sentenced later this year.
A helpful hint to anyone wanting to emulate Mr. Kendall: Just pay employees in the normal way, on the books, and send the withholding where it belongs.
I now return to my regularly scheduled hiatus.