Filed under: Ripoffs and Scams

I’ve always believed that the punishment should fit the crime. Do unto others as you’d have them do unto you. And if you do something rotten and criminal to someone, it should be done to you as well. And this is an excellent example of the punishment fitting the crime.

Nathen Smith of Painesville, Ohio thought it would be adorable to steal a Salvation Army collection kettle right before Christmas. He was caught, and the judge handing down his sentence gave him the option of 90 days in jail or 24 hours as a homeless man. He chose the homeless route.

But I bet Nathen didn’t count on the judge ordering him to serve the sentence right then and there! The judge made him empty his pockets, and he was put on GPS monitoring. He was forbidden to room with friends or family. He was to spend the next 24 hours outside, in the cold. He was only wearing street clothes and a jacket. He called his mommy from a pay phone though, and she brought him snow pants and an extra sweatshirt. (Cheater!) The thief will also do three days in jail and some community service as part of his sentence.

What a perfect punishment for the crime of stealing money that’s meant to provide shelter for the homeless. I only wish more judges were so creative with their sentences!

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Record-keeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Ripoffs and Scams

How many homeowners do you know who have been ripped off by a builder, carpenter, or other contractor? I bet just about all of them will state they fell victim to a contractor at one point: either not receiving any services for their money, or getting a shoddy work product.

Over the last year, I experienced contractor drama of my own. A friend referred me to a very talented carpenter. I had seen some of his work and was very impressed. Except the carpenter had some business problems. He had several court judgments outstanding and had a history of finishing projects late. But my friend assured me the carpenter had turned over a new leaf and the hard times were a thing of the past.

I met with the contractor and he was eager to draw up plans for my project. I approved the plans, and he asked for half of the total cost as a downpayment so he could purchase materials and begin the project. That was almost a year ago, and he never bought materials and never started the project.
Where did I go wrong? Well some people will tell you to never make a downpayment on work from a contractor because it’s too risky. Others say it’s reasonable for the carpenter to ask for money up front to buy materials. Who is right? I don’t know, but I do know that with paperwork to document our deal, I felt I was protected.

I was wrong. I spent about four months trying to get the carpenter to do the project. At the time he told me he had done nearly all the work on the wood, and all that was left were some finishing touches and the installation in my house. The truth was that he never even started!

Finally, I told him I just wanted my money back. I spent the last seven months trying to get him to refund my money. Yesterday I finally received the balance of my money back.

Here’s my advice to you: Ask around and get a few referrals for reliable contractors. Only take seriously the referrals from people who have worked directly with the contractor. Inquire about whether or not the costs were reasonable, whether the work was done on time, and whether the project was finished to the satisfaction of the homeowner.

Then contact a few of the contractors and meet with each of them. First impressions mean a lot. By meeting with a few builders or carpenters, you have a chance to compare them and you might swiftly see that one or more falls short.

Finally, check court records if you’re able, to see if the contractor has had any disputes with customers. If you find a contractor who has a history of financial problems, liens, and judgments, don’t take the danger. Even if a friend or family member says they’ve had a good experience with the contractor, history states otherwise. Run as fast as you can in the other direction. Don’t set yourself up to be one more person screwed by the carpenter. I should know. It took me nearly a year to get my money back. And I consider myself lucky… most never get their money back.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Filed under: Ripoffs and Scams, Tax

Sound bytes from politicians often promote class warfare… citing how evil “tax cuts for the wealthy” are and pressing for more tax relief for the lower and middle classes. Listening to them, you would think that the lower and middle classes are carrying a disproportionately high share of the tax burden, wouldn’t you?

Well it’s time to debunk that myth with a tiny dose of reality. The Tax Foundation puts American income taxes in perspective with these facts. The organization’s analysis of the tax laws and rates indicates that have of American households pay no income tax at all.

In fact, many millions of households actually get far more money from the federal government than they’ve ever paid in income taxes. A study released last year by the Tax Foundation compared the amount of taxes paid by individuals versus the value of government spending received.

The study showed that the bottom 20% of households in America receive nearly $15 in federal spending for each $1 they paid in federal taxes. In contrast, the top 20% of American households received only 32 cents in federal spending for each $1 they paid in federal taxes.

Why is it this way? Lower income families often have no income tax burden under our system, and are even entitled to certain refundable credits. So if we want to put the income tax burden in perspective, this is really an important analysis. Instead of listening to politicians pander for votes with cries of a big financial burden on the lower class taxpayers, maybe we should be standing up and asking them to be more honest with their claims.

Why is this issue coming up now? Well the proposed “tax rebate” checks are going to be given to many Americans, including those who didn’t even pay any income taxes. It’s not much of a “rebate” if you didn’t pay taxes in the first place. It’s more of a handout, and maybe we’d do everyone a favor if we called it what it is. Another step toward Socialism.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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