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12 posts from March 2012


Payday loan company saves its interest for borrowers, not the disabled, feds say

Irving’s Cottonwood Financial will pay a $56,500 judgment after its half-dozen rationales for firing a store manager with bipolar disorder were ruled a pretext for discrimination, according to a federal
Payday loans eat some aliveagency. 

The news is hard to believe from a business that cares about people as much as the payday loan industry.

The Texas company, which does business in the otherwise virtuous payday loan industry as The Cash Store, hired a man as assistant manager in June 2006 and he was promoted to store manager several months later at a location in Walla Walla, Wash. 

But in January 2007, he requested a short leave to adjust to a new medication to treat his bipolar condition. The Cash Store said no and about a month later fired him. A judge found that The Cash Store broke the law by firing the manager and awarded him $6,500 in back wages and $50,000 for  emotional pain and suffering, according to the U.S. Equal Employment Opportunity Commission.

The court also issued a three-year injunction, requiring The Cash Store to train its  managers and Payday loan human resources personnel on anti-discrimination and  anti-retaliation laws.

According to its website, www.cashstore.com, Cottonwood Financial  owns and operates payday lending stores in over a half-dozen states and  maintains over 500 employees. In Texas, The Cash Store loans rack up annual percentage rates of up to 611 percent. APRs for Washington stores were not available. 

-- Darren Barbee


Mine operators tipping workers to 'surprise' inspections

Shocking as it may be, you apparently can't count on coal mine operators to keep mum when a federal mine inspector suddenly shows up looking for hazards.  Instead, operators and their minions tip off underground workers in hopes of hiding violations, the U.S. Labor Department reports. They got caught in the act in several recent instances, including at a site where a miner was killed in August. 2010 mine explosion A superintendent of a West Virginia mine where 29 men died in an explosion in 2010 recently reached a plea deal with the federal government, admitting to conspiracy to giving advance notification of mine inspections and other violations, the Labor Department reports.  So far this year, there have been 10 deaths in the nation's mines, the Mine Safety and Health Administration reports


Federal agencies recovered just 1 percent of improper payments made in 2011

The federal government estimates that $115.3 billion in "improper payments" were bet on the ponies squandered in fiscal year 2011, according to a Government Accountability Office report

For a little perspective, consider the entire Texas budget -- over two years -- is about $173 billion, Fill in the blank
according to the Legislative Budget Board.

On the bright side, now you don't have to feel so bad about blowing $15 for a copy of Battle: Los Angeles

Of the improper payments in 2011, 10 programs accounted for 93 percent of the improper payments, or $107 billion, according to estimates. 

The 2011 amount represented a 4 percent dip from the previous year, when $120.6 billion went out the door. Still these are estimates, and the government doesn't really know the full extent of improper payments. 

Not all of the report was bad news. It was more sort of mediocre: The Office of Management and Budget reported that federal agencies "recaptured" $1.25 billion in improper payments to contractors and vendors, or about 1 percent. (Don’t start the party without us and remember to get a receipt).

Improper payments don’t necessarily mean fraud occurred, according to the report. Some payments are those that shouldn't have been made or that were made in an incorrect amount. 

Likely to no one’s surprise, Medicare and Medicaid led the way with improper payments. Medicare fee-for-service improper payments were $28.8 billion, due to medically unnecessary services and insufficient documentation. Medicaid blew $21.9 million on improper payments due to ineligible or indeterminable eligibility status for beneficiaries. 

-- Darren Barbee


Poverty-hating Haltom City televangelist Murdock's $1.5 million mansion for sale

Haltom City Cashevangelist Mike Murdock, who asks donors to send him money by assuring them God could possibly, if things go right, Mike Murdockreward them with big bucks, is selling his Argyle estate, valued at $1.5 million by the appraisal district.

A quote attributed to Murdock goes like this: “You will never become rich, until you hate poverty.”

His mansion - which includes an indoor fish pond, 3,000-square-foot tennis court, game room, water fall, jetted tub, four media rooms, swimming pool, exercise room, guest quarters and other amenities on 6.89 acres - certainly screams “I have something of an aversion to non-richness.” Murdock Manor

Perhaps not surprisingly, Murdock, who goes by the moniker “Dr. Mike Murdock” on television  — it’s an honorary degree — is trying to make a little profit on his 9,825-square-foot manor.

Its listed price is $3.2 million. (See video below for a virtual tour.) If you're lucky, he may also toss in a copy of his $10 Twitter tips book.

Murdock’s website for his church, The Wisdom Center, doesn’t indicate where MM may be moving. 

Still, consider this, potential homebuyers: Not only do you get a home with five balconies, four gazebos and a sunken fire pit, you’ll be able to show others that they don't have to wait for heavenly rewards. 

No matter how you raked in the money.

-- Darren Barbee



Mocked and broke: Houston-based TaxMasters files for bankruptcy

Irony’s foot has firmly planted itself in TaxMasters’ assets: The widely satirized Houston company, which the Texas Attorney General says hoodwinked customers struggling with IRS debts, filed for bankruptcy this week.

The company, which promised, “we solve your tax problems” listed assets of up to $50,000 and estimated liabilities between $1,000,001 and $10 million, according to a bankruptcy filing.

Saturday Night Live and a number of YouTube videos have parodied the company’s oddly stiff commercials:


In May 2010, Texas Attorney General Greg Abbott sued the company and its CEO, Patrick Cox, for violations of the Texas Deceptive Trade Practices Act and the Texas Debt Collection Act. Minnesota’s AG also sued. 

The Texas enforcement action accused TaxMasters of routinely misleading customers about their 1040 service contract terms, failing to disclose its no-refunds policy and falsely claiming the firm would immediately begin work on a case. 

Instead, TaxMasters did not actually start work on a case until customers paid in full for services, even if that meant taxpayers missed IRS deadlines, according to the attorney general. In fact, customers complained that TaxMaster’s crack team of “former IRS agents” failed to:

Contact and consult the IRS on the client’s behalf; 

Appear with clients at IRS audits or hearings;

Postpone or stop wage or bank garnishments;

Stop levies or liens against a client’s property. 

TaxMasters’ advertisements also promised a  “free consultation” with a “tax consultant.” Court documents filed by the state said callers were not connected to an employee qualified to give tax advice, but rather with a TaxMasters salesperson who recommended a “solution” for up to $9,000 or more.
The company listed owing between 1,000 and 5,000 creditors. Watchdog is taking bets on whether one of them is the IRS.

-- Darren Barbee

Former CFO accused of taking at least $120,000 from Austin charity

The former chief financial officer of an Austin nonprofit has been charged with two felonies for taking Poormoney from an organization supporting low-income families, according to the State Auditor’s Office. 

The auditor’s special investigations unit scrutinized allegations involving ARCIL, formerly know as the Austin Resource Center for Independent Living. The auditor’s findings led the Travis County District Attorney’s Office to obtain a two-count indictment against Mary Ann Hernandez this month. 

An indictment charges Hernandez with misappropriation of fiduciary property between $100,000 and $200,000, a second degree felony, according to the auditor. A second count charges Hernandez with theft of between $20,000 and $100,000, a third degree felony. 

The Department of Housing and Community Affairs contracted with ARCIL from 2005 to 2009 to provide rental assistance to persons with disabilities. Travis County officials said Hernandez does not have an attorney listed in court records. The case is set to be heard April 16.

-- Darren Barbee


Tarrant County attorneys disciplined by the State Bar of Texas

Two Tarrant County attorneys were recently disciplined by the Star Bar of Texas

Carol Bowling Jackson, 62, of Bedford, was disbarred for providing opposing lawyers in a divorce case terms contrary to those provided by her client, according to bar documents. She also failed to keep her client, a woman, reasonably informed about about the status of the case and did not promptly turn over papers and property by failing to return her client's file when the woman and her new attorney requested it.

Jackson previously had been suspended. According to the bar, she neglected a client’s legal matter and failed to keep the client reasonably informed about the status of her wrongful termination matter, the bar said. She also did not promptly comply with reasonable requests for information. Jackson failed to reduce the contingent fee agreement entered into with the client to writing, and upon termination of the representation, failed to surrender papers and property belonging to her client. Jackson also failed to furnish a response to the complaint. 

Also disciplined was Donald T. Smith, 52, of Fort Worth. Smith was accused of neglecting a client’s probate matter and failed to carry out completely the obligations owed to the client, according to the bar. He also failed to keep the client “reasonably informed” about the status of the matter, and to promptly comply with reasonable requests for information. Smith also failed to furnish a response to the complaint. He received a five-year, partially probated suspension effective Dec. 1, with the first three years actively served and the remainder probated. He was ordered to pay $1,807.94 in attorney’s fees and costs.

 -- Darren Barbee


Sunshine Week? Oldest 10 Defense Department information requests turn 100

From the Too Good to Be True Department

Get the veggie tray and chicken wings ready: it’s time for the federal government’s Sunshine Week “celebration.”

Lest you get caught up in the wild euphoria of open government, snatch off that party hat and sober up.

Despite the Obama Administration’s efforts to let the public see its own records, these are still federal agencies we’re talking about.

(Note: Our inflammatory comment about those agencies has been redacted.)

U.S. Attorney General Eric Holder said Monday that despite receiving 60,000 Freedom of Information Act requests in the past three fiscal years, his department was able to reduce the backlog of pending requests by more than 25 percent.  

That certainly sounds impressive (see chart at bottom).

Holder also announced some updates to the government's information requests website,www.foia.gov

But Watchdog’s quick review of the site shows information requests to the government as old as 20 years are sitting around, as well as others from 1993, 1994 and 1996. At the Department of Defense alone, the oldest 10 requests have been collecting dust for a collective 36,850 days— a little over 100 years. 

So, stay positive and remember your favorite public information bureaucrats this week. 

Just don’t expect them to remember you.

-- Darren Barbee

Foia charts


Government paid for knee braces for man without legs, feds say

Brace yourselfThe owner of a Houston medical equipment company supplied worthless orthotic braces resembling a “football suit” to one woman, sent knee braces to man whose legs had been amputated and provided another set to a baffled woman who hadn’t ordered them.

She ended up giving them away to a neighbor.

It only took a few years for the government to figure out that Akinsunbo Akinbile, 44, of Richmand, was defrauding taxpayers for orthotics and “arthritis kits”  — an amazing new technology called “heating pads” — that either weren’t medically necessary or weren’t provided to Medicare patients at all, according to the Department of Justice. 

Akinbile, 44, should brace himself for a 30 month stay in the federal slammer. He must pay also $471,022 after pleading guilty in November to eight counts of health care fraud. 

Akinbile was the owner and operator of Hallco Medical Supply, a company that purported to provide orthotics to Medicare beneficiaries. From June 2007 through May 2009, Akinbile submitted claims of approximately $737,770 to Medicare and was paid approximately $471,022, according to court documents.

-- Darren Barbee


Texan trader booted from national group over claims system earned 116 percent

Watchdog would like to welcome a Carrollton commodity trading advisor back to reality.

Make that a banned commodity trading advisor.

Leon L. Wolmarans and company FIN FX  has been permanently barred from the National Futures Association for claiming returns for investors as high as 116 percent that he couldn't substantiate. Investment

The association said Wolmarans and company FIN FX used false and misleading promotional material and posted unsupported trading results on a company website, according to a March 7 press release.

Wolmarans also failed to promptly and fully cooperate with the association’s investigation. 

Wolmarans' website posted performance for one trading system that showed annual rates of return between 39 percent and 116 percent from January 1999 through September 2008.The website also contained a section entitled "Mini Forex Trading contest" winners, which represented that a first place winner garnered a return of 354 percent, according to association documents.

In April 2011, FIN FX and Wolmarans was suspended from association membership because the firm attempted to solicit customers with false and misleading information, including deceptive performance claims on FIN FX's website.  

Additionally, FIN FX and Wolmarans provided misleading information to the association and failed to cooperate with an examination of the firm by failing to provide information and produce records requested by NFA.  

The National Futures Association is the industry wide, self-regulatory organization for the U.S. futures industry. Membership is mandatory, assuring that business conducted with the public on the U.S. futures exchanges follows standards of professional conduct.

-- Darren Barbee