Businesses in hot water


The next tax scofflaws targeted for public shame: bars, restaurants and liquor stores

Tuesday, August 18th, 2009

This time, it’s the taxman yelling “Last call!” Having gotten so much notoriety (and cash) out of its public lists of tax delinquent businesses, the Minnesota Department of Revenue this week rolled out its newest deadbeat roster. (My colleague Bob Von Sternberg reports that 180 establishments owe $7.7 million).The list includes businesses now prohibited from buying and reselling liquor, beer and wine because they haven’t paid sales, withholding or other state taxes. The list (available here and updated at noon each day) is divided into three sections, according to a revenue department news release:

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Did you book a seat on JetAmerica, the flightless airline?

Thursday, July 30th, 2009

My colleague Chris Serres, one of the authors of the “Lenders Gone Wild” series that has stirred up state lawmakers, alerted me this week to the demise of JetAmerica, a startup airline he reported on, with a dose of skepticism, in May. Back then, it intended to offer flights between Minneapolis and Toledo starting Aug. 14, even though it hadn’t even cleared that plan with the Metropolitan Airports Commission. So Chris wasn’t shocked when the company made this announcement, less than two months later:

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Bible-waving investment pitchman gets prison time for securities fraud in Alabama

Tuesday, July 28th, 2009

Last year Whistleblower told the story of Advanced Health Scan, an investment deal that consumed millions of investors’ dollars without opening the promised body imaging clinic in southern California. Now comes word from Alabama that one of the former top dogs of the company, Daniel A. Caterino, will be returning to familiar quarters – behind bars. My conversation with this fast-talking gentleman last year was memorable, not only for its many tangents, but for Caterino’s assertion that he had found God and therefore his criminal past had no relevance to the current furor over what looks like a scam at worst, entrepreneurial incompetence at best. In a video for investors last year, Caterino held up a Bible as he counseled angry investors to just give him more time to make the business work. After pleading guilty in May, Caterino will have 30 months in an Alabama prison to brush up on his Scripture. For my more complete story, click here.

Bank failure doesn’t take the pressure off troubled senior co-op in Edina

Thursday, July 23rd, 2009

pa020214.JPGLast week, my colleague Chris Serres’ reported on the collapse of BankFirst, the 55th bank failure in the nation this year, blamed on risky real estate loans in urban areas. That’s a good description of the financing deal that has left a luxury senior housing cooperative, the Gramercy Club of Edina, in foreclosure limbo. Last year, I described how BankFirst was suing each resident individually as part of its effort to foreclose on the co-op’s owner. In February, that owner declared bankruptcy.

This week, I checked in with Jim Campbell, a co-op resident who has taken a leadership role in the residents’ effort to stay in their homes. Campbell told me the co-op is still in real estate paralysis, unable to sell any of its vacant units, although five of them have been rented out. The bankruptcy of the co-op developer delayed the foreclosure proceedings for months. But it isn’t over. Even the government shut-down of the lead creditor can’t stop it – the debt on the $25 million loan still exists, and it’s actually parceled out among 30 or so entities, he said.

His side of the lawsuit was required to submit comments to the judge earlier this week. “I have no idea as to whether the other side [BankFirst] even exists enough to put in any comments,” he said.

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