Snitch advice?

November 15, 2006 1:03 PM

I know of a local business that is operating illegally in my town, and has screwed over 3 friends of mine in the last 6-8 months on taxes, pay, and wages. I would like to know the most effective way of reporting them to authorities. (long explanation)

A small-medium sized business is operating without city or county licenses, all employees are paid cash under the table, they don't even pay minimum wage, and a friend of mine (she's not the brightest apple in the drawer) had taxes withheld for ~8 months by this company; when she tried to file, she found that they had not sent a single dime, nor had she been reported at all as an employee. I don't think a single employee out of 20 or so is on the books. When the minimum wage went up, the owners refused to pay any more and the people there are still making between 5-6 dollars an hour. Another friend that worked for them for 4 years gave her two week notice and has yet to see 3 weeks pay from them after a month and a half since she quit.

The owners of the business are scumbags...they make a few hundred thousand a year from this company (by my conservative estimates) and are constantly driving around in new expensive cars, building new barns for their new horses, trips, etc. while hiring crack heads, prostitutes and anyone else willing to work for less than minimum wage. They happened into the business by inheritance and are driving the once great business into the ground, but it's not going to come fast enough. I can see them squeezing another decade out of this deal.

My friends were hired when the previous (now deceased) owner (who built this business from the ground up on her own) was still in charge. They watched helplessly as the new owners turned this respectable business into a hell hole. Their office hasn't been maintained in years. Part of the roof is still caving in from hurricanes a few years ago, the bathroom is so disgusting my friends wouldn't even use it, and they were finding crack pipes and used condoms lying around the office, in filing cabinets, etc, which were reported to the owners but nothing was done.

I could go on, but there is not enough room =D

I have decided I will be the one to do "the dirty work". There are so many people pissed at this company that there's no way that anyone specific could be blamed or suspected by them. My friends are all at other places now, thank god, and they don't feel that they can do much seeing as how there is no record of them working at the place. I don't know specifics about paperwork, like the status of their employment before the ownership change and what the new owners did to that status, but no one feels as though they can do anything. My good friends are out hundreds of dollars due to their bosses shenanigans, and it just irritates me that these people will be fleecing people for years to come if they aren't stopped or shown that that kind of business practice is unacceptable.

I am asking, not if I should do this, because I am, but who I should get in touch with to make it happen as efficiently as possible. As soon as anyone in authority does some poking about, it will be obvious that they are crooked... I have done some research and they haven't even done the most basic requirements to cover their asses. Absolutely nothing to stand up to the lightest scrutiny. Just looking for their city and county licenses shows nothing (and that's around $100 dollars a year). I am actually astonished that they have been able to continue for so long as is.

posted by dozo to work & money (20 comments total)

I've never dealt with something like this, but from reading your story, I would start with the city and/or county license bureau where you verified they have no license - those bureaus must have an enforcement or compliance division, or at least someone there could maybe tell you where to start.
posted by pdb at 1:20 PM on November 15, 2006

How to be a tax snitch

If what you say is true, and you can let the IRS know where to look to prove it, you might be eligible for a reward. Furthermore, you might have the satisfaction of watching Treasury agents raid the offending business.
posted by ikkyu2 at 1:22 PM on November 15, 2006

sometimes local news stations, newspapers will do stories on places like this, which hastens the authorities into action. see if your local media outlets have an ombudsman or something like that, if not find out what reporter it would be most relevant to and email them some details.
posted by yeahyeahyeahwhoo at 1:25 PM on November 15, 2006

It occurs to me that I'd avoid local offices, at least to start. I'd assume that anyone who could get away with such behavior and who is involved in drugs and prostitution would probably be armed and dangerous and probably have paid off some local civil servants.

How would you like it if they found out what you were doing and handed some crackhead a gun and your home address, with the promise of payment later?
posted by ikkyu2 at 1:26 PM on November 15, 2006

What ikkyu said: it sounds farfetched, but it can be hard to know whether a business owner doesn't give a shit about stuff like this because they're stupid, evil, and lazy, or whether it's because they have organized crime connections that keep them impervious to inspection. Either way, you need to do this anonymously.

And I have an amazingly similar situation on my hands here in NYC, and will be watching this thread very closely.
posted by hermitosis at 1:30 PM on November 15, 2006

Get. A. Lawyer.

Seriously. While there's usually an protection for whistle-blowing (because snitching sounds bad) in criminal affiars as this one might be, you want all your bases covered, armored and guarded by angry Swiss guards before you think about picking up a phone.

Second, document everything. Your word counts for little. Even if you're right, the gov't office in question believes you, and is inclined to investigate, unless they have a good expectation of winning, they'll drag their feet. Line your ducks up, get statements, evidence, records, times, dates, names, everything. Give copies to your lawyer (who you've lined up by now, right?).

Third, you want to keep your name out of this if at all possible. Say you're worried about repercussions, demand a code name/code number/cloak-and-dagger meetings. Pull a pentagon papers and meet someone in a back alley with an unmarked manilla envelope. Or just have your lawyer (remember him/her?) do the actual contacting, if possible.

Fourth, take pictures/tip off the media so we can share the shadenfreude when the suckers get perp-walked.

As for specific advice, on no real evidence I'd recommend state-level authorities over local or federal ones. Look for as criminal-looking behavior as you can find, perp walks are way more satisfying than lawsuits.

Oh, one last thing: don't lie. Come right out with your motivations and connections to the case. You're friends got screwed over and you want some justice. No shame in it. Trying to hide it, pretending to be a samaritan, being evasive are all just going to turn off your potential allies. Your lawyer will help here.
posted by Skorgu at 1:37 PM on November 15, 2006

Well, there's so many people that are pissed off at the business that I don't think they would know where to start looking, ikkyu2. A crack head with a gun and my address would suck to be sure, though. I haven't had much experience ratting people out, even though they totally deserve it, and it's kinda freaky not knowing what to expect.

Thanks for the information and links, though. The newspaper angle isn't one I have considered, but perhaps it would turn up the heat some.
posted by dozo at 1:39 PM on November 15, 2006

Strangely, hermitosis, we discussed the organized crime possibility when I first talked about reporting these people. My friends don't think that's the case, and the prostitution/drug thing is just the type off people they have been able to hire for illegal wages the last few years. I don't think the owners are involved.

Thanks for the in depth reply, Skorgu. Whistle-blowing, right, right. As for documenting, there really at this point is not much to document as my friends aren't working there anymore. I guess I could get a job there (they'll hire anyone, seriously) for a couple weeks and snap some pics, photocopy some timesheets, client contracts, etc I would guess it should take an undercover agent/investigator maybe three weeks to find that they are in uber-violation and get the wheels moving in earnest.

O yea, sweet media, Bitch Goddess, shower me with your heavenly phlegm.
posted by dozo at 2:00 PM on November 15, 2006 [1 favorite has favorites]

Part of the roof is still caving in from hurricanes a few years ago, the bathroom is so disgusting my friends wouldn't even use it,

let's see, local building inspectors, osha, county and state health officials, etc etc could be called about this ... i bet if you think it through, there's ALL sorts of rules and regulations these people are breaking

and a friend of mine (she's not the brightest apple in the drawer) had taxes withheld for ~8 months by this company; when she tried to file, she found that they had not sent a single dime, nor had she been reported at all as an employee.

does she have the pay stubs to prove this? ... if so, she and the irs have the best chance of getting them on tax charges
posted by pyramid termite at 2:04 PM on November 15, 2006

I guess I could get a job there (they'll hire anyone, seriously) for a couple weeks and snap some pics, photocopy some timesheets, client contracts, etc

bad idea ... make some anonymous phone calls to various agencies and see what happens ... i really don't think you want to be involved to the point where you're on their property taking photographs ...
posted by pyramid termite at 2:06 PM on November 15, 2006

Well, there's so many people that are pissed off at the business that I don't think they would know where to start looking, ikkyu2.

Pay attention. You go to City Hall. You ask to speak to the guy in charge of permits. As a matter of routine he takes down your name as you file your complaint form. Then, after closing time, the secretary who was paid off last year to file false documents copies your information down and makes a phone call to the person who paid him. The secretary expects to be richly rewarded for this tip - perhaps $1000. Maybe your complaint form even gets "lost."

By your own admission, your enemy - you're making an enemy here, you realize that, right? - is making several hundred thousand dollars a year in discretionary income, and is involved with drug addicts. Do you really want this person to know anything about you?

Go through the IRS. They are equipped to really put the thumbscrews on this guy, and from your post it seems that the major crimes are tax fraud and tax evasion anyway- there's no law against hiring a crackhead.
posted by ikkyu2 at 2:23 PM on November 15, 2006

They are/were all paid in cash under the table, no stubs or paper trail of any kind. That's why they feel they can't even prove they ever worked there. The girl who was scammed for the taxes is pretty young and doesn't seem duplicitous to me; she's a total sweetheart, if a little airy.

I see your point, pyramid termite. I keep forgetting that the loss of their livelihood (even though they have taken no precautions or steps to safeguard it) can drive people to extremes.

I just remembered FindLaw which seems pretty good, but I've honestly never had to use it before.

That's a scary scenario, ikkyu2

Of course, I'm not coming down on crack heads or prostitutes, who have their own hells... I'm just trying to say that they (the owners) are preying on the weak, poor, and destitute to continue this weird fantasy world they apparently inhabit.
posted by dozo at 3:23 PM on November 15, 2006

Report it to the IRS. Not paying withholding incites the wrath of the IRS god in a very unique way.
posted by Ironmouth at 3:44 PM on November 15, 2006 [1 favorite has favorites]

Do all of the above, that is, they need to be hit by every angle, simultaneously. Building permits, BBB, sanitation, OSHA (if applicable), Office of Hours and Wages, IRS, tips to local muck-racking rags, emails sent to hungry reporters, letters to aldermen of that particular city, you name it. As long as you report to several levels of government (federal, state, local) and some news organizations, the punches will start coming.

Do it anonymously.

Figure out what you know about their holdings, assets, etc. That information also needs to go to the above parties, so that everyone can jab their proboscii (sp?) in and begin slurping the blood out of these jerks.

Then, about a month into the pain, drop another anonymous letter, this time to the jerks in question. Just a short note that says, "You screwed my friends out of XXX. That's why you're in this trouble. I hope it was worth it."

Their list of enemies will already be so long they'll never guess who.
posted by adipocere at 4:04 PM on November 15, 2006

By the way, if you go forward, you may wish to encourage your friends to pay income tax due on their illegal income. Otherwise, they'll become collateral damage in your project as the IRS comes after them, too.
posted by ikkyu2 at 4:26 PM on November 15, 2006

Don't for get to call ICE, I'd bet there's no I-9's on file either, no? Sure it won't do much unless there are a lot of illegal immigrant employees, but it will be a delicious vengeful hassle as feds go through the files.

To report suspicious activity, call our toll-free tip line at 1-866-DHS-2ICE.
posted by Pollomacho at 6:01 PM on November 15, 2006

I did this. And my ex-boss was a scumbag too. And the rule of thumb here is stay in your house, do NOT go to city hall, email/phone the people you want to rat to and assume that SOME of the many agencies you contact will not want to follow up.

But MOST will.

There are DOZENS of local and state agencies that need to justify their expenses for a year. All of them are looking for one hugely justifiable bust that says, "Hey, THOSE guys are doing their job...unlike those bums in agricultural inspection"

So write a good boilerplate letter to blow the whistle, get out the blue pages of the phone book and go to the state and municipal listings on the web and start dialing and emailing.

Some things you may not have thought about in terms of ratting are as follows:

1) The fire inspector - you said the place was falling apart
2) The health inspector - it doesn't always have to involve food to justify these guys
3) Excise tax board - if he's not charging the proper sales tax, these guys are aggressive in their stings
4) The state senator or assemblyman for the district (but only after you've contacted everyone else)
5) Your congressman - It's crazy how well this one works. they do nothing but call the city agency that deals with it but when the call comes from a distinguished gentleman, mayors and aldermen hop to it
6) email BOTH of the investigative news teams for your area, and a newspaper editor if possible. Local news guys talk. And the more of them that are just "looking" at a place for a story, the more they'll think that there MUST be something to it.
7) OSHA - Man do these guys get on top of it. If you know of an incident where one of these crackheads was injured in any way, the company is obligated to file an OSHA investigation within 8 hours. They WILL follow up and they will alert other federal agencies
8) Immigration - A second on this one. They'll be slow but they'll get there. Eventually
9) Consumer Affairs Office - If you know they've been ripping off consumers in any way, they'll follow up. Usually there's STATE and LOCAL ones as well
10) Insurance Commission - These guys were only obliquely related to the boss I ratted on but from what I understand, they made the most trips for the smallest fine.
11) If there are vendors that deal with these shmucks, you can anonymously tip them off that they're dealing with rough customers. And when the first investigations start, they'll say "whoa, the tip was right" and cut and run.

And, again, there are dozens more in the federal and state listings who will get on top of YOUR case to justify their use of your tax dollars. I think, all told, I sent like 125 letters. And, all told, I buried the bastard in enough paperwork that, even before the fines, I cut his ability to make a dime.

But the losses increased considerably when those fines were assessed.

Finally, as much as you may want to take credit for this eventually, don't. Be happy, be quiet, DON'T post this afterwards and just be content that you know you were the reason a 5 million dollar business went away in four months.
posted by rileyray3000 at 9:44 PM on November 15, 2006 [1 favorite has favorites]

In my experience, the Department of Labor has so little power to act in these matters as to be almost pointless. They might be able to provide you with some useful information, but don't choose them to be the avenging angel.

If it were me, I'd probably call the IRS. But another possibility is to find a lawyer who takes wrongful termination cases and lay out the specifics for him/her. (This probably wouldn't be a wrongful termination case, but I'll bet a lawyer who works in that arena would, at the very least, know who you needed to talk to.) I figure the case is a winner because there's a group of wealthy defendants, a large group of agrieved employees who'd probably love to sue them, and plenty of incentive for these guys to settle out of court.
posted by Clay201 at 3:12 AM on November 16, 2006

I know ICE/DHS/INS is (in)famous for being fond of busts, but I'd be wary about that. If there are immigrants working there, ICE isn't going to be sweetness and light towards them, and as you said they have their own hell to deal with.

Unless you can get pretty good assurances that the workers will get off, I personally wouldn't involve immigration.
posted by Skorgu at 7:12 AM on November 16, 2006

If you send multiple letters out it may be good to include a cc: line, that way the different levels know that many eyes are reading the same thing and it isn't something that can be safely ignored as a lone letter.
posted by edgeways at 8:42 AM on November 16, 2006