Wednesday, December 17, 2003

Local pizza house hurt in tax scam

Published in the American Journal

Steven Orr, the owner of Pizza Time of Westbrook, is frustrated with the state, the IRS and his former accountant, John Baert, owner of Harmon-Baert Associates of Saco.

“I’m one of the people that he didn’t pay any taxes for,” Orr said Monday. His federal payroll taxes haven’t been paid for two or three years, leaving him with a bill “in excess of 10 grand.”

He isn’t very firm on that number, though. When he called the IRS, he learned “they can’t even give me exact figures” on what he owes. He also doesn’t know if penalties and interest will be waived because of the circumstances of the case, in which Baert allegedly failed to pay millions of dollars in payroll taxes for dozens of companies over the course of the past three years.

Baert is facing three counts of mail fraud in a Portland federal court.

U.S. Sen. Susan Collins has requested the IRS waive those extra fees. Nobody expects the agency to forgive the taxes that have not been paid. “In essence we’re double-paying the money,” said Orr, who has filed a civil lawsuit against Baert seeking repayment of the money Baert should have given the IRS.

Orr may have to borrow money to make good on the debt, but it won’t shut down his business. “We’re not going to close.”

It will have a negative impact, though. He had been planning to remodel and open longer hours, hoping to participate in and encourage Westbrook’s downtown revitalization.

“That’s going to have to be put on hold,” he said.

Baert also prepared Orr’s business income tax returns, but Orr paid those bills himself and mailed them in. Orr also made his own sales tax payments to the state. His state payroll taxes are also in good shape, but Orr is unhappy with the state, which was supposed to make sure payroll firms were licensed and posted bonds to secure the money they handled.

“We also feel like the state’s responsible,” he said. “If the state’s receiving money from this person, you’d think they’d check on the person.”

One of the problems Orr has figuring out how much he owes the IRS is that Baert had a lot of the company’s financial records. The IRS may have seized them in late November, when agents searched Baert’s home and business. Orr hasn’t seen them, though he hopes to get access to the records soon.

“We have to create the payroll for the last two to three years,” he said. “We just don’t have the records.”

Orr had been using the payroll firm for 15 years – like many other pizza restaurant owners around the state – when he bought his business from two men who had started dozens of pizza joints in Maine.

Those men had used Arthur Harmon, Baert’s father-in-law and founder of the business, as their accountant, so Orr stuck with the firm.

When Harmon died and Baert took over, “we just automatically assumed” everything was above-board.“He’s not the person that we thought he was,” Orr said.

Paul Bureau of the Real Estate Store in Scarborough was also surprised at the news of Baert’s alleged wrongdoing. A customer of Harmon and Baert for 29 years, Bureau said Baert “did great. He was always terrific. I had no complaints.”

Baert did not handle Bureau’s payroll tax money, but did provide other accounting services to his firm.

“We were all shocked,” Bureau said. “It just seemed out of character.”

One big question still lurks in Orr’s mind. Saying he has seen records showing Baert had about $200,000 in liquid assets and a $200,000 home: “We don’t know what he did with the money.”

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