Teemco

[JohnH_in_OKC]

This thread should be award winning journalism. It wins my award for a top notch investigation. Congratulations, Pete, for your hard work.

[bombermwc]

WOW, I still can't believe all of it! Pete, amazing work there. If there is such thing as a Board at Teemco, surely they would toss him after learning about all of this and then how did they not know!? If someone doesn't run this story in mainstream, they are missing out on a MAJOR piece! Great job!

[Pete]

WOW, I still can't believe all of it! Pete, amazing work there. If there is such thing as a Board at Teemco, surely they would toss him after learning about all of this and then how did they not know!?

TEEMCO is an LLC that operates more or less like s sole proprietorship.

As such, there is no board or real oversight.

I've seen them list a "board of advisers" but those are usually just friends without any power or authority.

[Pete]

Not many people understand what this company does -- I never did until I started researching this story.

From what I've learned they perform two major categories of services to oilfield companies: 1) compliance consulting and 2) remediation.

It terms of compliance, everyone operating a drilling rig is required to comply with many regulations, including those that concern the environment. "Spill plans" were mentioned up-thread and that seems to be (or have been) one of the biggest parts of their business, where they basically take a stock plan and customize it for each client. Basically, it's a plan they can keep on file in case there is a spill at the site. I was told that they charge about $15,000 to $20,000 for these plans, so not a ton of money.

The remediation piece involves much more money both in terms of revenue and expense. I know in one case they sold a contract for "flowback" -- cleanup of fluids from the fracking process -- that would have been for millions over several years, but had no equipment to provide the service. So, they partnered in West Texas someone who already had the equipment, but things fell apart from there.


I would like to say more about all this but I'm being very careful to only post/publish what I can document and verify.

I hope to be able to share more in the near future.

[RadicalModerate]

Very interesting article, Pete. Very sad, yet interesting.
Now I'm a bit concerned about The Gold Dome again.

Not to nag . . . Yet, this volume might help to put current events into perspective:

[litt]

Not many people understand what this company does -- I never did until I started researching this story.

From what I've learned they perform two major categories of services to oilfield companies: 1) compliance consulting and 2) remediation.

It terms of compliance, everyone operating a drilling rig is required to comply with many regulations, including those that concern the environment. "Spill plans" were mentioned up-thread and that seems to be (or have been) one of the biggest parts of their business, where they basically take a stock plan and customize it for each client. Basically, it's a plan they can keep on file in case there is a spill at the site. I was told that they charge about $15,000 to $20,000 for these plans, so not a ton of money.

The remediation piece involves much more money both in terms of revenue and expense. I know in one case they sold a contract for "flowback" -- cleanup of fluids from the fracking process -- that would have been for millions over several years, but had no equipment to provide the service. So, they partnered in West Texas someone who already had the equipment, but things fell apart from there.


I would like to say more about all this but I'm being very careful to only post/publish what I can document and verify.

I hope to be able to share more in the near future.

pete,

i have been in the same business as teemco for 7 1/2 years. there are ALOT of companies like theirs in this profession. as far as i'm concerned, the couple that sold the business to them isn't any better, either. it's nothing short of shocking to me that teemco has even gotten this far with their business practices. i'm amazed that they've gotten the positive press they have over the years. it's about time someone did an article on these guys. they MORE than deserve it. i would also say that ANYone that pays 15-20K for a spill plan has their head where the sun doesn't shine. that's WAY WAY WAY more than they should. even the most expensive jobs that i've done aren't ANYwhere near that price. not even beginning.

again, great work, pete. this article nailed it on these guys. i wonder what the over/under is on channel 9 removing them from their "teemco cam" stuff is?

[NoOkie]

pete,

i have been in the same business as teemco for 7 1/2 years. there are ALOT of companies like theirs in this profession. as far as i'm concerned, the couple that sold the business to them isn't any better, either. it's nothing short of shocking to me that teemco has even gotten this far with their business practices. i'm amazed that they've gotten the positive press they have over the years. it's about time someone did an article on these guys. they MORE than deserve it. i would also say that ANYone that pays 15-20K for a spill plan has their head where the sun doesn't shine. that's WAY WAY WAY more than they should. even the most expensive jobs that i've done aren't ANYwhere near that price. not even beginning.

again, great work, pete. this article nailed it on these guys. i wonder what the over/under is on channel 9 removing them from their "teemco cam" stuff is?

I think the deal may have just expired. They started doing it about a year ago. And if they blew all their money and laid off a bunch of people, they may not be able to afford re-sponsoring it.

[Pete]

Actually, I just learned from someone who works for Channel 9 that they are now using a collection agency to try and get money owed from TEEMCO.

TEEMCO was behind on a bunch of bills when they signed new endorsement deals in July.

[CCOKC]

I heard on of their endorsement spots while listening to the OSU game on the radio yesterday. Took me aback a little.

[Pete]

I heard on of their endorsement spots while listening to the OSU game on the radio yesterday. Took me aback a little.

They just signed those deals this spring.

[Pete]

From Brianna Bailey's Twitter account; says there is a broken window at the Gold Dome as well:

[Pete]

The little video blurb they do on NewsOK said that Brianna Bailey is doing a story on how financial troubles at TEEMCO has "prevented the sale of the building".

I'm sure it will be posted later tonight.

[ljbab728]

Brianna's article.

http://www.oklahoman.com/article/5349252?embargo=1

Work on Oklahoma City’s iconic Gold Dome building has been stalled by financial problems at the Edmond environmental engineering company with plans to renovate the local landmark at NW 23 and Classen.


Edmond-based TEEMCO LLC. CEO Greg Lorson confirmed that the environmental company was experiencing “financial stress” after internal problems, he said in a phone interview.

Lorson said that while renovation has taken longer and cost more than originally anticipated, the company still plans to move into the building in November.

Lorson said the company is under financial stress after he fired TEEMCO’s Chief Financial Officer Michael S. Dixon in June. Although Lorson claims Dixon was fired due to “major dysfunction in his position,” Dixon disputes Lorson’s claims and says he resigned over disagreements about the company’s finances.

TEEMCO’s financial problems were first reported by the website Okctalk.com.

There certainly can't be any question about proper credit given in this.

[soonerguru]

Brianna's article.

http://www.oklahoman.com/article/5349252?embargo=1


There certainly can't be any question about proper credit given in this.

Pay wall. Thud.

[TheTravellers]

Pay wall. Thud.

Oklahoma City landmark Gold Dome saga continues with financial problems, conflicting claims from buyer | News OK

[Pete]

There certainly can't be any question about proper credit given in this.

They only say "financial problems were first reported" but not all the other things they mentioned in this article, such as the Gold Dome being stalled and the prison records of the two main TEEMCO executives.

Also, the advance blurb on the NewsOK website -- both the graphic and the words spoken by Dave Morris -- said "Financial Problems Halt Purchase of Gold Dome", but the article didn't say that at all.

There is much more to come on all this; still conducting interviews and research.

[Urbanized]

There has been a little activity around the place in the last 2-3 days; mostly grounds maintenance, which had been ignored for a while.

[Pete]

Reading back through the Gold Dome thread, posters reported all activity stopping in February.

Do they still have Christmas decorations up on the light poles in the parking lot? I know they did in April.

[Urbanized]

I don't think so. I'll look later.

[Canoe]

Reading back through the Gold Dome thread, posters reported all activity stopping in February.

Do they still have Christmas decorations up on the light poles in the parking lot? I know they did in April.

Yes just on some of the poles.

[ultimatesooner]

great work Pete, i need to hit the powerball so i can buy that yacht @ Texoma when it goes up for auction

[Plutonic Panda]

10/9/2014

These stars were still up

[macfoucin]

Heard a Teemco commercial on 1520, just now, during the OU Texas game.

[Pete]

Earlier this month, OKCTalk.com posted a story about Edmond-based TEEMCO, a company which had received a great deal of positive exposure and press where bold claims of the company and its chief executive were published without scrutiny or verification.

We documented in great detail key information which had not been previously reported, including the extensive criminal histories of its two top executives, dubious academic claims, concerning business activities, stalled work on its proposed new headquarters and extravagant spending. See our exclusive report: “Troubled times at TEEMCO”.

Now, our continuing investigation has uncovered something even more serious: Allegations that TEEMCO has engaged in practices whereby millions in federal taxes have gone purposely unreported and unpaid.

Unpaid employment taxes

OKCTalk was told by those with direct access to the TEEMCO books that the company has in fact never paid the federal taxes they have been withholding from employees since the company was formed in 2010, a cumulative amount of nearly three million dollars.

Through the normal course of business, TEEMCO – like most companies with full-time employees – issues paychecks which reflect government-mandated deductions for various state and federal taxes. Laws dictate that those funds be held in trust for the government, and are often referred to as “trust fund taxes”. There are specific rules that require expedient deposit to the Internal Revenue Service and other appropriate agencies on a strict schedule. It is important to note that TEEMCO processes all payroll internally rather than using an outside service.

However, OKCTalk has learned that over its entire four years of operation, TEEMCO has yet to forward a penny of the federal trust fund taxes and has instead kept the money for its own use.

Furthermore, employees tell us Chief Executive Officer Greg Lorson gave specific instructions to not pay these taxes or to set aside any funds for future payment. We were told the employment taxes have been used as operating funds and spent indiscriminately.

Reportedly, the issue first came to light in early 2011 when TEEMCO, having newly formed the previous June, skipped depositing the federal withholding taxes for both previous quarters. The initial plan was to set aside funds to cover the obligation, but the reserve account was soon abandoned and the company proceeded to operate without reporting or paying an ever-growing mountain of money that was owed to the government.

Although a small amount of employees involved with the company's finances and payroll were aware of this issue, they say they were given strict instructions by Lorson not to pay these back taxes, as the company had “other priorities”. As we also previously reported, just last year at the behest of CEO Lorson, TEEMCO splashed out hundreds of thousands for a 58-foot yacht and a private suite at Chesapeake Arena, among many other extravagances (see Lavish spending section from “Troubled times”). The IRS expressly forbids using employment taxes for general operations or paying others.

OKCTalk was told an IRS audit of a TEEMCO employee for the tax year 2013 recently brought the employment tax issue to the attention of others in the company. During the course of the audit, the IRS revealed it had no record of having received the taxes shown on the employee's W-2 form issued by TEEMCO, and thus a rebate was disallowed. The employee approached Greg Lorson who then allegedly authorized a quick bonus payment to the affected employee.

Social Security and retirement plan issues

Employees also reported problems with Social Security funds being properly credited to their accounts. In the case of Social Security, an employer is required to withhold 6.2% of an employee's gross salary for every pay period, then match that amount with their own funds. Similar to federal withholding taxes, Social Security is considered to be funds placed in trust by the employer and are to be deposited on a regular basis for each employee.

The Social Security Administration operates a website which allows individuals to monitor their running balance. Several employees told OKCTalk that in the process of checking their accounts, they found no funds had been deposited by TEEMCO for 2011 and beyond. The issue was reportedly raised to CEO Lorson early this year who only then authorized the payment of Social Security for first 2012, then 2011. Employees still report no new funds in their account since 2012.

Social Security and Medicare taxes are typically grouped together as “FICA” deductions, but it is not clear if TEEMCO is current on its Medicare obligations, or its state and unemployment taxes; or for that matter, the company's own federal income tax.

Additionally, employees report not being able to verify account balances in their TEEMCO retirement accounts. Employees told OKCTalk they have not received any sort of account statement and cannot get verification of where those funds are being held.

Possible consequences

Failing to pay employment and Social Security taxes are matters taken very seriously by both the Internal Revenue Service and the Social Security Administration with possible civil and criminal repercussions.

When taxes are not paid in a timely manner, there are often significant financial penalties and interest charges added to any outstanding balance which can quickly turn a large debt into an insurmountable sum.

Under Sec. 7202 of the Internal Revenue Code, a willful failure to pay over or collect tax is a felony punishable by up to a $10,000 fine or five years in prison, or both. There are many cases documented by the IRS where the failure to pay even a few hundred thousand dollars in a timely manner resulted in significant prison sentences.

Employees may also suffer because they may not qualify for social security, Medicare, or unemployment benefits when employers do not report or pay employment and unemployment taxes. Consequently, taxes withheld and paid by compliant employers are used to pay the refunds and social security benefits of employees whose employers did not pay the withheld taxes.

Also, the persons deemed responsible for paying these taxes are often held personally liable for the entire amount owed to the government. Bankruptcy laws do not provide protection in this area.

Uncertain future

Compounding the situation are the current financial difficulties faced by TEEMCO. Lorson told The Oklahoman in a 10/7/14 article, the company was experiencing “financial stress”. We had previously documented the company being seriously past due on many bills. (see Unpaid bills, near eviction section of “Troubled times”)

Records obtained by OKCTalk show only 28 employees have logged hours into the TEEMCO time tracking system in the month of October. Although we have learned a handful of employees are not required to use this system, it appears the total number of employees has dropped dramatically in just the last few months.

When Lorson first discussed moving TEEMCO headquarters to the Gold Dome he cited a rapidly-growing enterprise of 100 employees; now only a fraction of that number seem to be on the payroll. Former employees confirm large-scale firings and layoffs in recent months.

In the 10/7/14 Oklahoman article, Lorson said the company still intends to move to the Gold Dome.


OKCTalk's investigation of TEEMCO is ongoing.



Related Information

10/2/14: "Troubled times at TEEMCO", OKCTalk.com

10/7/14: “ Oklahoma City landmark Gold Dome saga continues with financial problems, conflicting claims from buyer“, The Oklahoman

June 2014: "The consequences of willful failure to pay payroll taxes", Journal of Accountancy

10/3/11: "Fail To Pay Payroll Tax: Go To Jail", Forbes

"Examples of Employment Tax Fraud Investigations -- Fiscal Year 2012", Official website of the Internal Revenue Service

[Pete]

Bumping this to the top.