Colorado Business Litigation Lawyer Blog

An analysis by Canadian researchers of over 4,000 studies conducted from 1950-2009 concludes that drinking light to moderate amounts of alcohol (1 drink per day for women and 2 drinks for men) reduces by as much as 25% the risk of multiple cardiovascular outcomes, including incidence of and mortality from coronary heart disease and stroke, compared with persons who don't drink at all.

A separate review found that moderate imbibing increases the levels of "good" cholesterol in the body.

The researchers emphasize that a careful balance should be made between the concepts of drinking large amounts of alcohol being bad for overall health, while moderate drinking can have health benefits.

Of course, the message remains clear that overconsumption of alcohol causes numerous societal problems, including domestic and other violence, various kinds of criminal activity, child abuse and neglect, injuries and death caused by impaired driving and many other serious adverse consequences.

Forty luxury homes were sold in January with selling prices of over $1 million, for a 48% increase over January 2009 and a whopping 78% increase over January 2010. For the same 2010-2011 time period, sales of all homes in the Denver metro area decreased by 8.4%.

Can we reasonably draw any conclusions from this information about which segment of the population is being hardest hit by our sluggish economy?

Hey buddy, can you spare a million?

Starting in the late 1990s, HealthSouth Corporation, which advertises itself as the nation's largest provider of inpatient rehabilitative healthcare services, began intentionally overstating its earnings in order to meet expectations of Wall Street analysts.

Then in 2002, HealthSouth added non-existent "miscellaneous" assets to its Colorado ledgers to balance its books. It did the same in other states across the nation. By 2003 it had overstated its earnings by at least $1.4 billion. HealthSouth then began filing misleading personal property declarations with Boulder County and other state taxing authorities, to match its fraudulent accounting to avoid raising the suspicion of federal authorities. It then paid personal property taxes on these non-existent assets.

In 2004, HealthSouth filed with Boulder County petitions for refund of taxes paid in 2002. HealthCare admitted that it had inflated income with matching entries to non-existent assets in a fraudulent scheme, and had paid taxes on those bogus assets. Boulder County denied the refund under a Colorado statute it believed controlled the situation.

On appeal, the Colorado Board of Assessment Appeals (BAA) dismissed the petitions, upholding Boulder County. The Colorado Court of Appeals, in a split decision, reversed the BAA, giving a broad interpretation to "overvaluation" of assets as a ground for authorizing a refund.

The Colorado Supreme Court reversed the Colorado Court of Appeals, holding after careful analysis that none of the four conditions for refund authorized by the statute had been met nor existed. These reasons include (1) erroneous valuation for assessment; (2) irregularity in levying; (3) clerical error; and (4) overvaluation.

Intentionally paying taxes on properties it knew did not exist in order to perpetuate a fraudulent scheme does not authorize a refund of those taxes, period.

All Colorado business taxpayers should read the full opinion of the Colorado Supreme Court here.

Hearty congratulations to the Boulder campus of C.U. for being the number one school in 2011 in providing the Peace Corps with 117 undergraduate alumni currently serving overseas in the Peace Corps. C.U. has been in the top three providers of volunteers since 2004. And for the first time this year, both C.U. and Colorado State University in Fort Collins made the top 10.

C.U.-Boulder is the number 5 all-time school for volunteers, having sent 2,269 volunteers into Peace Corps service since it was established by President Kennedy in 1961. Currently, the Peace Corps has 8,655 American volunteers working in 77 countries.

The Peace Corps is just one of 12 campus programs overseen by CU-Boulder's Institute for Ethical and Civic Engagement. Congratulations to the institute for its excellent performance.

For more information about the Peace Corps click here.

In a recent article [click here], we wrote about Dan Flanagan, a Colorado Vietnam vet undergoing treatment for bone marrow cancer, whose health insurance was canceled over a two cent shortage in a premium payment.

On January 26, after public outcry resulting largely from Denver's NEWS7's coverage on the issue, Ceridian,--the administrator for the vet's claim-- asked the fiduciary, a former employer, to reinstate the health coverage. Thankfully, the fiduciary agreed to the reinstatement.

The action taken by Ceridian and the fiduciary was the decent thing to do, even though it may not have been legally required.

We are pleased to observe that large business organizations are not always without compassion and concern for the individual in need.

A tip of the hat to Denver NEWS7 for its timely coverage of the story. And the best of luck to Dan Flanagan and his family.

Colorado's Channel 7NEWS reports that Ron Flanagan, a Vietnam vet's health insurance was canceled because of a $.02 (yes, that's two cents) premium underpayment.

Frances Flanagan, the veteran's wife, mistakenly paid $328.67 for the monthly premium payment instead of the $328.69 that was due. She says that when making the online payment for November, she hit the 7 key instead of the 9 key. A check for the full December premium was received and cashed by Ceridian Cobra Services, the Flanagan's Florida-based insurance administrator; nevertheless, Ceridian canceled the Flanagans' health insurance policy.

Here's the rub: the Flanagans say they first found out about the cancellation on January 13, just as Ron was being prepped for a bone biopsy at a Broomfield medical center in connection with his struggle with multiple myeloma--bone marrow cancer-- that was diagnosed in September 2008 and is believed to have been caused by Ron's exposure to Agent Orange in Vietnam..

Ron has had two surgeries for stem cell transplants and needs another by February. A donor is available, but Ceridian will not pay for the procedure. The transplant can be done by the VA hospital, but would require Ron to travel to Seattle. In the meantime, Ron may start oral chemotherapy to help manage his condition.

A Ceridian spokesperson told 7NEWS that the company canceled the policy because of the insufficient payment and that the Flanagans were sent several notices of the shortage, together with more than one grace period reminder notice, all consistent with COBRA regulations. The Flanagans say that nothing they received clearly informed them that they could be dropped; otherwise, they would have just added the two cents to the December payment.

Don't you think a simple telephone call probably would have solved the problem? Ceridian says they "simply do not have the capacity to be able to personally call continuants and remind them of the status of their COBRA benefits."

You be the judge.

Continue reading "Business as Usual?" »

A bookkeeper for a Colorado financial company was arrested at her home in Jefferson County last Friday for investigation of embezzling $760,000 from a Boulder financial company, starting just two months after she began working for the company in 2006.

Another accountant, who was filling in for the regular accountant while she was off work, discovered that large money transfers were being made into two personal bank accounts. The company then had an audit conducted and notified police of the suspected embezzlement.

This type of employee defalcation seems to happen with regularity, not only in Colorado, of course, but also in states across the nation. The most common cause in these thefts of an employer's funds most often is the lack of regular audits, both internal and external.

All the glowing references in the world for a new bookkeeper or accountant and all the trust that a company develops for that employee should never take the place of regular audits. In addition, employee defalcation insurance -commonly called fidelity bonds--are a must. This type of insurance recognizes that even trusted employees have been know to steal, in which event the employer is reimbursed for the loss by the insurance company.

All businesses should institute basic guidelines to help prevent or minimize employee dishonesty. These guidelines should include at a minimum such steps as making sure that an employee who receives money on behalf of the business is not the same employee who makes the bookkeeping entry for that same money. Another safeguard is seeing that a duplicate of deposit slips prepared by one employee are kept and then compared by a different employee with bank receipts, to ensure that deposit slips are not altered on the way to the bank.

Large business corporations mostly are well aware of how to protect themselves against employee embezzlements. Sometimes, however, medium and smaller businesses tend to be more lax in employee oversight and make themselves vulnerable to financial losses from employee theft.

Continue reading "Companies Must Conduct Regular Financial Audits" »

According to a report issued by the Federal Trade Commission (FTC), Colorado was among the most scammed states in 2009. In its latest annual report, the FTC concludes that Colorado residents ranked high in fraud and identity theft complaints.

Colorado ranked second only to Nevada in fraud and other complaints, with 412.4 complaints per 100,000 population (20,772 complaints), and ninth in identify theft complaints, with 95 complaints per 100,000 population (4,775 victims).

The report's data are based upon 1.3 million unverified complaints received by the FTC, the Consumer Sentinel Network the Internet Crime Complaint Center, Better Business Bureaus, Canada's PhoneBusters, the U.S. Postal Inspection Service, the Identity Theft Assistance Center, and the National Fraud Information Center, among others. Fraud complaints were 54%, 21% were identify theft complaints and 25% were other types of complaints.

No less than 40% of the fraud complaints by method of payment involved credit cards. And a whopping 48% involved contact with victims by internet and e-mail. Victims in the 40-59 age group amounted to one-half of all victims.

As the data amply demonstrate, if there is a way to defraud people, it has been done; if not, there are dishonest individuals and companies who are busily thinking of ways to do it. One way of providing yourself with at least some means of protection is to jealously safeguard personal information such as social security number (including your child's), passwords, middle name (often used as a password), date of birth, address, and telephone number. Always ask why any such information is being requested and refuse to part with if it the explanation doesn't satisfy you.

You have the right to obtain a free copy of your credit report at least every twelve months at annualcreditreport.com. Be sure to analyze the credit report carefully for accuracy and for unexplained inquiries or transactions. Report discrepancies promptly.

To view the full FTC report click here.