Telecommunications company owner Albert S.N. Hee went from a guy who spent $96,000 on massages to a guy who is looking at spending a big chunk of time in prison, according to Forbes. And it’s not the lavish spending per se that’s putting him away. It’s the numerous expense fraud charges for which he was found guilty following his 11-day trial in Hawaii.
Jurors found him guilty on each and every count presented at his trial, with convictions that include:
- Filing false income tax returns for the six years spanning from 2007 to 2012
- Obstructing the IRS for 10 years spanning from 2002 to 2012
- Directing his company of Waimana Enterprises to shell out millions for his personal expenses
- Falsely deducting corporate tax return payments as business expenses
- Failing to report payments as income on individual tax returns
Where the Millions Went
Hee’s company footed the bill for $4 million in personal expenses, with items that included:
- The massive personal massage bill of more than $96,000
- Paying his wife and kids full-time salaries, complete with benefit packages, although they did little or no work for his company
- Shelling out more than $736,000 for housing and college tuition for his three kids
- Covering personal credit card charges that included family trips to Switzerland, France, Tahiti and Disney World – to name a few
- Purchasing a $1.3 million house in Santa Clara, California, which he told accountants would be used as an employee retreat
The ‘Employee Retreat’
The so-called employee retreat ended up being home to two of Hee’s children, who testified at the trial that they lived there from 2008 to 2012 while in college. The house was within walking distance of the school. And no, they didn’t pay rent to his company.
In fact, the children actually collected rent from their college friends to whom they rented out other rooms of the house. They kept all proceeds they collected.
Hee’s sentencing is slated for October, where he faces three years in prison, along with fines and restitution, for each count on which he was convicted. Excessive spending alone is not a crime, but his actions of claiming personal expenses as business expenses and then trying to cover them up certainly is.
False descriptions of expenses were part of Hee’s game plan, with one example from his travel logs. He categorized one family getaway at a resort as a “stockholder’s meeting.”
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Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.