Justia White Collar Crime Opinion Summaries

Articles Posted in Alaska Supreme Court
Johnny Williams worked for Violeta Baker and her home healthcare services company, Last Frontier Assisted Living, LLC (Last Frontier), from 2004 to 2009. Baker hired Johnny to provide payroll, tax-preparation, bookkeeping, and bill-paying services. She authorized him to make payments from her accounts, both for tax purposes and business expenses, such as payroll. She also gave him general authority to access her checking account and to execute automated clearing house (ACH) transactions from her accounts. In addition, Baker allowed Johnny to write checks bearing her electronic signature. Johnny did not invoice Baker for his labor; rather he and Baker had a tacit understanding that he would pay himself a salary from Baker’s payroll for his services. In 2009 the Internal Revenue Service (IRS) notified Baker that her third-quarter taxes had not been filed and she owed a penalty and interest. Baker contacted Johnny to find out why the taxes had not been filed. When he could not produce a confirmation that he had e-filed them, Baker contacted her son for help. Baker’s son discovered that several checks had been written from Baker’s accounts to Personalized Tax Solutions (a business he maintained) and Deverette. A CPA audited the books and found that Johnny’s services over the time period could be valued between $47,500 and $55,000. Subtracting this from the total in transfers to Johnny, Deverette, and Personalized Tax Solutions resulted in an overpayment to the Williamses of approximately $950,000. A superior court found Deverette and Johnny Williams liable for defrauding Baker, after concluding that both owed her fiduciary duties and therefore had the burden of persuasion to show the absence of fraud. The court totaled fraud damages at nearly five million dollars and trebled this amount under Alaska’s Unfair Trade Practices and Consumer Protection Act (UTPA). After final judgment was entered against Deverette and Johnny, Johnny died. Deverette appealed her liability for the fraud. The Alaska Supreme Court affirmed Deverette’s liability for the portion of the fraud damages that the superior court otherwise identified as her unjust enrichment. But the Court reversed the superior court’s conclusion that she owed Baker a fiduciary duty, and reversed the UTPA treble damages against Deverette. The Court vacated the superior court’s fraud conclusion as to Deverette and remanded for further proceedings. View "Williams v. Baker" on Justia Law