May 18, 2007, Newsletter Issue #12: Sample Wage Garnishment Cases

Tip of the Week

DebtHelp.com Tip: Here is an actual case involving IRS garnishments, taken from the IRS public records.

On February 9, 2005, in Sacramento, CA, Masako Lesh was sentenced to 18 months in prison and ordered to pay a $5,000 fine. Lesh pleaded guilty to bankruptcy fraud and money laundering charges on December 1, 2004. According to court documents, in 1998 Lesh and co-defendant, Mark Burelle, started EliteCom, an electronic components supply business, that acted as a broker for electronic components. On August 26, 1999, Lesh's previous employer, Channel Tek International Corporation (Channel Tek) obtained a judgment in which Lesh was ordered to pay Channel Tek damages in the amount of $164,970. As part of her plea agreement, Lesh admitted that beginning March 7, 2000, and continuing through November 2004, she devised and participated in a scheme and artifice to defraud Channel Tek out of its judgment.

On March 7, 2000, Lesh filed a voluntary Chapter 7 bankruptcy protection in which she fraudulently failed to disclosure her interest in EliteCom as an asset, even though it was a very profitable business. In addition, in response to a wage garnishment order obtained by Channel Tek in May 2001, Lesh submitted an "Employer's Return" to the Levying Officer which fraudulently stated that she was no longer employed by EliteCom. However, notwithstanding what she represented on the "Employer's Return," Lesh admitted that from May 2001 through 2004, she used assumed names to continue to work for, and earn significant compensation from EliteCom. Finally, Lesh admitted that she made multiple false and fraudulent representations and claims concerning her bankruptcy proceeding in a deposition in October 2001.

On a smaller scale:

Jane Doe owed the IRS $3,000 in back taxes. After numerous unsuccessful attempts to contact her to resolve this matter, the IRS finally implemented a wage garnishment against Jane. Each pay period, Jane’s employer was to deduct $500 from Jane’s check and submit it to the IRS. This amount would be used to pay off her unpaid tax bill. This wage garnishment process continued for six pay periods until all of Jane’s back taxes were paid in full.

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