Other People's Money

The address was in Bethesda, Maryland. An upscale house with a meticulously trimmed lawn, its driveway lined with several luxury-brand SUVs.

Sarah trailed me up the walk and sighed.

"Bit much for a guy who filed for bankruptcy today, isn't it..."

"Yeah, nice lawn."

"They must have landscapers out on a regular schedule. A place like this."

"As if it stops at landscaping. I'd wager there's a ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠cleaning staff of at least three on the permanent payroll."

I pressed the doorbell.

The door opened. A man in his fifties stood there in slippers and a cardigan, a mug in his hand, the smell of coffee drifting out past him.

"...And you are?"

"Mr. Randall Keller?"

"That's me."

I flipped open my credential wallet.

"Agent Leo Kim, IRS Collection Division."

The mug tilted slightly. Coffee ran over the back of his hand, and he didn't seem to notice at all.

"An IRS agent? But our attorney contacted you people today, I'm certain—"

"Ah, if you mean the bankruptcy filing, I've heard."

"Then you understand. There's no point in your coming out here now."

Keller narrowed the door.

"I'm not some man who gets taken because he doesn't know how this works. All further conversation goes through my attorney or my accountant."

"Mr. Keller."

I opened the folder I'd been carrying under my arm.

"I'm not here today about Keller Staffing Solutions."

"...Pardon?"

"I'm here about the taxes about to be assessed against Randall Keller—personally."

Silence.

"I have no idea what you're talking about. I owe nothing in personal taxes. I've filed on time, every single time."

"Ah, but that tax hadn't been assessed back then. You'd have had no way of knowing."

I drew out a single sheet and held it up in front of him.

"Internal Revenue Code Section 6672. The Trust Fund Recovery Penalty."

Keller's eyes ran across the paper.

"You've probably heard of it. If your accountant never saw fit to tell you, allow me. When a company withholds taxes from its employees' wages and fails to send that money to the Treasury, the government can assess the entire unpaid amount directly against whoever held the authority to decide how that money was used and paid. In this case, that's you, Mr. Keller."

"That has nothing to do with me. It's—it's company money one way or another. I've already filed for bankruptcy—"

"No."

I shook my head.

"Withholding taxes are never treated as company money. They were carved out of your employees' paychecks. Put simply, the company is nothing but an errand boy here—holding the cash for a moment and passing it along on someone else's behalf."

Keller said ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠nothing.

"If money you were holding in trust never got sent, then all you've done is spend other people's money. And seen in that light, Mr. Keller, you've been spending other people's money this entire time."

The color was draining from Keller's face.

"And the liability for spending other people's money doesn't vanish in bankruptcy. Under Section 523 of the Bankruptcy Code, trust fund penalties are excepted from discharge."

Behind me, Sarah let out the tiniest "whoa."

"...Why don't you come in, then."

Keller opened the door.

The living room was spacious. A family photo hung above the fireplace—two children, the couple. Taken at a beach, by the look of it.

I gave the photo a moment.

So there were kids in this house, too.

My mood soured, and not mildly. The living rooms of the eighty-four people who'd worked at Keller Staffing and been robbed would have photographs exactly like this one hanging in them. Push the thought a step further, and it brushed against my own personal history as well. Not that I had any intention of letting private feelings show in the field.

I sat down on the sofa and spread the folder open on the coffee table.

"Let's establish the facts first."

"One moment—let me call my attorney."

"Go ahead. I'll have some tea while you do."

Faced with that composure, Keller picked up his phone—and then, as though he simply couldn't win, set it right back down.

"...Fine. Just say what you came to say."

"Gladly. From the second quarter of last year through the first quarter of this one, Keller Staffing filed the relevant employment tax returns four times. Every one of them carried your electronic signature."

I turned to the first page.

"Here's what those returns said. An average of eighty-four employees. Total withholding of $1,650,000. The amount actually remitted was $22,000. Does that make sense to you?"

"We had cash flow problems. The prime contractor wasn't paying us."

"Which prime?"

"...Castle Rock."

Well, well—he'd hand that over just like that? This was about to become key evidence that this man and Castle Rock were in bed together. I caught myself patting my jacket pocket, double-checking that the recorder was still there.

"I'll look into the overdue payments. But, Mr. Keller—"

I turned the next page.

"If you couldn't pay the taxes for lack of funds, then there shouldn't have been funds for anything else during that same period. Isn't that right?"

"Naturally, I kept spending to the bare minimum."

"This is the withdrawal record from the corporate account for the third quarter of last year."

I turned the paper around and slid it across to him.

"September third, $120,000 to KJ Partners LLC. September seventeenth, another $85,000 to the same. In October, $90,000 more."

Keller flinched as he read.

"Those are subcontracted service fees."

"Somehow I doubt it. KJ Partners' registered address is this house."

The living room went quiet.

"The principal is listed as a Karen Keller... that would be your wife?"

"Zero employees. No place of business. And yet over eight months, $610,000 flowed out of the corporate account."

I produced one more sheet.

"In that same period, the amount that went to the Treasury was zero dollars."

Keller's hands were trembling on his knees.

"Mr. Keller. You didn't fail to pay your taxes because you had no money. You had the money—and you parked it under your wife's name to make it disappear."

"Those were legitimate transactions. My wife was providing HR consulting—"

"Where's the consulting contract?"

"The invoices? The deliverables? Is there even a single email corroborating that any of this work happened?"

Keller didn't answer.

"The IRS weighs evasion on two criteria: willful, or not willful. Very simple, isn't it?"

I raised one finger.

"You were the sole authorized signatory, and you signed those returns yourself."

A second finger went up.

"And knowing the taxes were unpaid, you paid other creditors with that money instead—one of those creditors being your own wife. In a willfulness determination, the evidence does not get any clearer than that."

I closed the folder.

"There's ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠no climbing out of this one, Mr. Keller."

"Now—hold on just a minute."

At that, Keller threw up a hand. His voice had cracked.

"Hold on. So all of those taxes—they come to me?"

"No. What I just described covers only the trust fund portion of the unpaid principal. Interest accrues across the entire delinquent period. And once we calculate in the other assessments I haven't detailed yet, back-of-the-envelope... you're looking at three, maybe four, million dollars."

"...Why, you highway robber!"

"Highway robber? Don't you dare insult the people who pay their taxes honestly. And by the way... you do own this house, Mr. Keller?"

Keller shot to his feet.

"Hey! You're telling me to sell this house for taxes? I've got two kids! My eldest goes to college next year!"

I looked up at him.

"I'd wager more than a few of the eighty-four who worked at Keller Staffing were in exactly that situation."

"That's—"

"Their pay stubs show the taxes coming out, Mr. Keller."

I rose from my seat.

"Those people live their lives believing their taxes were paid. Except the IRS records show no payment history for any of them. They won't discover that gap until they've retired and sit down to calculate their Social Security. And by then, there'll be nothing anyone can do."

"You erased months of their labor from their lives."

Keller sank onto the sofa.

Behind me, I heard Sarah draw a quiet breath.

"...Agent Kim."

Still seated, he was staring ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠at the family photo above the fireplace.

"I never wanted it to be this way from the start."

"In the beginning it really was just late payments. I figured I only had to push it back one quarter, then pay it all in a lump the next. But Castle Rock went four months without paying us, and at the very end they came back with this: cut the labor rate by fifteen percent, and they'd release everything they owed in one go."

So that was the story.

Not that it was our problem, frankly. That was the sort of thing you nail down when the contract terms get hammered out in the first place.

"What would've been left of us after a fifteen percent cut? So I told them—do that and we go under. And they just smiled and shrugged."

Keller stared straight at me.

I said nothing.

"So... they taught it to me. This way of dodging taxes. Told me every one of their subcontractors does it the same way—washed my guilt right down the drain."

"Everybody does it," he says.

Something had gone sour deep in my chest.

Six subcontractors. Which meant the victims wouldn't stop at eighty-four. Even a rough guess put it north of five hundred.

And among those victims was someone close to me. My father.

Damn it.

Watching that mouth of his rattle on and on even now, I could feel my patience starting to run dry.

I pressed it down and forced the words out.

"Mr. Keller."

"...Yes."

"The person who told you all this. Do you remember the name?"

Keller hesitated for a beat.

"...Derek Vaughn. Castle Rock's chief financial officer."

Once we were in the car, Sarah said nothing for a while.

Somewhere around when I started the engine and pulled onto the main road, she spoke quietly.

"Leo."

"Yeah."

"Back there, at that house..."

"Go ahead."

"Honestly? I felt a little sorry for him. When he mentioned the two kids."

Sarah looked out the window.

"But when you brought up the eighty-four at the end, I realized what I'd had wrong."

"Which was what?"

"The only person I saw as a person was the one standing right in front of me. The eighty-four in the file were just numbers to me. You're incredible, sir."

I looked at her through the rearview mirror.

"Sarah."

"Yes."

"Now that you understand that, you've become an agent in the truest sense."

Sarah's shoulders squared with pride.

By the time we returned to the office, it was past four in the afternoon.

Margo Chen was standing at my desk.

"Leo. The bank came back to us."

"Progress on the KJ Partners front, then."

"That's right. The levy's been executed. The entire account balance is frozen. And the two automatic payments scheduled to go out of that account this month have been blocked as well."

Margo took off her glasses.

"Leo."

"Yes."

"In twelve years at the IRS, I have never once seen anyone squeeze an actual recovery out of a corporation that had already filed for bankruptcy."

"Ha, I got lucky."

"Lucky?"

Margo put her glasses back on.

"You'd already pulled the supporting documentation last night, before any of this broke. Exactly how far ahead do you see? That's one hell of a talent you have."

I smiled.

Beside me, Sarah thrust her hand up.

"Chief! It was unreal. The guy was laughing about how he'd already filed for bankruptcy, and then the second Leo opened his mouth, his face drained white—"

"Sarah."

"Yes, ma'am!"

"From where I'm standing, you didn't exactly do anything. So why are you so hyped up hovering next to Leo?"

"I'm not! I'm not hyped. I was simply... moved."

Margo gave a hollow laugh and shook her head.

I sat down at my desk and opened my notebook. Derek Vaughn. Chief Financial Officer, Castle Rock. Beneath the name, I added one more line.

If all six were built on the same structure, then this was no one man's sin. It was a system the prime contractor had designed.

Derek Vaughn. Was it you who drew it up?

I was clicking my pen when my hand stopped.

The desk phone was ringing. Not an internal line—an outside call.

© Kim Okji#1v8mj