Expatriate Owl

A politically-incorrect perspective that does not necessarily tow the party line, on various matters including but not limited to taxation, academia, government and religion.

Sunday, July 01, 2007

Ambulance Disservice

When the recent scandal regarding misuse of funds at various Long Island volunteer fire companies was breaking, I was ready to bet the mortgage money that there were more such instances in other localities, perhaps a bit more egregious. Unfortunately, nobody took me up on the wager.

Harvey S. Grossman, the ex-Treasurer of the Plymouth Community Ambulance Association has just been sentenced to 5 to 20 years for using over $2 Million in PCAA funds for personal expenses such as furniture, home improvements, travel, jet skis, his daughter's bat mitzvah party, racing his stock car, et cetera.

Co-defendants Jeff Cohen and George Gilliano, who didn't embezzle nearly as much as Grossman did and who apparently cooperated in making the case against Grossman, are slated for sentencing in a week and a half. The way I'm calling it: Jeff and George have good odds for seeing some amount of jail time, but not nearly as much as Harvey got.

And the way I'm calling it for Harvey: In 5 years, when he theoretically becomes eligible for release, the IRS crackdown against abuses by nonprofit organizations will have raised the public consciousness so as to make it politically unwise to spring Mr. Grossman the first time up. But he is likely to behave reasonably well in prison, so he is quite unlikely to stay in for the entire 20 years.

[Disclosure: A number of years ago, under circumstances having no relevance to the Blog and having no relevance to ambulances, I had several occasions to respectively meet both Harvey and Jeff. I do not recall ever meeting with George Gilliano.].

It is a maxim among tax enforcement personnel, in whose ranks I formerly served, that whenever money changes hands, information also changes hands. I have no particular personal ill will towards Harvey or Jeff (or, for that matter, George), but am taken aback by the crass stupidity respectively displayed by two individuals of above-average intelligence. The embezzled funds were, by and large, filched via credit card and check, two money transfer modes which tend to leave clear verifiable trails of information. If Harvey would have been content with less than two million bucks, he could have found some indirect ways to transfer assets without the tracking inherent in credit card postings and checking account drafts. Like syphoning a few gallons of gasoline from an ambulance every week, grabbing an occasional gallon of windshield washer fluid, et cetera.


This, by the way, is quite likely just the beginning of Harvey's and Jeff's and George's legal problems. Surely the IRS smells some tax potential in their cases. Embezzled funds count as gross income for taxation purposes, so Harvey, Jeff and George can expect to hear from the IRS (if they have not been contacted by the IRS already).

But never mind the income tax. The Internal Revenue Code also provides for what are euphemistically called "excise taxes" on improper transactions between tax-exempt organizations and the key personnel thereof. Without going into the complex convolutions of the Internal Revenue Code, there are instances, possibly applicable to at least some extent here, where the "excise tax" is equal to twice the benefit received! It is also worth noting that where there are more than one individuals involved in the scheme, they all can be jointly and severally liable for this "excise tax."

So, in addition to having to reimburse the PCAA, Harvey, Jeff and George most likely have some accounts to settle with the IRS (and, for that matter, the Pennsylvania Department of Revenue).

And if that were not problematic enough, I will note that the Form 990 which tax-exempt organizations are required to file with the IRS is, unlike other tax returns, open to public inspection. It takes a while for these forms to post on the Internet, but the PCAA 990s for 2003 and 2004 were each signed by Harvey. One need not be a tax lawyer with a MBA to know that Internal Revenue Code provides criminal penalties for filing false tax returns. Well, the IRS knows where to find Harvey for the next 5+ years.

I do feel bad for Jeff and Harvey (and George, too, even though I have never met him). But I feel even worse for the taxpayers of Plymouth Township.

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12 Comments:

  • At 04 October, 2007 16:05, Blogger Thoughts on life said…

    If you have met Harvey, then you know he is VERY intelligent -- and I don't think he was embezzling. He was using money he felt he had earned -- and since the 3 of them made up the executive board, he was sharing what he was using. His stupidity in this is beyond understanding -- they "caught" him because he had extensive records of everything they did and made no effort to hide it. He fired some volunteers for running a porn site off-hours at the Ambulance and they sent the investigators looking for rats who might have kept money from the soda machines....the tickets he bought were regularly given to volunteers, and the Rolex bought for him was for his 20 years of volunteer service, something that he had done for other volunteers who reached similar status. It's sad -- and while 5-20 might be the right amount of time to punish him, community service for that amount of time would have served a far greater purpose. The Ambulance was broke when he started to rebuild it -- they only had that much money for him to steal because he had brought in revenue with contracts with hospitals and municipalities. How he can make restitution from Graterford Prison remains to be seen -- and his two teen-age daughters were humiliated and his 3 year old son will grow up with a father in prison. Not a great outcome here -- and society surely does not benefit except by example (and had Harvey wanted to steal the money, he certainly would have been a great deal more clever)

     
  • At 04 October, 2007 16:07, Blogger Thoughts on life said…

    One more thing -- Harvey is a local Owl...

     
  • At 07 October, 2007 02:25, Blogger Expatriate Owl said…

    I (A) do not dispute any of your comments; and (B) stand by everything in my original posting.

    Harvey is not the first (nor will he likely be the last) Graterford inmate who, while basically an intelligent, well-intentioned and even honorable person, allowed his brain-box to warp his view of the world and allow him to get himself into big time major league trouble.

    I certainly sympathize with his family. But Harvey has nobody but himself to blame for this one.

    It is an unfortunate and tragic situation all around, for all sorts of reasons.

     
  • At 02 January, 2012 21:39, Anonymous Anonymous said…

    He's out.... No IRS....Almost no payback to Ambulance.....Great System....Still thinks he did nothing wrong...It will only be time before it happens again....

     
  • At 02 January, 2012 23:23, Blogger Expatriate Owl said…

    You are Anonymous, so I have no idea of from where you speak.

    My understanding is that Harvey is now out of Graterford, and in a residential drug/alcohol treatment program for nonviolent offenders.

    If, as you assert, Harvey does not recognize the wrongfulness of his misdeeds, then yes, it is highly likely that he will pull some kind of shtick in the foreseeable future.

    But how, pray tell, do you know that the IRS (or, for that matter, the Pennsylvania Department of Revenue) has not gotten at least some of its due from him? The bureaucratic wheels at the IRS do often grind rather slowly, but, given the IRS's emphasis on upping collections and using tax-exempt organization personnel as public examples, I wouldn't write off the IRS just yet.

     
  • At 07 February, 2012 04:15, Anonymous Anonymous said…

    How do you know he is out, and where is information to that effect? His lawyer wife divorced him I understand. ANd he never thought he did anything wrong to begin with -- so I can fully imagine he is content to be free. He will not scam anyone -- but his moral code is grey enough that he didn't think he scammed anyone before.

     
  • At 07 February, 2012 04:33, Blogger Expatriate Owl said…

    For the record:

    Go to the Pennsylvania Department of Corrections Inmate Locator utility at

    http://inmatelocator.cor.state.pa.us/inmatelocatorweb/

    And enter the name Grossman.

    You will find a Harvey Scott Grossman, Inmate No. HD5090.

    Harvey's current location is listed as "Self Help Movement, Inc." which is, as I already posted, "a residential drug/alcohol treatment program for nonviolent offenders."

     
  • At 27 March, 2013 06:20, Anonymous Anonymous said…

    So where is he a year later? Inmate locator has no record.

     
  • At 29 March, 2013 15:01, Blogger Expatriate Owl said…

    This comment has been removed by the author.

     
  • At 29 March, 2013 15:03, Blogger Expatriate Owl said…

    If he is not on Pennsylvania's official Inmate Locator, then he is no longer an inmate? Which means that he is out, walking the streets.

    Whether he is or is not rehabilitated and fit to circulate in society is another matter entirely; I hope, for Harvey's sake, for his family's sake, and for society's sake, that he has learned his lesson.


    Note: Unlike the Federal Inmate Locator

    http://www.bop.gov/iloc2/LocateInmate.jsp

    which retains inmate info even after the inmate is released, Pennsylvania's apparently drops its inmates from its database when they are sprung.

     
  • At 19 September, 2014 21:53, Anonymous Anonymous said…

    So now Gilliano is running another ambulance company in Royersford. watch the bank accounts.

     
  • At 21 September, 2014 15:05, Blogger Expatriate Owl said…

    I have verified that as of the 2010 tax year, George Gilliano was Deputy Chief of the ambulance operation attached to the Friendship Fire Company in Royersford, PA. I do not know whether or to what extent he has access to any office records, books, checkbooks or credit cards.

    It is entirely possible that George has learned from his experience with the criminal justice system.

    But if he pulls shtick at Friendship, they won't be able to say that they were not on notice regarding his propensities.

     

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