1 00:00:06,233 --> 00:00:08,533 You opened the restaurant. You have a two-year lease. 2 00:00:08,600 --> 00:00:09,867 You were affected by COVID. 3 00:00:10,700 --> 00:00:12,533 - Yes. - [Judge DiMango] And as a result, 4 00:00:12,600 --> 00:00:15,266 you sir, applied for PPP loans? 5 00:00:15,333 --> 00:00:17,033 Yes, my company did. 6 00:00:17,100 --> 00:00:21,033 You say that he kept all of the money owed to you for your employees. 7 00:00:21,433 --> 00:00:22,533 Because it's free money. 8 00:00:22,600 --> 00:00:25,200 That's the fraud on the American public. 9 00:00:25,266 --> 00:00:28,100 [announcer] Now on Tribunal Justice. 10 00:00:28,166 --> 00:00:31,533 ["Ride of the Valkyries" plays] 11 00:00:49,567 --> 00:00:53,000 [announcer] Today's case was filed in Palm Springs, California. 12 00:00:53,500 --> 00:00:56,166 [Byrd] Your Honor, this is case number 2077 on the calendar 13 00:00:56,233 --> 00:00:58,333 in the matter of Gornes versus McFarlane. 14 00:00:58,400 --> 00:00:59,967 - Thank you, Byrd. - You're welcome, Judge. 15 00:01:00,100 --> 00:01:02,700 Parties have been sworn in. You may be seated. 16 00:01:03,500 --> 00:01:04,700 Okay. Ms. Gornes, 17 00:01:04,766 --> 00:01:07,934 you and Mr. McFarlane had a business relationship. 18 00:01:08,000 --> 00:01:10,467 You were actually leasing a space 19 00:01:10,533 --> 00:01:13,800 in his club, Shadow Mountain... 20 00:01:13,867 --> 00:01:14,967 - Resort. - [Judge DiMango] Resort. 21 00:01:15,033 --> 00:01:17,033 And you were opening a restaurant 22 00:01:17,100 --> 00:01:18,533 - in that space. - Yes. 23 00:01:18,600 --> 00:01:20,233 [Judge DiMango] And you took a two-year lease 24 00:01:20,300 --> 00:01:22,633 and you had the option to renew again for two years. 25 00:01:22,700 --> 00:01:24,533 - Was that correct as well? - Correct. Yes. 26 00:01:24,600 --> 00:01:26,734 And in your business, you were affected by COVID, 27 00:01:26,800 --> 00:01:29,934 and as a result, you sir, Mr. McFarlane, 28 00:01:30,000 --> 00:01:31,934 applied for PPP loans. 29 00:01:32,000 --> 00:01:33,233 Yes, my company did. 30 00:01:33,300 --> 00:01:35,033 [Judge DiMango] You're here on behalf of Shadow Resort 31 00:01:35,100 --> 00:01:38,100 and you're here on behalf of your business, which is Delish... 32 00:01:38,166 --> 00:01:40,133 - Bistro and Bar. Correct. - [Judge DiMango] Bistro. 33 00:01:40,200 --> 00:01:42,200 You say that he kept all of the money, 34 00:01:42,265 --> 00:01:44,800 when in fact he should've given you the monies 35 00:01:44,866 --> 00:01:47,600 that were owed to you for your employees. 36 00:01:47,667 --> 00:01:50,366 That these PPP loans, as we know, 37 00:01:50,433 --> 00:01:54,400 were meant to help small businesses during COVID, 38 00:01:54,467 --> 00:01:56,633 help pay payroll, help pay loans, 39 00:01:57,033 --> 00:01:59,300 any kind of expenses that the business had 40 00:01:59,366 --> 00:02:02,967 and you were entitled to your share based on your employees, 41 00:02:03,033 --> 00:02:05,934 except he used your employees 42 00:02:06,000 --> 00:02:08,100 to collect the money that he did. 43 00:02:08,166 --> 00:02:11,233 You say he owes you $27,000 plus 44 00:02:11,300 --> 00:02:14,867 but because of our maximum, you're suing him for $10,000. 45 00:02:14,934 --> 00:02:17,033 But you say was they weren't her employees. 46 00:02:17,100 --> 00:02:20,200 They were your employees. You were paying them through your payroll. 47 00:02:20,266 --> 00:02:24,500 Therefore, she shouldn't have gotten the PPP as to those individuals. 48 00:02:24,567 --> 00:02:27,033 And even if that weren't the case, 49 00:02:27,100 --> 00:02:29,867 you had maintenance issues that you still have to address 50 00:02:29,934 --> 00:02:32,000 and that would basically be a wash, 51 00:02:32,066 --> 00:02:33,133 - correct? - Yes. Yes. 52 00:02:33,200 --> 00:02:36,133 [Judge DiMango] Okay. I don't know very much about all of this, 53 00:02:36,200 --> 00:02:40,033 but I understand, sir, that you are an accountant. 54 00:02:40,100 --> 00:02:41,466 - Yes. - [Judge DiMango] And that you do have 55 00:02:41,533 --> 00:02:43,400 some expertise in this area, 56 00:02:43,466 --> 00:02:44,667 - so please let's have your name... - Yeah. 57 00:02:44,734 --> 00:02:46,233 - ... for the record. - Craig Carr. 58 00:02:46,300 --> 00:02:50,600 I'm a ERC and PPP specialist in restaurants. 59 00:02:50,667 --> 00:02:52,266 And how long have you been working 60 00:02:52,567 --> 00:02:55,066 - in the capacity you've just discussed? - Thirty years. 61 00:02:55,133 --> 00:02:56,567 [Judge DiMango] So, you are being brought here 62 00:02:56,633 --> 00:02:59,066 as a witness for the plaintiff, is that correct? 63 00:02:59,133 --> 00:03:00,200 That is correct. 64 00:03:00,266 --> 00:03:02,467 Now, why don't you be a little more detailed than I was 65 00:03:02,533 --> 00:03:05,033 with regard to the PPP, 66 00:03:05,100 --> 00:03:06,867 when it came about, and why? 67 00:03:06,934 --> 00:03:07,934 Okay. 68 00:03:08,000 --> 00:03:12,400 The PPP came about in March of 2020 69 00:03:12,467 --> 00:03:15,367 and started to formulate and give out money 70 00:03:15,433 --> 00:03:17,700 from the federal government under the CARES Act. 71 00:03:18,100 --> 00:03:19,433 - [Judge DiMango] Okay. - And like you said... 72 00:03:19,500 --> 00:03:23,100 - [Judge DiMango] Yes. - ... the PPP was to serve business owners 73 00:03:23,166 --> 00:03:25,300 to help them cover their payroll, 74 00:03:25,367 --> 00:03:28,934 maintenance during coronavirus times. 75 00:03:29,000 --> 00:03:31,300 [Judge DiMango] Now, how was the amount of money determined 76 00:03:31,367 --> 00:03:32,767 after they applied? 77 00:03:32,834 --> 00:03:35,734 It's determined based on how many employees you had 78 00:03:35,800 --> 00:03:37,166 in a certain period of time. 79 00:03:37,233 --> 00:03:40,133 Then, the federal government would give you a certain amount of money 80 00:03:40,200 --> 00:03:42,166 based on how many employees you had 81 00:03:42,233 --> 00:03:44,734 in 2019 for 2020, 82 00:03:44,800 --> 00:03:46,667 in 2020 for 2021. 83 00:03:46,734 --> 00:03:50,233 It would also, I imagine, have to be based on how much money 84 00:03:50,300 --> 00:03:52,900 the employer is earning in their business. 85 00:03:52,966 --> 00:03:55,633 Otherwise, everybody would be getting the same amount of money. 86 00:03:55,700 --> 00:03:57,466 Actually, not. Not for the PPP 87 00:03:57,533 --> 00:03:58,567 - and not for the ERC. - [Judge DiMango] No? 88 00:03:58,633 --> 00:03:59,834 It's all based on... 89 00:03:59,900 --> 00:04:01,266 Just the number of people. 90 00:04:01,333 --> 00:04:03,233 So, everybody got a flat amount? 91 00:04:03,300 --> 00:04:04,533 Everybody got a flat amount 92 00:04:04,600 --> 00:04:06,767 based on how many employees they were taking care of. 93 00:04:06,834 --> 00:04:10,200 So, if you have five employees and everybody's entitled to $10,000 94 00:04:10,266 --> 00:04:11,767 and you--then you get $50,000. 95 00:04:11,834 --> 00:04:12,967 If you have nine employees, 96 00:04:13,033 --> 00:04:14,033 - you get $90,000. - Correct. 97 00:04:14,100 --> 00:04:16,132 So, was there a fixed number for each employee? 98 00:04:16,200 --> 00:04:20,867 Well, for ERC, it's, um, $5,000 an employee for 2020, 99 00:04:20,934 --> 00:04:23,767 $7,000 an employee for 2021 100 00:04:23,834 --> 00:04:25,467 - for each quarter. - Now, what is--what is ERC 101 00:04:25,533 --> 00:04:27,266 and how is that different from PPP? 102 00:04:27,332 --> 00:04:29,166 - [Craig] Good question. - And I'm gonna say LOL, 103 00:04:29,233 --> 00:04:30,500 which is how I feel about all this. 104 00:04:30,567 --> 00:04:31,600 Those are very good questions. 105 00:04:31,667 --> 00:04:35,367 I wish there was, uh, you know, a program called LOL, but unfortunately. 106 00:04:35,433 --> 00:04:37,233 Um, so the ERC, 107 00:04:37,300 --> 00:04:39,567 that's called Employee Retention Credit. 108 00:04:39,633 --> 00:04:42,300 It was another program, like the PPP, 109 00:04:42,367 --> 00:04:44,734 except unlike the PPP, 110 00:04:44,800 --> 00:04:49,266 the ERC is not required to be paid back or proven to be forgiven. 111 00:04:49,332 --> 00:04:52,433 [Judge DiMango] So now, Ms. Gornes, you opened up a restaurant. 112 00:04:52,800 --> 00:04:54,767 Did you ever own a restaurant before this? 113 00:04:54,834 --> 00:04:57,800 I managed several restaurants before that, yes. 114 00:04:57,867 --> 00:05:00,633 And how did you come to find the defendant? 115 00:05:00,700 --> 00:05:02,633 I was looking for kitchen space 116 00:05:02,700 --> 00:05:04,867 and I came across his business partner. 117 00:05:04,934 --> 00:05:06,834 Uh, the restaurant was closed. 118 00:05:06,900 --> 00:05:09,934 Uh, we are still in summer time and in full COVID. 119 00:05:10,000 --> 00:05:11,567 It's an outdoor bistro 120 00:05:11,633 --> 00:05:14,400 and I wanna know, is this Delish Bistro? 121 00:05:14,467 --> 00:05:16,367 - [Karine] Correct. - [Judge DiMango] And Mr. McFarlane, 122 00:05:16,433 --> 00:05:19,133 your club had a restaurant there before, correct? 123 00:05:19,200 --> 00:05:22,367 Yes. Like in this situation, there were also employees. 124 00:05:22,433 --> 00:05:26,400 And we elected to not bring them back after COVID 125 00:05:26,467 --> 00:05:28,100 and lease her the facility. 126 00:05:28,166 --> 00:05:30,166 But Ms. Gornes had a lease. 127 00:05:30,233 --> 00:05:31,734 And if she would've said too, you know what, 128 00:05:31,800 --> 00:05:33,400 I'm not gonna come in anymore, 129 00:05:33,467 --> 00:05:35,800 you would've said, well, you still gotta pay me on the lease, right? 130 00:05:35,867 --> 00:05:37,667 The lease was for $0. 131 00:05:37,734 --> 00:05:38,734 - [Judge DiMango] I saw that it was... - Yeah. 132 00:05:38,800 --> 00:05:41,133 ... for $0 but he was making, apparently, 133 00:05:41,200 --> 00:05:43,200 the deal was you make me lunch, 134 00:05:43,266 --> 00:05:44,900 - you make two other people lunch. - [Michael] Yeah, we just--yup. 135 00:05:44,967 --> 00:05:46,667 And then, you discount everybody's lunches. 136 00:05:46,734 --> 00:05:48,433 But the second year, 137 00:05:48,500 --> 00:05:51,400 it was $6,000 for the year... 138 00:05:51,467 --> 00:05:53,233 - [Michael] Nope. - ... $500 each month. So... 139 00:05:53,300 --> 00:05:55,933 If, uh, if the lease was renewed, it was that. 140 00:05:56,000 --> 00:05:57,800 And we did not enforce that portion of the lease. 141 00:05:57,867 --> 00:05:59,633 We did not ask her to pay that. 142 00:05:59,700 --> 00:06:02,767 Did you have to pay anything onto the lease for rent or... 143 00:06:02,834 --> 00:06:06,467 No, we decided at the end of the first year 144 00:06:06,533 --> 00:06:08,266 to remodel the restaurant. 145 00:06:08,333 --> 00:06:10,667 So, I talk to Michael 146 00:06:10,734 --> 00:06:13,233 and I offer him to, uh, 147 00:06:13,300 --> 00:06:17,300 purchase the vinyl floor, lighting, the fence. 148 00:06:17,367 --> 00:06:20,300 And because I invested over $12,000 149 00:06:20,367 --> 00:06:23,133 to basically invest in his property, 150 00:06:23,200 --> 00:06:25,200 he voided the fact that I would have to pay 151 00:06:25,266 --> 00:06:26,533 - $600 per month. - [Judge DiMango] Okay. 152 00:06:26,600 --> 00:06:29,166 So, you opened the restaurant, you have a two-year lease. 153 00:06:29,233 --> 00:06:32,400 The first year, you pay nothing because you're making lunch for everybody. 154 00:06:32,467 --> 00:06:34,867 The second year, you renovate. 155 00:06:34,933 --> 00:06:36,266 And in exchange for that, 156 00:06:36,332 --> 00:06:38,266 you agree to waive the $6,000 157 00:06:38,332 --> 00:06:41,200 or $500 a month that she was gonna pay for that lease. 158 00:06:41,266 --> 00:06:42,332 - [Karine] Correct. - [Judge DiMango] Now, 159 00:06:42,667 --> 00:06:44,900 who pays your salary? 160 00:06:44,967 --> 00:06:46,533 - Who pays my salary? - [Judge DiMango] Did you have a salary? 161 00:06:46,600 --> 00:06:47,800 - [Karine] I did... - [Judge DiMango] Did somebody pay 162 00:06:47,867 --> 00:06:48,867 - your salary? - [Karine] I did not. 163 00:06:48,933 --> 00:06:52,033 I only put myself on salary in 2022. 164 00:06:52,100 --> 00:06:56,332 Basically, Shadow Mountain Resort agree to do the payroll 165 00:06:56,400 --> 00:06:58,400 for Delish Bistro and Bar. 166 00:06:58,467 --> 00:07:00,533 And I put myself as an employee. 167 00:07:00,600 --> 00:07:02,900 You became a PEO. Would that be correct? 168 00:07:02,967 --> 00:07:04,500 - [Karine] Yes. - [Michael] One hundred percent not true. 169 00:07:04,567 --> 00:07:06,400 I am not licensed to be a PEO. 170 00:07:06,467 --> 00:07:08,834 - I'm not insured to be a PEO. - [Judge DiMango] You did say that 171 00:07:08,900 --> 00:07:12,467 but not--if I understand correctly... I'm gonna ask Mr. Carr, 172 00:07:12,533 --> 00:07:15,100 but you should be authorized to be a PEO, 173 00:07:15,367 --> 00:07:18,400 but not all PEOs are authorized to be PEOs... 174 00:07:18,467 --> 00:07:19,433 - [Craig] Correct. - ... would that be correct? 175 00:07:19,500 --> 00:07:22,300 Yeah. So, Shadow Mountain would pay the payroll 176 00:07:22,367 --> 00:07:25,533 and then request reimbursement of the payroll, 177 00:07:25,600 --> 00:07:27,300 the taxes, the workers' comp... 178 00:07:27,367 --> 00:07:29,133 - [Judge DiMango] From her? - ... any benefits from her 179 00:07:29,200 --> 00:07:30,633 - Assuming she's the employer? - [Craig] ... for those employees. 180 00:07:30,700 --> 00:07:32,867 - Assuming she's the employer. - [Judge DiMango] Of the people that he-- 181 00:07:32,933 --> 00:07:34,033 while this is going on? 182 00:07:34,100 --> 00:07:35,100 - [Craig] You got it. - [Judge DiMango] So, 183 00:07:35,166 --> 00:07:37,667 two things about her situation. 184 00:07:37,734 --> 00:07:39,467 One, there was a bar there, 185 00:07:39,800 --> 00:07:42,266 and she doesn't have a license to serve alcohol. 186 00:07:42,332 --> 00:07:44,933 Only the people that are employed 187 00:07:45,000 --> 00:07:49,066 by the company that have the liquor license can sell liquor. 188 00:07:49,133 --> 00:07:52,166 [Judge DiMango] So, you employ her for the purposes of the bar. 189 00:07:52,233 --> 00:07:54,967 Yes. Anybody that purchases liquor, sells liquor 190 00:07:55,033 --> 00:07:57,300 has to be employed by the company that has a liquor license. 191 00:07:57,367 --> 00:07:59,967 So, Mr. Carr, can you form an opinion 192 00:08:00,100 --> 00:08:02,700 as to whether or not Ms. Gornes is an employer 193 00:08:02,767 --> 00:08:05,433 or an employee of Shadow Mountain? 194 00:08:05,500 --> 00:08:07,166 I can only give an opinion 195 00:08:07,233 --> 00:08:10,033 on the employee retention credit that I prepared. 196 00:08:10,100 --> 00:08:11,533 [Judge DiMango] Well, give me your opinion on that. 197 00:08:11,600 --> 00:08:13,133 [Craig] Okay. 198 00:08:13,200 --> 00:08:16,133 Ms. Gornes has submitted the payroll to me to work up. 199 00:08:16,533 --> 00:08:19,133 She sent me the agreements of her lease agreement 200 00:08:19,200 --> 00:08:22,433 to have the restaurant, uh, within Shadow Mountain, 201 00:08:22,834 --> 00:08:25,967 which showed me, according to IRS fact-38 202 00:08:26,367 --> 00:08:28,900 that she is in fact the employer 203 00:08:28,967 --> 00:08:31,300 under a third party employer, uh, 204 00:08:31,367 --> 00:08:33,232 and rightfully due the ERC. 205 00:08:33,299 --> 00:08:35,799 So, I worked it up. Otherwise, I wouldn't have worked it up. 206 00:08:35,866 --> 00:08:38,667 So, technically, she could be his employee 207 00:08:38,734 --> 00:08:41,500 and the employer of the people that work in her restaurant. 208 00:08:41,567 --> 00:08:43,033 - Correct. - [Judge DiMango] And why do you say 209 00:08:43,100 --> 00:08:46,033 that she is an employee and not an employer? 210 00:08:46,100 --> 00:08:48,165 All of the people that worked at the restaurant 211 00:08:48,233 --> 00:08:49,633 were always our employees. 212 00:08:49,934 --> 00:08:52,567 They were before, they were during her, and I have a new lease... 213 00:08:52,633 --> 00:08:53,633 [Judge DiMango] And that's what I want... 214 00:08:53,700 --> 00:08:56,000 ... and they have a new people and they're also employees. 215 00:08:56,066 --> 00:08:59,033 And I wanna know from you, who hired the people to work in her restaurant? 216 00:08:59,100 --> 00:09:00,166 - [Michael] We did. - That's... 217 00:09:00,233 --> 00:09:03,300 To backtrack a little bit, the PPP money 100% is-- 218 00:09:03,367 --> 00:09:04,767 you were right--you were spot on. 219 00:09:04,834 --> 00:09:07,800 The PPP money came to us based on wages. 220 00:09:07,867 --> 00:09:11,600 It did not come based on, you have six employees, here's $60,000. 221 00:09:11,667 --> 00:09:13,600 We--uh, and I was the one that did it, 222 00:09:13,667 --> 00:09:16,166 had to submit all sorts of documentation 223 00:09:16,233 --> 00:09:17,734 about who worked for us, 224 00:09:17,800 --> 00:09:19,533 what their employees were, and what their wages were. 225 00:09:19,600 --> 00:09:22,834 That's how the money was determined. It is by the wages. 226 00:09:22,900 --> 00:09:24,567 Otherwise, why did they ask for it all? 227 00:09:24,633 --> 00:09:25,934 [Judge DiMango] Right. And that would make sense. 228 00:09:26,000 --> 00:09:28,400 [Michael] Yeah. We have always understood 229 00:09:28,467 --> 00:09:30,166 everyone that works at Shadow Mountain is employed by us 230 00:09:30,233 --> 00:09:31,567 because we write their checks. 231 00:09:31,633 --> 00:09:33,533 We also have the long term burden of them. 232 00:09:33,934 --> 00:09:36,100 She filed for unemployment. I still... 233 00:09:36,165 --> 00:09:37,800 You're still paying unemployment for her 234 00:09:37,867 --> 00:09:38,867 of the--for some of the people that worked... 235 00:09:38,934 --> 00:09:40,033 [Michael] Through how unemployment works, correct. 236 00:09:40,100 --> 00:09:42,233 [Judge DiMango] Since you said that I was spot on 237 00:09:42,300 --> 00:09:43,900 and I don't wanna be wrong anymore, 238 00:09:43,967 --> 00:09:46,834 I'm gonna pass it over to Judge Levy. 239 00:09:46,900 --> 00:09:48,165 [Judge Levy] All right. Thank you. 240 00:09:48,233 --> 00:09:51,133 So Mr. Carr, you're an ERC/PPP specialist? 241 00:09:51,200 --> 00:09:52,200 Yes. 242 00:09:52,266 --> 00:09:54,967 So, you're familiar with the claims, 243 00:09:55,033 --> 00:09:56,600 for instance, in the Wall Street Journal 244 00:09:56,667 --> 00:09:59,500 talking about the Employee Retention Tax Credit 245 00:09:59,567 --> 00:10:02,900 as being the biggest COVID scam in US history. 246 00:10:02,967 --> 00:10:05,066 It was supposed to cost $55 billion 247 00:10:05,133 --> 00:10:08,433 and it cost US taxpayers $230 billion 248 00:10:08,500 --> 00:10:10,033 with no end in sight. 249 00:10:10,100 --> 00:10:11,600 - Correct. - [Judge Levy] You're familiar with... 250 00:10:11,667 --> 00:10:13,500 - Yeah. - [Judge Levy] ... the "come on" scams, 251 00:10:13,567 --> 00:10:16,533 that you don't get ripped off as an employer 252 00:10:16,600 --> 00:10:20,700 by people who are pretending to be specialists 253 00:10:20,767 --> 00:10:24,467 to apply for these loans and take tax dollars 254 00:10:24,533 --> 00:10:25,934 when they're not really entitled to it. 255 00:10:26,233 --> 00:10:27,934 - That's correct. - [Judge Levy] When you prepared 256 00:10:28,000 --> 00:10:31,467 the ERC and PPP for the plaintiff, 257 00:10:31,533 --> 00:10:33,700 did you get paid by the hour or did you get paid 258 00:10:33,767 --> 00:10:36,133 based upon the percentage of money 259 00:10:36,200 --> 00:10:39,567 that you were able to get for her from the PPP or the ERC? 260 00:10:39,633 --> 00:10:41,667 I got paid a flat fee. 261 00:10:41,734 --> 00:10:43,200 - [Judge Levy] A flat fee? - Correct. 262 00:10:43,266 --> 00:10:46,400 Have you spoken with the plaintiff about discussions that she's had 263 00:10:46,467 --> 00:10:50,266 with other accountants and other specialists before you 264 00:10:50,333 --> 00:10:53,100 who told her the way that they get paid 265 00:10:53,165 --> 00:10:55,934 was by a percentage of the money 266 00:10:56,000 --> 00:10:58,567 that they received from the government 267 00:10:58,633 --> 00:11:00,867 and they took a percentage of that as their fee? 268 00:11:01,166 --> 00:11:02,600 - That's correct. - [Judge Levy] That's what she told you, 269 00:11:02,667 --> 00:11:04,400 - that she had information from them. - Yes. Yes. 270 00:11:04,467 --> 00:11:06,100 You had your own accountant. 271 00:11:06,166 --> 00:11:07,100 My CPA did it, yes. 272 00:11:07,166 --> 00:11:10,900 What my accountant submitted to the IRS... 273 00:11:10,967 --> 00:11:13,233 - [Judge Levy] Was approved? - ... was approved and it was correct. 274 00:11:13,300 --> 00:11:14,734 - There's no doubt about that. - [Judge Levy] Well, hold on. 275 00:11:14,800 --> 00:11:17,333 I totally believe that he filed it right. 276 00:11:17,400 --> 00:11:20,967 He files first and then he's supposed to reimburse Karine. 277 00:11:22,100 --> 00:11:24,667 [announcer] Coming up on Tribunal Justice. 278 00:11:24,734 --> 00:11:27,333 I believe she's owed 18,860 bucks 279 00:11:27,400 --> 00:11:29,667 according to IRS rules. 280 00:11:29,734 --> 00:11:31,000 The more they talk 281 00:11:31,066 --> 00:11:34,100 the more it seems like you were sort of standing in the shoes 282 00:11:34,165 --> 00:11:35,533 of a payroll servicer. 283 00:11:35,600 --> 00:11:37,100 [dramatic musical sting] 284 00:11:39,066 --> 00:11:40,333 [theme music plays] 285 00:11:40,400 --> 00:11:44,066 [announcer] Karine Gornes is suing Michael McFarlane's LLC 286 00:11:44,133 --> 00:11:47,734 for her share of the government's paycheck protection relief funds. 287 00:11:47,800 --> 00:11:50,734 Karine says Michael received PPP funds 288 00:11:50,800 --> 00:11:52,400 using her employees 289 00:11:52,467 --> 00:11:54,734 and only gave her a small portion. 290 00:11:54,800 --> 00:11:58,300 But Michael says the funds are only for employers 291 00:11:58,367 --> 00:12:02,233 and Karine was an employee under his business. 292 00:12:02,300 --> 00:12:03,433 [Judge Levy] From the beginning, 293 00:12:03,500 --> 00:12:05,900 you open up a restaurant during COVID 294 00:12:05,967 --> 00:12:08,200 and you're gonna have to hire employees. 295 00:12:08,266 --> 00:12:11,400 So, now, say that you have six employees, they're working, 296 00:12:11,467 --> 00:12:13,633 and each one of them is making a hundred dollars a day. 297 00:12:13,700 --> 00:12:17,400 But instead of $600 a day coming in through the cash register, 298 00:12:17,467 --> 00:12:20,467 you only bring in $300. 299 00:12:20,533 --> 00:12:21,734 How do they get paid? 300 00:12:21,800 --> 00:12:23,600 You haven't earned enough money to pay them. 301 00:12:23,667 --> 00:12:25,633 [Michael] She ran--it ran negative lots of months, 302 00:12:25,700 --> 00:12:27,200 so there'd be four, five months in a row 303 00:12:27,266 --> 00:12:30,266 where we were fronting all the money. 304 00:12:30,333 --> 00:12:32,367 [Judge Levy] And you and your accountants 305 00:12:32,433 --> 00:12:35,266 knew about the PPP when it came out and you applied. 306 00:12:35,333 --> 00:12:36,500 Yes, absolutely. 307 00:12:36,567 --> 00:12:38,400 [Judge Levy] So, when did you first tell him 308 00:12:38,467 --> 00:12:41,100 that, uh, you wanted a share of the ERC? 309 00:12:41,165 --> 00:12:45,400 In 2023, one of the client of the restaurant came 310 00:12:45,467 --> 00:12:48,834 and told me that I should apply for the ERC... 311 00:12:48,900 --> 00:12:50,266 [Judge Levy] Because it's free money. 312 00:12:50,333 --> 00:12:51,533 - [Karine] Yes. - It's free money. 313 00:12:51,600 --> 00:12:52,867 But you know what it's not? 314 00:12:52,934 --> 00:12:54,066 - Free money. - [Karine] Uh-hmm. 315 00:12:54,133 --> 00:12:58,200 We have a $33 trillion deficit in this country. 316 00:12:58,266 --> 00:13:01,767 Two-hundred and seventy billion of it is for this program 317 00:13:01,834 --> 00:13:04,800 that the two biggest offenders are California and New York. 318 00:13:04,867 --> 00:13:07,834 Fraud, rampant fraud. 319 00:13:07,900 --> 00:13:10,467 The ERC, what exactly is it? 320 00:13:10,533 --> 00:13:12,567 It's an earned credit, right? 321 00:13:13,100 --> 00:13:14,433 - Yes. - [Judge Levy] I want you to tell me 322 00:13:14,500 --> 00:13:15,500 if I got it right. 323 00:13:15,567 --> 00:13:18,100 So, if I went into a grocery store 324 00:13:18,166 --> 00:13:21,066 and I wanted to buy a three-pack of paper towels 325 00:13:21,133 --> 00:13:22,533 and it was $7 326 00:13:22,600 --> 00:13:25,600 and I had an ERC coupon for 10, 327 00:13:25,667 --> 00:13:28,934 I'd be able to go into the supermarket, take the paper towel. 328 00:13:29,000 --> 00:13:30,667 I could give the cashier 329 00:13:30,734 --> 00:13:33,533 for a $7 item a $10 coupon. 330 00:13:33,600 --> 00:13:36,533 I can walk out with the paper towels 331 00:13:36,600 --> 00:13:38,867 - and $3 in cash. - [Craig] Correct. 332 00:13:38,934 --> 00:13:40,100 [Judge Levy] That's pretty much what it is. 333 00:13:40,165 --> 00:13:41,934 - Yes. - [Judge Levy] So, businesses were able 334 00:13:42,333 --> 00:13:44,934 to get cash for employees. 335 00:13:45,000 --> 00:13:46,300 - Correct. - It is how it works, yes. 336 00:13:46,367 --> 00:13:47,400 [Judge Levy] And that's how it works. 337 00:13:47,467 --> 00:13:48,567 That's the fraud-- 338 00:13:48,633 --> 00:13:51,533 that's the fraud on the American public. 339 00:13:51,600 --> 00:13:53,633 And a guy comes into your restaurant and says, 340 00:13:53,700 --> 00:13:55,967 "Hey, we got free money here. You should really apply." 341 00:13:56,033 --> 00:13:57,767 - [Karine] No, if I'm not mistaken... - And so what you do 342 00:13:57,834 --> 00:14:00,767 is then you say to the defendant, "Let's apply." 343 00:14:00,834 --> 00:14:02,700 He says, "Whoa, whoa, we got this covered already." 344 00:14:03,100 --> 00:14:06,133 And then, what you want is your piece of the pie. 345 00:14:06,200 --> 00:14:08,867 For the employee of the restaurant, yes, absolutely. 346 00:14:08,934 --> 00:14:10,266 [Judge Levy] The employees of the restaurant 347 00:14:10,333 --> 00:14:14,233 that they have been paying when you have been short on your till. 348 00:14:14,300 --> 00:14:16,300 I was short for four, five months because, you know... 349 00:14:16,367 --> 00:14:17,767 I don't care when it-- I don't care how long it was. 350 00:14:17,834 --> 00:14:19,166 They were guaranteeing it. 351 00:14:19,233 --> 00:14:21,200 But for them is your backstop. 352 00:14:21,266 --> 00:14:22,600 No one would work for you. 353 00:14:22,667 --> 00:14:27,000 And you were just upset that someone else filed before you did. 354 00:14:27,066 --> 00:14:30,000 And by the way, did you end up giving her any money 355 00:14:30,066 --> 00:14:31,467 - for the ERC? -[Michael] We did. 356 00:14:31,533 --> 00:14:34,367 And I kind of regret doing that 357 00:14:34,433 --> 00:14:37,000 because I do not feel that I should have. 358 00:14:37,066 --> 00:14:40,967 My CPA, my attorney has advised me that you should go back and get that. 359 00:14:41,033 --> 00:14:43,767 I don't want to do that, so I just kinda wanted the relationship... 360 00:14:43,834 --> 00:14:45,133 [Judge Levy] And you're not gonna do that? 361 00:14:45,200 --> 00:14:47,200 - I am not going to do that. No. - [Judge Levy] Judge Acker. 362 00:14:47,266 --> 00:14:50,165 But doesn't the fact that you did it 363 00:14:50,233 --> 00:14:52,200 - at the outset... - Uh-hmm. 364 00:14:52,266 --> 00:14:54,900 ... give some credence to her suggestion 365 00:14:54,967 --> 00:14:58,600 that she was actually the owner of this business 366 00:14:58,667 --> 00:15:01,233 and the employer of these people? 367 00:15:01,734 --> 00:15:04,900 No. I mean, the entire time of this contract, 368 00:15:04,967 --> 00:15:06,266 the people were always our employees, 369 00:15:06,333 --> 00:15:08,233 they were always assumed to be our employees. 370 00:15:08,300 --> 00:15:09,834 We handled every part of it. 371 00:15:09,900 --> 00:15:12,400 I made a mistake. I should not have issued that credit to her. 372 00:15:12,467 --> 00:15:14,266 [Judge Acker] So, Ms. Gornes, 373 00:15:14,333 --> 00:15:17,567 if you recognize the fact that he was backstopping your payroll 374 00:15:17,633 --> 00:15:22,533 and he's also still fulfilling unemployment claims, 375 00:15:22,600 --> 00:15:26,066 so he's assuming all of the costs 376 00:15:26,133 --> 00:15:28,300 of being an employer. 377 00:15:28,367 --> 00:15:30,166 You explain to me in your words 378 00:15:30,233 --> 00:15:33,533 why you think you should be entitled to anything on those facts. 379 00:15:33,600 --> 00:15:37,333 Yes. I was billed for every taxes 380 00:15:37,900 --> 00:15:40,433 [speaking foreign language] 381 00:15:40,500 --> 00:15:43,367 Every taxes where I was billed for. 382 00:15:43,433 --> 00:15:44,967 - And the labor, right? - And the labor. 383 00:15:45,033 --> 00:15:47,600 - And you paid that, right? - I did pay everything. 384 00:15:47,667 --> 00:15:51,700 So, what you're saying is that you actually paid 385 00:15:51,767 --> 00:15:53,500 - those unemployment costs. - Absolutely. Yes. 386 00:15:53,567 --> 00:15:55,200 - [Judge Acker] Is that right? - No. Not... 387 00:15:55,266 --> 00:15:56,500 - [Judge Acker] I... - While she's there, 388 00:15:56,567 --> 00:15:59,767 but I could tell you that she-- like, when this contract ended, 389 00:15:59,834 --> 00:16:03,367 she was on unemployment as of a couple months ago. 390 00:16:03,433 --> 00:16:05,333 But that has nothing to do with right now. 391 00:16:05,400 --> 00:16:06,767 - But I'm paying... - Or this agreement. 392 00:16:06,834 --> 00:16:08,900 ... the additional cost for unemployment. 393 00:16:08,967 --> 00:16:10,900 And here's the tricky part about unemployment. 394 00:16:10,967 --> 00:16:12,600 Unemployment's paid at a certain rate. 395 00:16:12,667 --> 00:16:15,533 The more people you have that filed, the greater the rate you pay. 396 00:16:15,600 --> 00:16:17,600 - [Judge Acker] It goes up. - So, when all of her employees, 397 00:16:17,667 --> 00:16:20,300 which are currently doing it right now as of a month ago, 398 00:16:20,367 --> 00:16:22,667 she hasn't been at the resort for eight or nine months, 399 00:16:22,734 --> 00:16:24,900 my rate is now higher for all of my employees... 400 00:16:25,300 --> 00:16:26,633 [Judge Acker] So you're almost treating it 401 00:16:26,700 --> 00:16:29,800 as a retroactive employment relationship of these folks. 402 00:16:29,867 --> 00:16:33,266 But the unemployment might only be, like, $400 that he paid for her 403 00:16:33,333 --> 00:16:35,700 because it's only, like, maybe at the max, 404 00:16:35,767 --> 00:16:38,500 5.7% of the first 7,000, 405 00:16:38,567 --> 00:16:40,500 and after that, there's no more unemployment, 406 00:16:40,567 --> 00:16:42,834 versus the ERC she's being robbed of. 407 00:16:43,233 --> 00:16:44,500 He only paid a portion. 408 00:16:44,567 --> 00:16:48,300 You were paid what, 97 or so of the ERC? 409 00:16:48,367 --> 00:16:49,867 Correct. Yes. 410 00:16:49,934 --> 00:16:52,834 He deducted the invoice from the accountant 411 00:16:52,900 --> 00:16:56,266 and my portion was $9,700. 412 00:16:56,333 --> 00:16:59,734 I believe she's owed the difference-- 18,860 bucks. 413 00:16:59,800 --> 00:17:02,967 But that's assuming that she is the actual employer. 414 00:17:03,033 --> 00:17:05,433 She is, on agreement. She's lease-- 415 00:17:05,500 --> 00:17:08,800 she pays a lease for the employees, 416 00:17:08,867 --> 00:17:10,532 for the resort, 417 00:17:10,599 --> 00:17:12,767 for everything, and she pays that. 418 00:17:12,834 --> 00:17:13,867 - So she's due that... - [Michael] If I wanted those people 419 00:17:13,934 --> 00:17:16,500 - to be... - ... according to IRS rules. 420 00:17:16,567 --> 00:17:19,000 If I had intended those employees to be hers, 421 00:17:19,066 --> 00:17:21,867 I would have written in a lease that you're gonna lease the employees. 422 00:17:21,934 --> 00:17:24,333 We did. It's on the--on the addendum. 423 00:17:24,400 --> 00:17:28,367 It says the payroll for the employees of the bistro 424 00:17:28,433 --> 00:17:31,200 will be paid through Shadow Mountain Resort 425 00:17:31,266 --> 00:17:34,967 with the funds collected via the credit card sales 426 00:17:35,033 --> 00:17:37,967 run through Shopkeep and the tennis member charges. 427 00:17:38,033 --> 00:17:40,133 Yeah, I have to say, Mr. McFarlane, 428 00:17:40,200 --> 00:17:42,633 the more they talk, the more it seems like 429 00:17:42,700 --> 00:17:46,066 you were sort of standing in the shoes of a payroll servicer. 430 00:17:46,533 --> 00:17:48,667 I've never been a payroll servicer for anybody. 431 00:17:48,734 --> 00:17:51,000 It'd be like my landscape contract coming to me 432 00:17:51,066 --> 00:17:52,667 and saying the exact same thing. 433 00:17:52,734 --> 00:17:54,333 We are not a payroll provider. 434 00:17:54,400 --> 00:17:56,667 - But you're leasing your employee. - [Michael] And I also legally 435 00:17:56,734 --> 00:17:59,734 have to be the employer because I have the liquor license 436 00:17:59,800 --> 00:18:01,300 and I'm the one selling the liquor. 437 00:18:01,367 --> 00:18:04,200 So, are you functionally an employer 438 00:18:04,266 --> 00:18:07,900 working under the auspices of his legal authority 439 00:18:07,967 --> 00:18:09,867 to sell alcohol? 440 00:18:09,934 --> 00:18:13,033 We had to do it this way because of the liquor license, 441 00:18:13,100 --> 00:18:16,400 so that's what it say, we are going to do it this way for the liquor license. 442 00:18:16,467 --> 00:18:19,533 They are your employees. Don't worry about anything. 443 00:18:19,600 --> 00:18:22,266 We are going to do the payroll so that we are all protected. 444 00:18:22,333 --> 00:18:23,734 - That's exactly what he said. - [Judge Acker] I mean, technically, 445 00:18:23,800 --> 00:18:25,767 don't dig yourself in too much of a hole 446 00:18:25,834 --> 00:18:27,333 because of what you're suggesting is, 447 00:18:27,734 --> 00:18:30,233 I was representing to the authorities 448 00:18:30,300 --> 00:18:32,800 that I was working under his liquor license 449 00:18:32,867 --> 00:18:35,300 when actually though I was an independent business, 450 00:18:35,367 --> 00:18:37,000 and I had no business selling liquor. 451 00:18:37,066 --> 00:18:38,133 That would be trouble for me. 452 00:18:38,200 --> 00:18:42,033 I cannot--I have to be the employer of the people selling the liquor. 453 00:18:42,100 --> 00:18:44,734 I would be turned in as selling out my license. 454 00:18:44,800 --> 00:18:47,000 That license cost me $3,300 a year. 455 00:18:47,066 --> 00:18:52,033 But that doesn't mean he can't, like a contractor, have someone, 456 00:18:52,100 --> 00:18:53,533 although it's shady 457 00:18:53,600 --> 00:18:55,467 - at Shady Mountain, you know... - [Michael laughs] 458 00:18:55,533 --> 00:18:58,633 ... uh, have someone run that restaurant for him 459 00:18:58,700 --> 00:19:01,600 so that they could keep money, they could keep the houses in. 460 00:19:01,667 --> 00:19:02,900 - [Judge Acker] But then, that's under... - [Craig] You know, at higher capacity. 461 00:19:02,967 --> 00:19:04,100 ... the table and shady. 462 00:19:04,166 --> 00:19:05,367 - [Craig] Of course. Of course. - [Michael] Its illegal. 463 00:19:05,433 --> 00:19:06,433 [laughter] 464 00:19:06,500 --> 00:19:07,500 - Of course. But... - And I would lose... 465 00:19:07,567 --> 00:19:08,600 - ... all in the contract. - ... my liquor license... 466 00:19:08,667 --> 00:19:10,767 I wouldn't have come here if it wasn't in the agreement. 467 00:19:10,834 --> 00:19:12,900 - [Judge Acker] I got you. - Showing that it's leased employees 468 00:19:12,967 --> 00:19:15,834 so that that restaurant could, instead of being, 469 00:19:15,900 --> 00:19:18,734 you know, shut down during COVID, open, 470 00:19:18,800 --> 00:19:21,266 so the hotel rooms stay booked. 471 00:19:21,333 --> 00:19:23,500 I think you all did a really nice job 472 00:19:23,567 --> 00:19:26,400 kind of digging into something that's complicated, 473 00:19:26,467 --> 00:19:27,900 but also interesting. 474 00:19:27,967 --> 00:19:30,266 - Judge? - The success of her business, 475 00:19:30,333 --> 00:19:33,467 if she makes a profit, did you ever get any of that money? 476 00:19:34,367 --> 00:19:36,700 [announcer] Coming up on Tribunal Justice. 477 00:19:36,967 --> 00:19:37,967 [Michael] Anybody who came to us and said, 478 00:19:38,033 --> 00:19:39,967 "I cut my finger, my finger no longer works," 479 00:19:40,033 --> 00:19:41,467 it would hit my workers' comp today. 480 00:19:41,533 --> 00:19:43,934 [Craig] His comp will cover it because she already paid for it. 481 00:19:44,000 --> 00:19:45,000 And my rates go up. 482 00:19:45,066 --> 00:19:46,333 I was invoiced for it. 483 00:19:46,400 --> 00:19:47,934 [dramatic musical sting] 484 00:19:49,867 --> 00:19:51,133 [theme music plays] 485 00:19:51,200 --> 00:19:54,033 [announcer] Karine Gornes claims Michael McFarlane's company 486 00:19:54,100 --> 00:19:56,066 owes her coronavirus relief funds 487 00:19:56,467 --> 00:19:58,767 from the government's Paycheck Protection Program 488 00:19:58,834 --> 00:20:01,166 because she opened a bistro at his resort. 489 00:20:01,500 --> 00:20:05,533 But Michael claims only employers can receive PPP funds, 490 00:20:05,600 --> 00:20:08,700 and Karine was always an employee of the resort. 491 00:20:09,200 --> 00:20:11,934 The success of her business, if she makes a profit, 492 00:20:12,000 --> 00:20:13,567 did you ever get any of that money? 493 00:20:13,633 --> 00:20:15,000 - No, zero. Yeah. - [Judge DiMango] You get nothing 494 00:20:15,066 --> 00:20:16,066 - from her? - Yeah. 495 00:20:16,133 --> 00:20:17,834 [Judge DiMango] My other question is, if somebody had to get 496 00:20:17,900 --> 00:20:18,934 workman's compensation, 497 00:20:19,000 --> 00:20:20,166 who would be paying that? 498 00:20:20,233 --> 00:20:22,200 - [Michael] We would. - Then, you would be the employer 499 00:20:22,266 --> 00:20:24,100 - that they would be coming to because... - [Michael] Yes. 500 00:20:24,166 --> 00:20:26,233 And workers' compensation is a five-year loss front, 501 00:20:26,300 --> 00:20:30,834 so if anybody from her time as the manager there 502 00:20:30,900 --> 00:20:33,433 came to us and said, "I cut my finger, my finger no longer works," 503 00:20:33,500 --> 00:20:35,066 it would hit my workers' comp today. 504 00:20:35,133 --> 00:20:37,233 But she paid---but she paid for it already 505 00:20:37,300 --> 00:20:39,300 and workers' comp will cover it based on-- 506 00:20:39,367 --> 00:20:40,567 because she already paid for it. 507 00:20:40,633 --> 00:20:42,567 - [Michael] And my rates go up. - I was invoiced for it. 508 00:20:42,633 --> 00:20:43,800 - Yeah. - I paid it. 509 00:20:43,867 --> 00:20:44,867 [Judge DiMango] So--but--okay. 510 00:20:44,934 --> 00:20:48,100 So, the thing is, he pays, you reimburse him, 511 00:20:48,166 --> 00:20:49,800 but it goes on his record, 512 00:20:49,867 --> 00:20:50,934 - basically, that this is... - [Michael] Yes. And it... 513 00:20:51,000 --> 00:20:52,133 - [Judge DiMango] ... what's happening. - ... adversely affects 514 00:20:52,200 --> 00:20:53,967 all of my employees for five years. 515 00:20:54,033 --> 00:20:55,834 Thank you. We're gonna retire to deliberate. 516 00:20:55,900 --> 00:20:56,900 Thank you, all. 517 00:20:56,967 --> 00:20:58,066 [Michael] Thank you. I appreciate it. 518 00:20:58,133 --> 00:21:00,300 - [Craig] Thank you. - [Byrd] Court now stands in recess. 519 00:21:00,367 --> 00:21:01,700 This case will be recalled. 520 00:21:01,767 --> 00:21:03,333 Parties are excused. 521 00:21:03,400 --> 00:21:07,166 [dramatic musical sting] 522 00:21:07,233 --> 00:21:10,200 I'm inclined to find that she was an employee. 523 00:21:10,266 --> 00:21:11,934 Once he starts doing the PEO, 524 00:21:12,000 --> 00:21:15,100 my understanding of that was that they become the employer. 525 00:21:15,166 --> 00:21:18,166 The workman's compensation, he would be paying all of that. 526 00:21:18,233 --> 00:21:20,433 Even though she's reimbursing him, ultimately, 527 00:21:20,834 --> 00:21:23,800 he is the one having to make all the payment on the bills. 528 00:21:23,867 --> 00:21:25,066 He has the liquor license. 529 00:21:25,133 --> 00:21:29,066 She's working under his license, which he pays for, 530 00:21:29,133 --> 00:21:32,633 and for sundry other reasons that you both mentioned. 531 00:21:32,700 --> 00:21:36,200 [laughter] 532 00:21:36,266 --> 00:21:38,033 [Judge Levy] So, number one, 533 00:21:38,100 --> 00:21:40,400 what legal theory is she filing under? 534 00:21:41,333 --> 00:21:42,500 It's not a breach of contract. 535 00:21:42,567 --> 00:21:46,767 What legal theory is she here arguing about? 536 00:21:46,834 --> 00:21:49,266 You stole my money theory. That's it. 537 00:21:49,333 --> 00:21:50,533 - Right. She wanted it. - That's just it. 538 00:21:50,600 --> 00:21:53,633 If anything, the only thing I could think of was unjust enrichment, 539 00:21:53,700 --> 00:21:56,200 that he got money and he wasn't entitled to it, 540 00:21:56,266 --> 00:21:57,266 - and she should've gotten it. - Uh-hmm. 541 00:21:57,333 --> 00:21:58,900 But it doesn't only go to employees, 542 00:21:58,967 --> 00:22:02,367 it goes to a lot of other things that he was doing in and about the business. 543 00:22:02,433 --> 00:22:04,233 I get that. Well, the--exactly. 544 00:22:04,300 --> 00:22:06,900 The point is that he applied 545 00:22:06,967 --> 00:22:09,033 and the federal government looked at his documentation... 546 00:22:09,100 --> 00:22:10,734 - [Judge DiMango] And accepted it. - ... and accepted it. 547 00:22:10,800 --> 00:22:14,100 So, if it is an unjust enrichment claim, 548 00:22:14,166 --> 00:22:17,533 she fails, because he was entitled to that money. 549 00:22:17,600 --> 00:22:18,767 Not discounting the fact 550 00:22:18,834 --> 00:22:21,066 that the accountant who was here, Mr. Carr, 551 00:22:21,133 --> 00:22:23,900 he made a decent argument to say that she was entitled to it, 552 00:22:23,967 --> 00:22:26,367 but he never said that the defendant wasn't. 553 00:22:26,433 --> 00:22:30,333 That's where I think that she loses, so on all three of those grounds. 554 00:22:30,400 --> 00:22:32,867 [Judge Acker] I think that she has some points 555 00:22:32,934 --> 00:22:35,800 that weigh in favor of her being the actual employer. 556 00:22:35,867 --> 00:22:39,333 She was reimbursing him for some of the earlier expenses. 557 00:22:39,400 --> 00:22:42,333 If she was only an employee, 558 00:22:42,400 --> 00:22:44,066 why would she be paying 559 00:22:44,133 --> 00:22:45,667 any unemployment insurance? 560 00:22:45,734 --> 00:22:48,433 Why would she be paying any workers' comp at any time? 561 00:22:48,500 --> 00:22:50,934 However, what I come back to 562 00:22:51,000 --> 00:22:52,734 is where I ended during the examination, 563 00:22:52,800 --> 00:22:54,934 she can't because of the liquor license issues. 564 00:22:55,000 --> 00:22:56,600 Because if she becomes the employer, 565 00:22:56,667 --> 00:22:58,967 then the whole thing really does become shady 566 00:22:59,033 --> 00:23:01,300 and that would be untoward. 567 00:23:01,367 --> 00:23:03,333 So, for her to win, 568 00:23:03,400 --> 00:23:06,934 she has to acknowledge and verify that she was doing something 569 00:23:07,000 --> 00:23:09,667 that she wasn't supposed to be doing because she didn't have the license. 570 00:23:10,066 --> 00:23:12,667 So, I would have to join you in dismissing. 571 00:23:12,734 --> 00:23:14,333 Okay. Very good. 572 00:23:14,400 --> 00:23:17,667 [dramatic musical sting] 573 00:23:17,734 --> 00:23:19,033 [Byrd] Court is back in session. 574 00:23:19,100 --> 00:23:20,734 Parties are reminded, you're still under oath. 575 00:23:20,800 --> 00:23:22,900 Thank you. And I thank the three of you 576 00:23:22,967 --> 00:23:26,800 because you kinda simplified what was a very complicated issue. 577 00:23:26,867 --> 00:23:29,266 But ma'am, he kinda beat you to the punch. 578 00:23:29,333 --> 00:23:31,934 Nobody's saying that perhaps you might not have been able to get 579 00:23:32,000 --> 00:23:34,734 some federal funding, some PPP monies, 580 00:23:34,800 --> 00:23:37,500 but the defendant actually was able to file, 581 00:23:37,567 --> 00:23:40,200 the federal government did find that he properly filed, 582 00:23:40,266 --> 00:23:43,033 and that he was entitled to the monies that he was receiving. 583 00:23:43,100 --> 00:23:45,700 Uh, there was nothing in the record which would indicate 584 00:23:45,767 --> 00:23:48,367 that by his receiving that and not giving you anything 585 00:23:48,433 --> 00:23:49,734 he was unjustly enriched. 586 00:23:49,800 --> 00:23:52,834 It's pretty clear that you used his payroll service, 587 00:23:52,900 --> 00:23:57,133 uh, any workman's comp was under the auspices of his workman's comp, 588 00:23:57,200 --> 00:23:59,400 what he was paying, his money went up, 589 00:23:59,467 --> 00:24:01,200 the liquor license he was paying for, 590 00:24:01,600 --> 00:24:04,967 and so by no means did he take advantage of you in that way, 591 00:24:05,033 --> 00:24:07,200 nor was he unjustly enriched by his receipt. 592 00:24:07,266 --> 00:24:10,600 And so because of that, we are unanimous in believing 593 00:24:10,667 --> 00:24:13,633 that your case should be dismissed for your failure 594 00:24:13,700 --> 00:24:17,133 to meet your burden of proof by a preponderance of the evidence. 595 00:24:17,200 --> 00:24:18,734 And that is the verdict of the court. 596 00:24:18,800 --> 00:24:20,233 - It is dismissed. - [gavel bangs] 597 00:24:20,300 --> 00:24:21,300 - [Craig] Thank you. - [Michael] Thank you. 598 00:24:21,367 --> 00:24:22,367 [Byrd] This case has now concluded. 599 00:24:22,433 --> 00:24:24,467 Parties are excused. You may step out. 600 00:24:24,533 --> 00:24:27,300 [theme music plays] 601 00:24:27,367 --> 00:24:28,600 Very disappointed. 602 00:24:28,667 --> 00:24:31,133 I feel like I got taken advantage by Michael 603 00:24:31,200 --> 00:24:32,934 for three years and he won today. 604 00:24:33,000 --> 00:24:35,333 Pretty simple, the contract states that they were our employees, 605 00:24:35,400 --> 00:24:38,266 that they were always our employees, and we treated them as such. 606 00:24:38,333 --> 00:24:43,400 But overall, I think, um, Karine was--is still due that money. 607 00:24:43,467 --> 00:24:44,600 Um, kinda like the judge said, 608 00:24:44,667 --> 00:24:46,700 that there was money to be had and money to grab. 609 00:24:46,767 --> 00:24:49,066 No, there's nothing to fight about, so... 610 00:24:50,266 --> 00:24:51,533 it is what it is. 611 00:24:51,600 --> 00:24:53,166 [announcer] Have you been scammed? 612 00:24:53,233 --> 00:24:57,567 Let the majority rule in your favor on Tribunal Justice. 613 00:24:57,633 --> 00:25:00,100 Find us on social media. 614 00:25:00,166 --> 00:25:03,500 ["Ride of the Valkyries" plays]