IRS Bills Former Continental Trucking Executives, Not Owners

by Mark Friedman  on Monday, Sep. 19, 2011 12:00 am  

The Internal Revenue Service has billed Ralph Bradbury, right, former president of Continental Express Inc., and the late Pete Campbell, former executive vice president, shown an a file photo from 2006.

On top of that, the economy was starting to sputter. Starting in June 2007, Continental was losing $200,000 to $300,000 a month, Bradbury said in the Dec. 8 letter.

“The Owners well knew of this predicament but never moved to sell any of their assets nor did they attempt to move sufficient monies into the Company to ‘keep it afloat’ as promised,” Bradbury wrote. “I had no control over the capitalization of the Company.”

 

IRS Visit

Bills for Continental were pilling up in the summer of 2008. During that summer, the Harveys hired Marvin Jones to examine Ed Harvey’s business holdings, according to a deposition Jones gave in April 2010 in connection with a collection lawsuit filed by First Security Bank of Searcy. In addition to Continental Express, Harvey owned Gibraltar National Insurance Co. of Little Rock, Travis Lumber Co. of Mena, Eaves Manufacturing of Beebe and Preston National Bank of Dallas. (See also Auction of Continental Express Property Yields More Than $600,000, Texas Bank Produces Steady Income for Harveys.)

“Virtually everything that [Ed Harvey] was involved in collapsed,” Jones said in the deposition.

Bradbury said that, starting in September 2008, “Jones assumed increasing authority and control over the management and operations of the Company.”

After Ed Harvey was diagnosed with Alzheimer’s, Bonnie Harvey “began with the assistance of Marvin Jones, ‘calling the shots,’” Bradbury wrote.

The IRS also became concerned about Continental. An IRS officer came to the trucking company’s office on Oct. 2, 2008. According to an email that Jim Dodd, Continental’s chief financial officer, wrote two months later, the IRS agent instructed him to make the fourth-quarter deposits on time and warned that the $1.2 million owed for the third quarter of 2008 needed to be paid by Nov. 5 — a deadline that had passed by the time of Dodd’s email.

But by then, Bradbury claims, Jones had check-signing authority.

“By early November 2008, Mr. Jones had assumed all of the operational and administrative duties of the Company,” Bradbury told the IRS. “He advised that he had made contact with the IRS and was handling all payments and/or directing wire transfers.”

Warnings

 

 

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