Monthly Archives: August 2013

To Be Or Not To Be (in existence)

Thanks to everyone who helped to spread the word and bring our page count to 10,000! We appreciate all of the support, information and encouragement we have received. Due to a recent question asked on the site regarding a company’s ability to continue to transact business despite not legally existing, we thought that it would be this week’s topic of discussion.

So here is the situation: the company, Proceaux Properties, LLC was formed in 2004 by Gail R. Proctor and Marlena C. Jareaux. The company was formed in order to essentially process the rent payments of the tenants of the houses owned by the two homeowners, and pay for their associated expenses for those houses out of the same bank account. It was thought that business might get to the point where the company could actually purchase properties in its own name one day, but that day never came because the partnership was dysfunctional and non-working. Here are the original incorporation papers for that company:

 

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With those papers and an employer identification number from the IRS, a business checking account was opened in 2004 at Suntrust Bank. A company’s legal right to do business in the State of Maryland is contingent on it complying with rules. In Maryland, a company has to keep a resident agent registered with the State, and it has to file the appropriate personal property tax form each year. If those things are not maintained, the State will change the corporate entity’s status to “not in good standing”. If the personal property tax form is not timely filed, the State will institute a department forfeiture against the company. The entity is then “forfeited” and is no longer a legal entity in the State.

A few things were done regarding Proceaux Properties, LLC. First, Ms. Proctor resigned as the resident agent in June of 2011. This was done in the same month that she stopped using the rent monies to pay any of the mortgage obligations for the rental properties in Baltimore city. Once an LLC loses its legal right to do business in Maryland, it also loses its right to uphold a lawsuit. So in the case of Proceaux Properties, LLC, she instituted a new resident agent. Both of those forms are here:

 

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Download (PDF, 81KB)

You can see and download all of the above forms by going to this website  http://sdatcert3.resiusa.org/ucc-charter/CharterSearch_f.aspx and simply put in the name of the company. You actually can do this for ANY business in Maryland.

All was apparently well, until it was time for the 2012 personal property tax required filing. What you won’t see here on this site, because we can’t put it up, is that the FINAL Federal tax return was filed for the company in mid 2012 for the tax year 2011 by Ms. Proctor!! That would mean that there is no return for 2012 and will be none for 2013. Mortgages weren’t being paid, foreclosures had been filed for a few of them by the lenders, yet tenant rent payments were still being deposited monthly into the company Suntrust Bank account controlled solely by Ms. Proctor. If you go to the website above, search the company “proceaux properties” and click on “personal property”, you will see that no personal property return was done for 2012 or 2013 as is required.

Once it was actually learned that a FINAL Federal return was done for Proceaux Properties, LLC, it was verified by Marlena with the IRS, and the EIN for the company was closed. No EIN, no legal entity. So how is it that Ms. Proctor continues to collect tenant rent payments each month even now in August of 2013?

§ 4A-919. Penalties for transacting business.
 

(a)  Misdemeanor; fine.- Any person that transacts business in the name or for the account of a limited liability company knowing that its right to do business in Maryland has been forfeited and has not been reinstated is guilty of a misdemeanor and on conviction is subject to a fine of not more than $500. 

(b)  Prosecution.- A prosecution for violation of the provisions of this section may not be instituted after the date articles of reinstatement of the limited liability company are filed. 

 

It will come as no surprise to any visitor to this site that our fish is (still) breaking the law. There is ONE signer on that Suntrust checking account for Proceaux Properties, LLC- Gail Renai Proctor. Income is not being reported to the Internal Revenue Service (sounds like more tax evasion), and business is being done by her each month in the State of Maryland despite the company having no legal standing to be in any contract bearing its name. Note to the tenants: you are paying an entity that doesn’t exist and if anything goes wrong, you have no entity to pursue in a court action (that may have been the plan). Note to Suntrust Bank: is what you’re doing somewhat equivalent to allowing money-laundering? Seems so to us. Note to MD and US tax authorities: don’t you wonder if there’s any (more) money that you may be missing? Maryland, you are missing $600 and in a few months, it will be $900. Let us guess: you don’t have a way of checking to see if an LLC continues to operate despite its forfeiture, and you’re relying on the honesty of its owners? Hmmm. Who knew it was so easy to operate a business in MD under the radar and avoid paying State fees?

 

IS Maryland Missing More Money?

All homeowners in Maryland are assessed a tax on their property every year. The SDAT website has this to say about the property tax:

“Counties and cities depend on the property tax and a portion of the income tax to make up their budgets. The property tax makes up about 30% of the average county budget and over 35% of the average city budget. State government is primarily funded by the income tax and the sales tax.” You can read more by going HERE

Depending on where you live, your tax amount is calculated by taking the assessment of your home’s value and applying the tax rate to it in accordance with where the property is located. For every $100,000 that a property is valued, the taxes on it could be about $1000. So for a property valued at $300,000, it could be around $3000 per year. The actual property tax bill would give the exact numbers.

Someone asked the question on this website about Ms. Proctor’s annual property tax bill which was reading at Zero. We have to thank you for bringing this to our attention, because we too now have questions about it. How fortunate for her to not be assessed thousands of dollars each year on her house in Baltimore city. Geez, years without paying Maryland income taxes and then years of not having to pay the annual property tax bill! How much financial prosperity can one person have?

Well, it turns out that Ms. Proctor has somehow qualified for a complete exemption of her full annual property tax due to her alleged status of 100% disability. In Maryland, a veteran can get a break on their property tax bill, but not for a partial amount. Here’s what we mean: if you have a 50% disability, you won’t qualify because the State doesn’t give 50% breaks (unfortunately, we think). So for all of you veterans who have served our country and have a 25%, 50% or even a 75% service-related disability, Maryland won’t give you any tax break. Here is the actual form that the veteran has to complete:

 

Download (PDF, 137KB)

How do we know that Ms. Proctor got this 100% rating? Look no further than the courthouse mentioned extensively on this website, where you will find the document that she completed, and then search the net for confirmation. To make things easier, we’ve put them here for you. First, her completed form that she evidently submitted to the Supervisor of Assessments office:

 

Download (PDF, 177KB)

It does have a signature from Veteran’s Affairs, but through an investigation, we have learned that the Baltimore Veteran’s Affairs office used rubber stamps for the signature of “Cheryl Flohr” that you see on the form. Hmm, surely one doesn’t just need a rubber stamped signature to get a full exemption from the personal property tax do you? Well no, the form does actually state that the veteran needs to submit a copy of their DD-214 along with the form. Okay, now we’re getting somewhere. Fortunately for us, we have Gail Renai Proctor’s DD-214 that was provided courtesy of a FOIA request. And here it is:

Download (PDF, 733KB)

Wait! Do you see what we see? At the bottom, in box #23? It indicates that the separation was a result of “retirement”. So, no mention in any way, shape or form of a medical discharge? No mention of anything medical except for the dental information contained in the #18 block. Surely you can’t be diagnosed as 100% disabled (and PTSD at that) as a result of some dental issue, can you?

So WHO exactly is it that would have written “post traumatic stress disorder” on that Maryland exemption form, and WHERE did they get their information?

Before you say “maybe the form wasn’t approved”, we will offer this: a link was found on the internet that takes you to the minutes for the Board of Estimates hearing that was done years ago when Proctor first requested this exemption. HERE is the link, and on page 28 you will find that “..she meets the status of a disabled individual..” according to what she provided to them. Below is the actual page.

Download (PDF, 43KB)

There must be a DD-214 that reads “medical discharge” somewhere out in the universe, though we don’t know where it would have come from. We couldn’t help but notice that box #30 of the DD-214 contained a request for a “copy” of the very form that would have needed to be submitted both to the veteran’s STATE VA office, as well as to the Maryland Assessor’s office. We assume that the tax exemption form was checked by someone at the State for accuracy, but who knows. And we assume that the Maryland VA office would have checked to ensure that the DD-214 copy that they received was the same as the one contained in the vet’s personnel records. But as usual, one and one does not equal two when we are looking at things related to the statements and finances of this fish, “under penalty of perjury”.

Note to the State of Maryland: you might want to go directly to a National Veteran’s Affairs source in order to corroborate any allegation of service-related 100% PTSD made by someone who was a “flight attendant”. You should be able to rely on the honesty of people, but some just aren’t. And a note to the US Government: unless your paperwork is inaccurate, and (if it is) her 100% PTSD rating extended back to the 90s, does it somehow explain the creation of a fictitious husband that SHE believes is real? Maybe!!

What do YOU think?

More Fraud In Maryland

We all have other taxes to pay. Yes, there are Federal taxes to pay. And if you live in a State that has income tax, then you have those to pay as well. Usually there is also a component to your State tax that will also include a local tax, if you live in an area that has one. Those are the ones that most people know about. Today, we are going to discuss another set of taxes that exist in the State of Maryland.

One is the recordation tax that you pay when you purchase a house in Maryland. This tax is imposed along with a transfer tax, and is collected at the settlement table or by the attorney handling the transaction between a buyer and seller of real estate. The paperwork that relays all of the information related to the transfer is recorded in Land Records for the county where the property is located. The money ultimately benefits the specific county. It is therefore important that we all pay our fair share.

When a person is a first-time homeowner in Maryland, they are entitled to a significant tax break. The purpose is to encourage home purchasing and ownership, which is designed to boost the local economy by bringing tax revenue to the State and the local county. The money that is saved by designating yourself as a first-time homeowner is significant, and depends on the purchase price. For more information on the tax break, see this form:

Download (PDF, 41KB)

Though a person can and may certainly move from one house to another, you can only technically be a first-time homebuyer in Maryland ONE time. To be clear, it is certainly possible to buy a home in Maryland and then buy another house years later and opt to use the tax credit on the 2nd purchase. You just can’t do it if you already did it previously. Rather, you aren’t supposed to be able to do it. That would mean getting the credit TWICE, which was never the intention of the law that was made to provide the tax credit. Looking at the form, mention is made of a statement “under oath” that the buyer is supposed to sign stating that they meet all of the qualifications. Is it possible for someone to cheat this system?

Without oversight, it apparently CAN be done where a long-time Maryland resident purchases property and receives the tax credits TWICE. Purchase a property in 1993 as your principal residence in Prince George’s county as evidenced HERE (the reference to 13-203 on the first page refers to the credit)

 

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and then purchase a property in 2006 while attesting via affidavit that you have “…never owned in the State of Maryland residential real property that has been the undersigned’s principal residence.” Hmmm. Not entirely true, is it? Notice the “under penalty of perjury” reference? See for yourself on page 4 of the attachment below.

Attention State of Maryland: you are losing money by not having a system that checks to ensure that people are PROPERLY taking the tax credit. Is your computer software not catching it, or is there a person in each county that should be checking to verify accuracy (and honesty of purchaser) who isn’t doing it? How much money are you missing as a result? Yes, the purchaser should be a person of integrity, but when they are not, what then?