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Oakland Woman Sentenced For Not Paying Taxes, Passing Bad Checks
August 22, 2007
Maine Attorney General Steve Rowe today announced the conviction and sentencing of Kathleen Thompson of Oakland, Maine for failure to pay over collected fuel tax to the State of Maine, and for negotiating worthless instruments. Thompson operated the now defunct business Petroleum Products Cooperative of Maine, Inc., also known as PPCOM, Inc.
In June, Thompson plead guilty to three felony counts of negotiating worthless checks and three misdemeanor counts of failing to pay collected fuel taxes to the Maine State Tax Assessor. She was sentenced Monday, August 20, 2007 to three years in jail, with all but seven months suspended, to be followed by three years of probation. She was sentenced by Justice Nancy Mills in Kennebec County Superior Court. Thompson was also ordered to pay $268,000 of restitution to the State of Maine and ordered to perform 600 hours of community service work during her period of probation. Thompson will serve her 7 months of incarceration at the Kennebec County Jail, beginning August 24, 2007.
Maine Revenue Services Acting Executive Director Jerome Gerard commented, "This conviction and sentence are a fitting punishment for her failure to pay taxes and for passing checks she knew to be bad."
Thompson was the President, Treasurer and majority stockholder of PPCOM, Inc., an oil distribution company that provided gasoline, diesel fuel and heating oil to retailers and large institutional customers such as municipalities and school districts. Pursuant to audits conducted in 2005 and 2006, Maine Revenue Services discovered that PPCOM had failed to pay nearly $3 million in fuel taxes to the State that it had collected from its customers during a four year period running from 2001 to 2005. A subsequent criminal investigation revealed that in order to try to keep the company afloat, Thompson had also written a number of large, but worthless checks from an account that had no money, knowing that the checks would not be honored. Assistant Attorney General William Baghdoyan, the prosecutor in the case, characterized these checks as a type of "check-kiting" scheme to make PPCOM's bank account appear to have sufficient funds to pay its bills.
"Ms. Thompson took deliberate, criminal action to try and save her failing enterprise," stated Assistant Attorney General Bill Baghdoyan. "Her actions withheld millions of dollars from the State and left many consumers without the heating fuel they had purchased."
A few months after the large fuel tax liability was discovered, PPCOM declared bankruptcy and went out of business, leaving a number of customers who had entered into pre-paid fuel delivery contracts without needed fuel for vehicles and for heating.
Bill Baghdoyan, Assistant Attorney General, (207) 626-8512
Jerry Gerard, Acting Executive Director MRS, (207) 624-7854