Bank­rupt fed­eral con­trac­tor’s funds tied to Florida firm with same owner

The Washington Times Weekly - - National - By Jim McElhatton

Months be­fore one of the coun­try’s largest fed­eral se­cu­rity con­trac­tors went broke, leav­ing hun­dreds of of­fi­cers with worth­less pay­checks, com­pany of­fi­cials emp­tied bank ac­counts in a money trail that re­cently led to a Florida ven­ture run by the firm’s owner, court records say.

Of­fi­cers at USPro­tect, which held hun­dreds of mil­lions of dol­lars in con­tracts to guard mil­i­tary in­stal­la­tions and fed­eral court­houses since 2004, say they face law­suits from cred­i­tors be­cause the com­pany gave them worth­less checks be­fore it was forced into bank­ruptcy ear­lier this year.

Newly dis­closed bank­ruptcy fil­ings show that e-mails sent be­tween com­pany of­fi­cials in the year be­fore the col­lapse ar­ranged for hun­dreds of thou­sands of dol­lars to be sent as of­ten as ev­ery few weeks to com­pany owner Lisa Hudec.

“I need a check grossed up so the end re­sult is 250K for Lisa,” said one e-mail, re­fer­ring to Mrs. Hudec, who was in charge of the Sil­ver Spring, Md.-based com­pany un­til its March col­lapse. “I need a check for Lisa ASAP. Gross up 300K,” an­other says. “I need a check for Lisa that is grossed up for taxes that will pay­out 150K.”

The bank­ruptcy lit­i­ga­tion also has spawned law­suits to re­coup cor­po­rate funds spent for a Porsche and Cadil­lac Es­calade for ex­ec­u­tives, ac­cord­ing to court records.

Tele­phone mes­sages for Mrs. Hudec and her at­tor­neys were not re­turned. When The Wash­ing­ton Times first ques­tioned the com­pany about its op­er­a­tions in De­cem­ber, the at­tor­neys said, USPro­tect had not been charged with any wrong­do­ing.

They said the com­pany has “con­sis­tently pro­vided su­pe­rior se­cu­rity ser­vices to a broad ar­ray of fed­eral agen­cies, and the com­pany’s out­stand­ing per­for­mance has been re­peat­edly ac­knowl­edged by agency con­tract­ing of­fi­cers both for­mally and in­for­mally.” ‘Pay­check to pay­check’

Mean­while, the for­mer of­fi­cers mostly have found work with new gov­ern­ment con­trac­tors tak­ing over USPro­tect job sites, which in­clude fed­eral court­houses, So­cial Se­cu­rity Ad­min­is­tra­tion (SSA) build­ings and other fed­eral sites na­tion­wide. But they say they’re strug­gling to break even as they deal with weeks of miss­ing pay­checks, trou­ble ac­cess­ing re­tire­ment ac­counts and un­paid child sup­port that was sup­posed to have been dis­bursed by the com­pany from with­held funds.

“Most of the peo­ple work from pay­check to pay­check,” said Jim Turner, a for­mer USPro­tect guard at SSA build­ings in Mary­land.

James Cul­breth, a stew­ard for the United Union of Se­cu­rity Guards, said more than 1,000 of­fi­cers lost wages be­cause of the com­pany’s col­lapse. He said em­ploy­ees weren’t paid in March, were blocked from get­ting their re­tire­ment money and lost vacation and per­sonal leave.

What’s more, dozens of em­ploy­ees who cashed their checks at check-cash­ing stores or credit unions are be­ing threat­ened with civil and crim­i­nal pro­ceed­ings af­ter the pay­checks bounced, Mr. Cul­breth said. Florida fund­ing

The newly dis­closed in­ter­nal emails, which de­tail nu­mer­ous six­fig­ure pay­ments to Mrs. Hudec, were in court doc­u­ments in Mary­land filed by a trustee over­see­ing the USPro­tect’s es­tate. The trustee, Janet Nesse, also is seek­ing a court-ap­pointed re­ceiver to mon­i­tor the fi­nances of Tu-Co-Peat Inc., a Florida com­pany pur­port­edly con­trolled by Mrs. Hudec.

Ac­cord­ing to the doc­u­ments, Mrs. Hudec re­ceived $5.8 mil­lion in “ex­cess salary” and nearly $4.4 mil­lion in un­paid loans from USPro­tect. Ms. Nesse said in court fil­ings that some of the money may have gone to Tu-Co-Peat, a Florida land­scap­ing and soil sup­ply com­pany. In ad­di­tion, a Porsche and Cadil­lac pur­chased with more than $100,000 in USPro­tect funds were trans­ferred later to Tu-Co-Peat for less than $1,000 each, ac­cord­ing to bank­ruptcy fil­ings.

USPro­tect was forced into bank­ruptcy in March by Wa­chovia Bank and other cred­i­tors who cited mil­lions of dol­lars in un­paid debts owed by the se­cu­rity com­pany. Ms. Nesse said a bank­ruptcy judge’s re­cent rul­ing will soon give for­mer em­ploy­ees ac­cess to their re­tire­ment ac­counts, but she also warned of likely short­falls from missed con­tri­bu­tions by USPro­tect.

A per­son who an­swered the phone at Tu-Co-Peat in Florida this week said she would leave a mes­sage for Mrs. Hudec. At­tor­neys for Mrs. Hudec in the bank­ruptcy case did not re­turn phone mes­sages. Fam­ily af­fair

Mrs. Hudec’s hus­band, Richard, is set to re­turn to Mary­land next month to face sen­tenc­ing in a crim­i­nal tax case. In the same mat­ter, he also pleaded guilty to fail­ing to dis­close var­i­ous fraud judg­ments when bro­ker­ing mil­lions of dol­lars in gov­ern­ment con­tracts for USPro­tect.

He be­gan work­ing at the com­pany in 2001 while on pro­ba­tion af­ter plead­ing guilty to felony fraud charges in New Jer­sey. Later, his wife bought the com­pany, and he be­came chief op­er­at­ing of­fi­cer. At first, he worked un­der com­pany founder Michael Hol­i­day, a for­mer Mont­gomery County, Md. po­lice of­fi­cer who pleaded guilty to giv­ing bribes to a for­mer Gen­eral Ser­vices Ad­min­is­tra­tion (GSA) con­tract­ing of­fi­cial for se­cu­rity con­tracts.

A memo filed in fed­eral court in Mary­land by Hudec’s de­fense team re­cently sought a split sen­tence in­volv­ing in­car­cer­a­tion and home con­fine­ment. In a memo, the de­fense said he “has fully ac­cepted re­spon­si­bil­ity for his con­duct and has co­op­er­ated ex­ten­sively with the United States.” It also said he was a per­son with a “good heart” who “of­ten makes sac­ri­fices for oth­ers.”

The U.S. At­tor­ney’s Of­fice in Mary­land re­ferred to Hudec as a “ca­reer crim­i­nal,” not­ing in a re­cent court fil­ing that he has four felony fraud con­vic­tions dat­ing back to 1990 and that his record went un­de­tected for years while he helped run USPro­tect.

Al­though Hudec was not charged in the bribery scheme, an FBI af­fi­davit said Hudec may have been aware of the ac­tiv­i­ties, ac­cord­ing to prose­cu­tors. The af­fi­davit also in­cluded a 2002 e-mail in which Hol­i­day up­dated Hudec on the sta­tus of a GSA con­tract bro­kered by for­mer GSA of­fi­cial Dessie Ruth Nelson, who later ad­mit­ted tak­ing bribes from Hol­i­day.

Ac­cord­ing to the court doc­u­ments, Hudec re­sponded to Hol­i­day in an­other e-mail, writ­ing: “Sounds great! Be­fore you know it, we will be in all 50 states with thou­sands of guards. Then again, know­ing you, you will have ‘A Friend’ in each state. That will take some cash to ac­com­plish.”

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