Sheriff Donald F Eslinger
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Seminole County Police Athletic League Inc.

ADMITS to Committing Federal Income Tax Violations

and Workers Compensation Premium Fraud

The Seminole County Police Athletic League Incorporated (SCPAL) under the management of Seminole County Sheriff’s Department (SCSO) Sergeant Dwayne Johnson admitted to violation of Federal Income Tax laws and entered into a Voluntary Compliance Agreement with the Internal Revenue Service on May 10, 2012.(1)

We at SeminoleWatch.com first brought this story to light last year and have been trying without cooperation to obtain the details of this Compliance Agreement. (2) Before we go any further into the details of how these crimes were committed by this so called nonprofit corporation, we would like to share a personal view point in comparison as to how special treatment continues to be afforded to a “segment of our society”.

I, Jeffrey K. Frazier, take full responsibility for my actions which resulted in the criminal prosecution against me by the Internal Revenue Service for the crimes of Income Tax Evasion and Willful Failure to file Income Tax Returns in 1996

Because of my actions, the IRS spent an estimated $260,000.00 and six years to determine that I had failed to pay approximately $7,400.00 in income taxes. I was indicted by a Federal Grand Jury and after a three day trial I was found guilty of all charges. For my crimes, I received four months in jail, six months house arrest, three years Federal Probation and required to enter into an Installment Agreement for ten years. Needless to say my career as a Police Officer ended.

So as one might guess, my knowledge as well as feelings on this subject matter is very personal. I believe that we as Citizens, of the greatest country that has ever been created, have a responsibility to obey our laws even if we do not always agree with them. And should we wish to change our laws we have the ability to do so by contacting our representatives and through our legislative process change those laws.

As a former IRS employee and friend has shared with me, our Tax laws apply to each of us equally and it is our responsibility "to pay our fair share".

So now that we have laid the foundation of our story let us see how it is that a nonprofit corporation under the management of SCSO Sgt. Dwayne Johnson who holds a business degree and a Certified Public Accountant, Steve Rotroff, were able to submit fraudulent Income Tax Returns since 2002. The fraud in question concerned the misclassification of employees (Camp Monitors/ Camp Counselors) as Independent Contractors. Among these employees were children of SCSO Deputies.

In order to get some of these questions answered we must look into the report issued by Captain Vance T. Akins, Division of Insurance Fraud, Worker's Compensation Compliance, dated November 26, 2012. In this report it advised: (3)

"Mr. Rotroff advised that 1099’s for SCPAL had been previously issued prior to his firm’s involvement, so he continued the business practice in the manner that had been established."

So here we have a highly educated professional accountant whose excuse for breaking Federal Laws is because the guy before him was committing the same crime. We do not know what is sadder; that Mr. Rotroff would provide this excuse or that Capt. Akins would accept this lame answer. But then again let us not forget we are talking about a special "segment of our society”. And public servants extend a "professional courtesy" to each other.

Let us look at it in another way by means of an analogy. Fred down the street knows that his neighbor, Bill, is a thief and steals County property at night. So Fred decides that because Bill has gotten away with it for years, he (Fred) will also start stealing County property at night. As time goes by Fred gets caught by the local police. When questioned about the stealing Fred’s excuse is he simply did it because Bill had been doing it for years so he just continued the “business practice”. I am sure our readers can think of millions of similar examples, the problem is in the real world try to use this excuse and your butt will be sitting in jail.

Now back to Capt. Akins’ report:

"Mr. Rotroff stated in retrospect, as the CPA for SCPAL, he should have researched the issue, but failed to do so, because it was the Sheriff’s Office he didn’t questioned it."

Even Mr. Rotroff admits that this “segment of our society” is granted special considerations. Let us not forget that during the time frame of this tax fraud the SCPAL was operated out of SCSO facilities, using SCSO personnel, SCSO materials, and even SCSO vehicles or should we say Seminole County Tax Payers dollars. So that we understand everything, here we have a CPA using the excuse that because the Seminole County Sheriff’s Department is involved he (Rotroff) forgot everything he ever learned about the difference between an employee and an Independent contractor, really? And Capt. Akins’ accepts this as a legitimate answer.

But the report gets even better.

"Mr. Rotroff advised that he did not recall any conversations concerning workers’ compensation coverage for SCPAL as it was never brought up."

You have got to love the language used here. Notice "he did not recall". Mr. Rotroff does not say that a conversation did not take place; he just does not recall one. Not that this would be something that any CPA would ask a business owner/manager every year prior to tax time. For those who do not understand this very important phrase it is used in order not to be called a “liar”. You see if you lie to an investigator you can be prosecuted and go to jail, ask Casey Anthony or Shellie Zimmerman.

So then who created this "business practice"? Well if we are to believe another SCPAL Board Member we must examine the statement of yet another SCSO Deputy Sheriff, Deputy Stuart Walters. In Deputy Walters’s interview he stated:

"Mr. Walters advised that the very first 1099’s issued were at the direction of the Seminole County Sheriff’s Finance Department. Mr. Walters advised that the issuance of 1099’s for SCPAL was established long before Sgt. Johnson came on board".

Now here is a question. If the SCPAL is “independent of the Sheriff’s Office” as stated by Major Penny Flemming of the SCSO, then why would the SCSO be directing the SCPAL to issue 1099’s? Maybe Deputy Walters needs to get his story in line with that of Major Flemming. But let us not forget this “segment of society” plays by different rules.

So now let us look at yet another Board Member, SCSO Major Scott Ballou. In Major Ballou’s interview he advises:

"He currently holds the rank of Major and is a member of the SCPAL Board of Directors. Major Ballou advised that his involvement with SCPAL began in 2005. Major Ballou advised that SCPAL and Sgt. Johnson were in place prior to his assignment to SCPAL. Major Ballou advised that his role is to provide oversight to SCPAL."

Once again there seems to be some confusion amongst the ranks. How is the SCPAL “independent of the Sheriff’s Office” and yet Major Ballou is “assigned to SCPAL”? Board of Directors to nonprofit corporations are not “ASSIGNED” as Board Members, they are nominated then voted upon pursuant to corporation rules. It appears that Major Ballou’ and Major Flemming’ statements are in conflict.

Before we leave Major Ballou let us examine more closely any personal financial gain that Major Ballou might have received from the fact that his daughter was a Camp Monitor for SCPAL. We at SeminoleWatch.com are neither accountants nor lawyers but have some common sense and opinion. So follow our train of thought. You allow your daughter to work as a “Camp Monitor” for a nonprofit that you are a Board Member of and know that she is paid as an independent contractor and not an employee. The money that she receives as a minor child comes into your household. So explain to me how her income does not profit your household? And how is her income not a gain? Employment taxes are not deducted from your pay when you are issued a 1099.

And before we leave Major Ballou alone let us take a brief look into his stated “assigned role”. Now what does the phrase "provide oversight" mean to you? Well if Major Ballou’s role is to provide oversight does that not make him an "Overseer"? And as an Overseer is he:

“a superintendent or supervisor; a public officer whose duties involve general superintendence of routine affairs.” (See Black’s Law Dictionary rev. 4th Edition)

So what is Major Ballou’s definition of a supervisor? Would it not be an act of common sense that upon being assigned a new “role” would you not make sure everything was in order, especially if you were going to permit your child to get involved in it? And just for a moment what would have happened if your daughter was injured while performing her duties as a “Camp Monitor”? Who would pay the medical bills? And heaven forbid if a Camp Monitor was killed. Look what happened to a gas station/ store operator/owner whose workers compensation insurance lapsed. That’s right the owner goes to jail. His problem was that he was not of this “segment of society”. Enough of Major Ballou, his lack of oversight speaks for itself.

Now let us look at the Managing Director of SCPAL. SCSO Sgt. Dwayne Johnson, in Sgt. Johnson’s interview he advised:

"Sgt. Johnson advised that members of the Sheriff’s Office who are assigned to SCPAL are paid out of the Sheriff’s budget."

So which is it? Is the SCPAL “independent of the Sheriff’s Office” or is it in fact a function of the Seminole County Sheriff’s Office and as such an entity subject to Public Records laws? Are we to believe that Major Flemming is being truthful and at the same time Major Ballou as well as Sgt. Johnson?

According to Sgt. Johnson’s interview:

"Sgt. Johnson advised that SCPAL has a Board of Directors and that an independent audit concerning the finances of SCPAL is conducted each year. The audit is reviewed by the SCPAL Board and the Sheriff’s Financial Department."

Located within the report of Capt. Akins’ was an interview of Mr. Charles Marcussen of Lashley and Seland.

"Mr. Marcussen advised the firm of Lashley and Seland never conducted an audit for SCPAL."

In reviewing the interview of Major Penny Flemming she advised

"Major Flemming advised that she recommended in the beginning that SCPAL have annual independent audits conducted by an independent firm each year for the purpose of oversight. She advised that she has no input on how the audits are conducted as they have always been done by an independent firm. Major Flemming advised that she has reviewed the independent audits each year and has found no discrepancies."

So who conducted these "independent audits" if the accounting firm of Lashley and Seland did not?

Does the SCSO have a copy of any of these audits? Does SCPAL have a copy of any of these audits? Did Capt. Akins obtain a copy of any of these audits?

So let us return to the brains behind these crimes. Sgt. Johnson’s interview continues to provide excuses as to why the nonprofit under his management continued to violate both Federal Tax laws as well as Workers Compensation Premium Fraud.

"Sgt. Johnson advised that prior to him overseeing SCPAL, Sgt. John Zay, a former employee was in charge of SCPAL’s operations. Sgt. Johnson advised that Sgt. Zay issued 1099’s to the labor contracted by SCPAL during his tenure. When Sgt. Zay left the department, SCPAL hired a CPA by the name of Jack Earls. Jack Earls was a professional accountant whom SCPAL relied upon for audits and tax information. Jack Earls processed the taxes for SCPAL’ 2003, 2004 and the 2005 tax year. Sgt. Johnson advised that Jack Earls continued the business practices of issuing 1099’s as Sgt. Zay had done."

Notice how one criminal blames the previous criminal. First it was Sgt. John Zay, and then enters CPA Jack Earls. Then enter Sgt. Dwayne Johnson and CPA Steve Rotroff. And no one is to blame; after all they were only continuing the "business practice". Sound a lot like the excuse they were only following orders.

So how is it that the SCPAL turned themselves into the Internal Revenue Service?

As it happens, if you start doing things illegally sooner or later something is going to come into the light. The former wife of Sgt. Johnson was required to file her income taxes and as such she needed documents for her former personal accountant (Mr. Steve Rotroff) in order to file her tax return for 2011. Yes the same accountant that was representing SCPAL.

First contact was made to Mr. Rotroff on or about February 29, 2012 by Ms. Johnson. During this correspondence Ms. Johnson informed Mr. Rotroff that her son was 15 years of age when he worked the SCPAL Camp and that "he is not a subcontractor nor has his own business."

So what are we to believe that Mr. Rotroff and Sgt. Johnson were thinking once they realized that Ms. Johnson had discovered these illegal acts by SCPAL? To truly appreciate what Sgt. Johnson must have been thinking you have to understand that the Johnsons had just finished a very nasty divorce and were still litigating child custody.

Is it possible that once Mr. Rotroff had been informed by Ms. Johnson that she had already spoken to two IRS employees concerning the misclassification of employees that it would not be long before a formal complaint was made to the IRS? Is it possible that Mr. Rotroff knew that the IRS offered a Voluntary Compliance Agreement which had certain conditions? Is it possible that Mr. Rotroff knew that three of these conditions are as follows:

"There is not currently a dispute between the parties as to whether the workers are independent contractors or employees for Federal Employment Tax purposes".

"The Internal Revenue Service does not have an ongoing examination of the Taxpayer".

"Neither the Department of Labor nor any state agency has an ongoing examination of the Taxpayer with respect to the proper classification of the workers".

We at SeminoleWatch.com offer our opinion that these things were possible and that Mr. Rotroff did share his communications with Ms. Johnson to her former husband, Sgt. Dwayne Johnson.

As a result of the facts provided by Ms. Johnson and research conducted, complaints were filed with the Division of Insurance Fraud/Workers Compensation (T12-8076) as well as the Florida Department of Revenue (Control # 12-0389) concerning suspected violations of Florida State Statutes as a result of the misclassification of employees.

The findings of the investigation by Capt. Vance T. Akins are as follows:

"Based on information collected, and statements taken from witnesses and alleged subjects, the investigation revealed the Seminole County Police Athletic League (SCPAL), from its inception in 1993 until July 2012, misclassified employees as contract labor. The business practices of misclassification by SCPAL was established prior to 2007, and before Sgt. Johnson or Steve Rotroff’s tenures. During this time period, SCPAL believed they had no employees and were excluded from the requirements of workers’ compensation coverage. Right or wrong this was their belief. The origin of misclassification by SCPAL could not be established as it occurred more than 19 years ago."

"There was no evidence obtained that Sgt. Johnson ever owned a business that would have gave him proprietary knowledge that worker’s compensation coverage was required, which would have contradicted the advice of handling of the payroll manner by the CPA firms. There is no evidence that Sgt. Johnson knowingly or willfully violated the workers’ compensation laws of Florida. There is no evidence that Sgt. Johnson personally benefitted from the misclassification."

And here is how one government employee covers for crimes having been committed by another government employee.

Capt. Akins failed to mention that Sgt. Johnson had operated his own business for several years. The nature of Sgt. Johnson’s off-duty business was as an independent contractor classified as "Extra Duty Employment". Had Capt. Akins bothered to verify his statement he would have discovered SCSO General Order #31 (Revised February 16, 2004) identified as “Off Duty and Extra Duty Employment”. (4) Specifically section VI. WORKERS’ COMPENSATION:

B. Personnel performing off duty or extra duty employment will ensure that their off duty or extra duty employment will ensure that their off duty or extra duty employer provides worker’s compensation coverage, liability insurance, or the employee will assume individual responsibility as an independent contractor.

So are we to believe that Sgt. Johnson who has operated his own extra duty security business aka Off Duty Details for years as an independent contractor did not possess proprietary knowledge? Or are we to assume that Sgt. Johnson failed to file his own Income Tax returns and omitted the income that he derived from this extra duty from those tax returns? Or should we believe that Sgt. Johnson failed to submit the proper forms on his yearly tax returns in order to take advantage of the tax deductions afforded as independent contractor?

Since when is ignorance of the law an excuse for violation of law? Let us not forget that the people who managed and controlled SCPAL failed to pay income taxes as well as FICA and SSAN on an estimated $1,196,542.00 of income paid to their employees. Let us not forget that the people who managed SCPAL failed to obtain Workers Compensation Insurance on its employees.

Capt. Akins uses the words knowingly and willfully. Are we to believe that Sgt. Johnson who holds a business degree and operated his own security business aka Off- Duty Details, did not have any knowledge which he would use to determine the difference between an employee and independent contractor? Are we to believe that Sgt. Johnson, this highly educated man in business, did not have any resources to access in order to make the determination? And are we to believe that his overt acts of misclassification did not benefit Sgt. Johnson in any way? Are to believe that the income generated by both of Sgt. Johnsons’ children who worked as Camp Monitors/Camp Counselors, over several years is not a benefit to him? And are we to believe that Capt. Akins conducted an unbiased criminal investigation into this incident?

You believe whatever you want. But then do not let facts, documents, common sense or the truth in any way interfere in your belief.

Sheriff Donald F. Eslinger

As for what happened to SCPAL and its manager to say that they even received a slap on the wrist would be a great exaggeration. SCPAL received nothing from the division of workers compensation fraud. In fact, the report was forwarded to the Office Of Norman Wolfinger and on December 3, 2012, Assistant State Attorney James W. Carter issued his reply.(5)

Mr. Carter wrote:

"At the heart of every prosecution is what is commonly referred to as criminal intent. We whole heartily agree with your assessment that there is no evidence of criminal intent on the part of the organizations or the individuals. No one benefitted from the accounting oversight."

What can we say, phrases like "business practices" and now “accounting oversight” are thrown around as if they have any connection to the truth or reality. But then if the outcome has already been determined, words without any basis in fact are used to fill in the holes to support a predetermined outcome.

To date it is unknown if any action has taken place by the Florida Department of Revenue.

And as for the Internal Revenue Service, well SCPAL was required to pay $734.52 when they owed an estimated $91,535.47 not including fines, penalties and interest.

Sgt. Johnson is no longer associated with the SCPAL as far as we know. However, Sgt. Johnson was promoted to Lieutenant. No report was forwarded to the Florida Department of Law Enforcement nor was an Internal Investigation conducted by the Seminole County Sheriffs’ Department.

But is this story finished?

Tucked away on page three of the "Voluntary Closing Agreement on Final Determination Covering the Classification of Workers As Employees For Federal Employment Tax Purposes" is the following statement:

This agreement is final and conclusive except:

(1) "The matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of material fact;"

We at SeminoleWatch.com have submitted this story in order to show how our laws are not always applied equally. If you are a member of a certain segment of society, who is protected, investigations can be tailored, evidence overlooked and the integrity of witnesses questioned without proof, in order to derive at the desired outcome.

Common sense and equal prosecution have no place when it comes to this segment of society. Our laws no longer apply to them. So if you are a business owner here in Seminole County Florida, regardless if you are a one man dog and pony show or have hundreds of employees spending thousands of dollars paying employment taxes and workers compensation, it must really piss you off knowing that our public servants will not enforce the laws equally.

But do not ever try to use the "ignorance of the law" defense as authorized by Capt. Vance Akins unless you are a member of this special “segment of society“ also known as a public servant. You will find yourself being fined, your business shut down and maybe even in jail.

As for the Managing Director of the Seminole County Police Athletic League Incorporated, Seminole County Sheriff’s Lt. Dwayne Johnson and the licensed Certified Public Accountant Steve Rotroff, no one was held responsible for the crimes committed.

CLICK ON BELOW DOCUMENTS:

  1. Internal Revenue Service Closing Agreement dated 5/15/12
  2. SCPAL Teaching the Children of Seminole County Florida How to Become Criminals
  3. Investigative Report by Capt. Vance Akins dated November 26, 2012
  4. Seminole County Sheriff’s Office General Order # 31, revised Feb. 16, 2004
  5. Letter from ASA James W. Carter dated December 3, 2012


"All that is necessary for the triumph of evil is for good men to do nothing"
-Edmund Burke