-Caveat Lector-
Begin forwarded message:
From: [EMAIL PROTECTED]
Date: January 16, 2007 9:39:57 PM PST
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED]
Subject: CEO's Idea of Noblesse Oblige: When Short of Cash, Steal
It from Your Employees
11/09/2006
Who Stole My Identity? The CEO?
http://hr.blr.com/display.cfm/id/19376
Federal prosecutors are accusing the chief executive officer of a
computer systems company of stealing the identities of his
employees to obtain loans, lines of credit, and credit cards.
Michael J. Garcia, U.S. Attorney for the Southern District of New
York, says that Terrence D. Chalk, chief executive of Compulinx
Managed Services, and Damon T. Chalk submitted applications for
loans, lines of credit, and credit cards that contained several
misrepresentations of the ownership of Chalk entities, the identity
of the guarantors, and false financial information.
Some of the applications misrepresented that certain Chalk
employees and clients were guarantors for the loans and were owners
and officers of various Chalk entities, prosecutors allege.
Prosecutors say that the applications included personal
identification information, such as names, addresses and social
security numbers, of Chalk employees or clients, submitted without
their knowledge or permission.
If convicted, Terrence Chalk faces a maximum sentence of 165 years'
imprisonment and $5.5 million in fine. He has pleaded not guilty.
Damon Chalk, who worked for his uncle Terrence Chalk, faces a
maximum sentence of 35 years' imprisonment and $1.25 million in
fines if convicted
-------------------
UPDATE: A Tainted Picture of MSP Provider Compulinx Emerges
By Chris Gonsalves, VARBusiness
1:17 PM EST Thu. Nov. 02, 2006
http://www.varbusiness.com/sections/news/
breakingnews.jhtml;jsessionid=GSSOOI2TYWOFGQSNDLOSKH0CJUNN2JVN?
articleId=193501349&printableArticle=true
One day after the arraignment of its CEO on identity theft and
fraud charges, work at MSP firm Compulinx has come to a sudden
halt, and Terrence Chalk's claims of a robust business with an
international clientele and a growing bottom line are looking more
and more like smoke and mirrors.
Former business associates of Chalk say claims that Compulinx had
hundreds of customers with data hosted on a massive IT
infrastructure of 300 servers and 40 TB of storage in four data
centers is nothing more than urban legend.
"[Chalk] got very politically connected, and he made a lot of
promises that resulted in an image that he walked on water. But the
bottom line is, he had one cabinet in our facility, that was it,"
says Christopher Furey, CEO of Savvy Networks in Tarrytown, N.Y.
"The other three data centers don't exist."
Furey, who served with Chalk on a number of boards, including the
Westchester Information Technology Cluster, says his company was
forced to discontinue Compulinx collocation services on July 4,
2006, after a series of bounced checks. Furey says Compulinx tried
to remove its equipment when outstanding charges could no longer be
paid by check or credit card. The matter was ultimately settled for
cash, he says.
As for claims that Compulinx employed some 50 people, Furey, who
has hired some former workers from his White Plains, N.Y.,
competitor, calls that claim "patently ridiculous."
"There's about six people left working there [at Compulinx]," Furey
says.
While more questions than answers remain about the fate of what may
be just the remnants of Compulinx in the wake of the criminal
investigation, a picture is emerging of a company that has been in
financial trouble for months -- and of a CEO with creative ideas
about how to circumvent financing difficulties.
Federal law enforcement officials Tuesday raided the White Plains,
N.Y., home of Chalk, Compulinx's CEO, and arrested the well-known
Westchester County businessman with charges of stealing the
identities of his employees in order to secure fraudulent loans,
lines of credit and credit cards. Chalk, 44, was arraigned in
federal court Wednesday along with his nephew, Damon T. Chalk, 35,
on charges related to submitting some $1 million worth of credit
applications using the names and personal information -- names,
addresses and social-security numbers -- of Compulinx employees.
Since the arraignment, the Compulinx Web site has gone dark and
phones at the White Plains company have gone unanswered. Numerous
messages left on the Compulinx Services Center voicemail have not
been returned.
The U.S. Attorney's office in White Plains, which is handling the
case, has not determined what will happen to Chalk's business
assets and would not comment on whether the Chalks had compromised
customer data at the same time they are accused of misappropriating
employee information, according to Yusill Scribner, spokesperson
for the agency. Calls to the FBI field office that handled the
investigation were not immediately returned.
The Chalks' own attorney, Mayo Bartlett of White Plains, says he
hadn't spoken to his clients about the potential technology fallout
for Compulinx's clients, adding that he hopes the Compulinx
business could continue uninterrupted. Messages left on Terrence
Chalk's voicemail seeking comment on the future of the company were
not returned.
NEXT: Stories of Compulinx's "credit problems" emerge. While the
wait for answers for current Compulinx customers continues, a new
view of a troubled MSP company has begun to surface. A
representative for a major technology distributor who asked not to
be identified says it had stopped doing business with Compulinx
because of "credit problems."
On the popular Internet complaint site Rip-Off Report.com, a former
Compulinx employee posted a detailed message describing how she was
hired by the company, but never paid.
"On July 17, 2006, Compulinx hired me as a Business Solution
Analyst," wrote the poster, who called herself "Luz" from New York
City. "I was notified by the company's payroll secretary that the
company hired me on big financial problems status. I was
interviewed three times and not a word was said to me about the
company having financial problems. This means that the company took
part in an employee scam in which I never got paid."
Chalk, himself, responded to the complaint, saying, in part, that
the missing paycheck was the result of accounting issues, that a
Department of Labor investigation spawned by the matter was found
in Compulinx's favor, and that the ex-employee lied on her resume.
"We have been in business for over 16 years and were awarded the
[Westchester Business Council] 2006 Hall of Fame Award earlier this
year," Chalk wrote. "This is a lifetime achievement award and
doesn't go to 'scam artists' or companies with 'financial
problems.' I think this employee would have known that if she spent
more time striving to take the high road and further her career
instead of attempting to reverse 16-plus years of business and
community service."
If Chalk's vociferous defense rings a bit hollow in the wake of his
arrest, other parts of his business history indicate a man driven
to success in the technology industry, even if unorthodox methods
were required.
At a CMP XChange conference in St. Louis earlier this year, Chalk
sat on a panel to discuss financing solutions in the managed
services space. Chalk used the platform to urge VARs to "lean on
the credit worthiness of your customers" in the form of leasing to
solve any cash-flow problems in the managed services environment.
Crafting a financial solution to go with managed services is as
important as the technology, he added.
That attitude pervaded the organization at Compulinx. At the same
CMP XChange event, Gary Bennett, vice president of strategic
relationships at Compulinx, said financing the managed services
model was top of mind.
"The biggest issue for me is in the managed services arena, how we
can communicate to the HPs and Ingram Micros of the world financing
solutions down to the end users," he said. "They are providing a
lot of hardware, but as far as getting ways to purchase commodities
back to the end user, it's a problem."
Prior to founding Compulinx, which he shepherded from its inception
to a reported $10 million in annual revenue and 50 employees in 16
years, native Long Islander Terrence Chalk worked at defense
subcontractor Dayton T. Brown in Bohemia, N.Y., and taught PC
repair and networking part time at Long Island's SUNY Farmingdale,
according to published reports.
Dissatisfied with a middle manager's role and convinced he could
succeed as an entrepreneur, Chalk quit his $92,000 a year job and
launched the business that would become Compulinx in West Sayville,
N.Y. He amassed an impressive list of clients for a one-man, home-
based business. According to the Westchester County Business
Journal, which published several glowing profiles of Chalk, the
fledgling company signed on Pfizer, Tropicana, Newsday and Scudder
for special IT projects.
The WCBJ reported last year that Compulinx was expecting
exponential growth after Chalk claimed to have inked a deal with a
"large, multibillion-dollar global financial services company
[with] almost 40,000 users."
The five- to seven-year contract had Chalk making plans to add
10,000 square feet to the company's White Plains headquarters and
100 more workers, according to the report.
In addition to the identity theft charges, Chalk is also charged
with racking up more than $100,000 in unauthorized credit-card
charges. If convicted, he faces 165 years in prison and $5.5
million in fines, prosecutors say. His nephew faces a maximum
sentence of 35 years imprisonment and $1.25 million in fines.
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