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Thursday, April 24, 2014

Accountant testifies about Quichochos’ alleged looting
‘Looting’ resulted in Kim’s losses amounting to $2.3M

An accountant testifying for businesswoman Jung Ka Kim described yesterday as “looting” what attorney Ramon K. Quichocho and his wife, Frances, did to the companies owned by Kim, resulting in $2.3 million in losses.

Certified public accountant Bruce M. MacMillan, who is also an accredited investment fiduciary, took the witness stand yesterday in the ongoing jury trial in federal court of the Quichocho couple, Quichocho’s law firm, and the couple’s Karissa LLC company.

Kim retained MacMillan as an expert witness to investigate Quichocho’s actions in relation to the legal services he provided to Kim in her poker machine businesses, Tan Dingo LLC and Latte Stone LLC.

According to MacMillan’s report, Tan Dingo LLC sustained $667,042 in losses; Latte Stone LLC, $1,551,828; and Soi-In Corp.-Rent & Property, $45,227. This brings the total loss of the three companies to $2,264,097.

MacMillan said that due to Quichocho’s failure to allow Kim full ownership of Tan Dingo, 16 poker machines have been stored in a warehouse, resulting in $318,380 loss of income, $318,662 in loss of business value, and $30,000 in loss of property value, for a total loss of $667,042.

As for Latte Stone LLC, which owns 20 poker machines, MacMillan said that Quichocho took complete control of the company. This caused Kim loss of property value in the amount of $68,675, loss of $854,092 in income, and loss of $629,061 in business value, for a total loss of $1,551,828, he said

Additionally, MacMillan said, Kim’s Soi In Corp. suffered $45,227 in losses due to the Quichochos’ alleged unpaid rent of various apartment units and loss of the furniture and equipment that were in the premises.

Responding to a question by Kim’s counsel, Colin M. Thompson, why he described the Quichochos’ acts as looting, MacMillan said that when the Quichochos took control of the two poker companies, there were excessive amounts of withdrawals. MacMillan said that looting seems to be the primary motive as poker machine license renewals were done to a lesser degree.

He noted that paying the salary of Quichochos’ live-in housemaid out of Kim’s company constitutes fraud because it’s essentially evading taxes.

MacMillan said the failure to renew the license of four poker machines means that the four machines operated illegally for a period of time. He said he determined that the machines were operating illegally by just reading the meters.

MacMillan said that when Kim was in control of Latte Stone, the company was making consistent profit for several years. The Quichochos subsequently drained the company by withdrawing excessive amounts of resources ($250,953), he said in his report.

“By having nothing invested or at risk, it was easy and beneficial for them to loot the company for as long as they could. Trying to maintain the operation as a ‘going concern’ does not appear to have been their objective,” he stated.

When Saipan Tribune left the courtroom yesterday late afternoon, attorney Michael Dotts, counsel for the Quichochos, was readying to question MacMillan.

Kim completed her testimony yesterday.

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