Court: Sako owes 65 workers over $1M

The U.S. District Court yesterday declared Sako Corp. liable in the amount of over $1 million, in connection with a lawsuit brought to court by the Equal Employment Opportunity Commission on behalf of some 65 workers.

Chief judge Alex R. Munson entered a default judgment against Sako Corp., which ceased business operations on Saipan earlier this year.

The EEOC filed the case against Sako last Sept. 16, after some 65 non-Chinese workers complained that their employment contracts were not renewed on the basis of their national origin.

“They were replaced by Chinese workers, who, in some cases, had to be trained by some of the replaced parties to take over their jobs,” the EEOC said.

While some of the displaced workers already left Saipan, most of them remain on-island, according to the EEOC, which claimed that the workers suffered financial hardships and emotional damages.

“While EEOC would have preferred to seek the minimum amount of compensatory damages which in this case is $200,000 per charging party, the reality of the situation dictates otherwise. Sako has ceased operations,” the commission said.

“All EEOC can do is to see if a default judgment can be obtained as soon as possible and for EEOC to enforce the judgment by collecting whatever assets may have been left by Sako when it shut down,” it added.

The EEOC obtained a default judgment against Sako, which filed no answer or responsive pleading to the complaint. It said that the company’s former attorney, Michael Dotts, acknowledged receipt of the complaint last Oct. 1. The court declared Sako in default last Jan. 10.

Dotts’ law firm has also sued Sako at the CNMI Superior Court sometime last month to collect on unpaid legal services amounting to more than $17,618.40. The law firm alleged that Sako still has a remaining balance of more than $5,200 in connection with a $60,000-promissory note that the garment firm had issued as payment for legal services.

The Attorney General’s Office has lodged multiple criminal charges against Sako Corp. and two of its officers for allegedly evading the payment of taxes on several occasions, which totaled some $1.3 million.

Eighteen counts of willful failure to pay taxes were filed against the company, Hee Kun Kyun, and Hyung Ki Min, records at the Superior Court showed.

Assistant attorney general Kevin Lynch charged the company and the two officers, alleging that they deliberately failed to truthfully account for and pay taxes as required by the CNMI Tax Code.

Lynch said the company and the two officers committed the offenses on several taxable quarters beginning on July 31, 2002 until Jan. 30, 2005.