Scam company

nowayingere

Hi all,

I'm having a serious issue and I need your help to try to come up with the best possible plan to get these matters solved.

Around May 2013 I was on the market looking for a new job position and I was arranged and interview with a company named [XYZ - ModSnipped]. for a 6 months contract.

During the interview I could understand that they were going to have some issues, as they had no real IT experience and would be an easy target for very non-professional guys looking for easy money.

They end up hiring another person and when they came back to me in December 2013 I was already employed. They told how right I was, that that had problems with two other lads they had hired and were now seeking my help.

I told them that I wasn't available full-time but that I could manage to worked for a few hours during the week/weekends. Since I was already working and had a real interest on helping these old guys I scraped the daily rate we talked about initially (4000/day) and said that I could deliver the solution for around 7000 grand.

Unfortunately they kept changing their plans to the point that I needed help, and so I spoke with a friend of mine who was working full-time too. At this point, around March, I was working without having signed any contract. They had a copy of the contract they wanted me to sign, but I asked them to do some changes, because some of the things were just so absurd.

I always believe them, I took them as been honest people, and I never asked them for any money, until I spoke with my friend.

This guy worked with me for a few months, weekend after weekend and obviously, it came to the point where he asked my for some so money.

Meanwhile I had to speak to a second guy to help us out, and the plan was for us 3 work together.

The guys at [XYZ - ModSnipped] did not like the second guy, so I paid him the agreed amount, around 2,5K and at this time I also paid the first guy around 3K and all that money was from my pockets, I still had not received anything.

At this time [XYZ - ModSnipped] told me they needed a new full-time person, if I could help them finding a person.

I was working remotely in Portugal, so I proposed them to find a guy here, and they all agreed. I interviewed a few guy and eventually we reached to an agreement with one of the guys.

We started working with us around August, had was hired as a full-time with and signed a contract.

The way the [XYZ - ModSnipped] guys were treating us, was unbelievable, and it was impossible to keep any sanity given all the changes they were continuously requesting. At this point I had to ask the first guy, to work a few more weekends and promised him more money, which I had to pay in full after a few months later, the total amount comes to around 7000 eur, that I spent on my one.

There are many reasons for this, but the main was that [XYZ - ModSnipped] was OK with not paying taxes as to have a lower project cost, that's why I was paying those guys, and eventually [XYZ - ModSnipped] would pay me everything in the end.

Two months after the hired the guy permanently, he decided he had enough, and send them a resignation letter, which they accepted, but they never paid him his last month, stating that he had not deliver.

We can see the website we did online and it is unbelievable that a company proving services for Irish state bodies like the Irish Prisons and the National Museum, behave like this.

We spoke to a few solicitors but we want to hear from you whats the best thing we can do.

We did sign a NDA letter with them which they are using to prevent us from taking any actions, but at this point they are owing me around 20K and another 2K to the full-time guy.

We worked tireless and we they the best we could but we can't accept that we worked for around 9 months aren't paid, and in my case, I spent 7K of my own money.

Any help is more than welcome.

The_Conductor

I'm sorry I have zero sympathy for anyone scamming the taxpayers of this country. Report them. Ring the Revenue Commissioners and tell them. They can investigate the company- its not your job to do this.

nowayingere

Hi The_Conductor,

Thanks for your reply. Sure I can report these guys, but is there any chance of getting my money back since I haven't signed the contract? I spoke with a few solicitors, and some say I might be able to get some money while other say it will be complicated. I just don't want to start spending a lot of money with solicitors since I already spent 7K which I will probably not recover.


Regards,

Mrs OBumble

OP, I'm sorry for your problem - but really this is not a suitable issue for this forum because

1) You were doing it as a side business, not as an employee, and

2) The guy who was hired and an employee is based in Portugal, therefore Portugese employment and tax law (which we don't know about) applies, not Irish law.


I'm going to remove the company name, because really it's irrelevant to giving you advice about what to do in the situation. And then I'm going to transfer it to the Entrepreneurship and Business Management forum - there's a slight chance that someone there can give you advice about what options you might have as an overseas company providing services to an Irish company.

nowayingere

Hi Mrs OBumble,

He was hired was an Irish employee, although he was based in Portugal.

Regards

The_Conductor

Mrs O'Bumble- from the information in the first post- the employee is subject to Irish employment law- and not Portuguese........

nowayingere

The_Conductor wrote: »

Mrs O'Bumble- from the information in the first post- the employee is subject to Irish employment law- and not Portuguese........

Yes, that is the case. There was no portuguese company involved in the process whatsoever. He was working as an Irish employee and has a Irish PPS number. I was also working with them as an Irish contractor.

Mrs OBumble

The_Conductor wrote: »

Mrs O'Bumble- from the information in the first post- the employee is subject to Irish employment law- and not Portuguese........

Can you provide a link to show that an person who is tax-resident in another country, but hired to do some work for a company HQ in Ireland, is somehow subject to Irish law?

When it's the other way around (person living in Ireland wants to work for a company based in ABC who don't have an office in Ireland), the advice so far has always been that if the person is an employee, then ABC must operate under Irish law and the Irish tax system based on the residence of the employee.

AFAIK, Irish law can only apply to people living in Ireland.

The_Conductor

It depends on whether the person is a contractor or an employee.

In the case of an employee- if the employee of a company based in Ireland relocates to another EU memberstate- the employer notifies Revenue with an E101 form- and the employee is subject to Irish tax and deductions (including PRSI, USC etc) for a period of 2 years (after which time they revert to paying tax in their home country). The only exception to this rule- is France- where the 45% social deduction rate applies immediately- ontop of Irish deductions- however, it is subject to the reciprochal tax arrangements though (aka the French mandatory social deductions can be offset against Irish PRSI (but not Irish income tax)). Ryanair ran afoul of this with French staff on Irish contracts in August of last year.

With respect of contractors- as opposed to employees- who are based in another EU state- their employer is obliged to deduct witholding tax from the payments to the contractor- which the contractor can reclaim with their balancing statement.

There isn't a standard definition of tax residence by the way- it differs throughout the EU- Ireland and the UK have some of the more liberal interpretations- other EU countries are not as accommodating. It is not standard though..........

DAlmeida

Hi there,

I'm the other guy who was working as a full time employee.

I had a PPSN and a signed a contract, everything by the book as if I was living in Dublin (on a friend's house I was staying when I had to go to Ireland). I had to go to Ireland every month for at least a week during this period.
They were paying on a Irish bank (always late).

As @nowayingere told the situation come to a point that was unbearable and resigned proposing to continuing as a contractor, because I was unsure I could continue on those conditions.
Then sent me an e-mail and a letter to my friend's house accepting the resignation where they promised to pay next week and to send the p45 certificate.
The next days I returned the laptop as it was company property and then complety stop replying my calls and e-emails and never paid me or send me anything.

Geniass

If I understand this correctly neither of you are living in Ireland, but did work for an Irish company.

The first mistake was allowing the fees to build up to €20k, the second was paying the company's bills out of your own money. This was very naive and the owners of the company realised this and are hoping to scam you out of your money.

Okay, what can you do. First of all an Non Disclosure Agreement is highly unlikely to preclude you from divulging that they have not paid you.

It may even be the case that the NDA is invalidated by their not paying, depends on the wording of the NDA.

You could inform them that you will be contacting their clients to let them know they have not paid you, but this could be defamation if you cannot 100% back up what you state.

Do you have someone i.e an Irish friend to contact them on your behalf. Making it more local would help.

First of all if you've signed an NDA I wouldn't be mentioning their name anywhere unless you want to get sued. Business and the law can be unfair like that, even if your not in the wrong.

You should accept also that you've been very naive and take this as a lesson in business, an expensive one because you didn't take the correct steps to protect yourself.
The next time you take on a project you won't make those same mistakes. Everyone get stung at some point and you just gotta learn from it.

As to the remedy, too many variables to give clear guidance. If you have all your emails saved, with offers and acceptance etc this might help with a case, but really you need to talk to a lawyer to see what your options are.

Buttercake

I'd love to know what job pays €4000 a day

Mrs OBumble

The_Conductor wrote: »

It depends on whether the person is a contractor or an employee.

In the case of an employee- if the employee of a company based in Ireland relocates to another EU memberstate- the employer notifies Revenue with an E101 form- and the employee is subject to Irish tax and deductions (including PRSI, USC etc) for a period of 2 years (after which time they revert to paying tax in their home country). The only exception to this rule- is France- where the 45% social deduction rate applies immediately- ontop of Irish deductions- however, it is subject to the reciprochal tax arrangements though (aka the French mandatory social deductions can be offset against Irish PRSI (but not Irish income tax)). Ryanair ran afoul of this with French staff on Irish contracts in August of last year.

With respect of contractors- as opposed to employees- who are based in another EU state- their employer is obliged to deduct witholding tax from the payments to the contractor- which the contractor can reclaim with their balancing statement.

There isn't a standard definition of tax residence by the way- it differs throughout the EU- Ireland and the UK have some of the more liberal interpretations- other EU countries are not as accommodating. It is not standard though..........

Yeah, that's the tax side. Not employment law.

But the op's friend had a problem with non payment of wages. I reckon that if he rang Workplace Services, they would be very unlikely to assist.

Similarly for the op, enforcement of an implied contract made from oversea. Sticky at best.

pedroeibar1

nowayingere wrote: »

Hi all,

I'm having a serious issue and I need your help to try to come up with the best possible plan to get these matters solved................We spoke to a few solicitors but we want to hear from you whats the best thing we can do. ........ Any help is more than welcome.

Listen to what the solicitors tell you and accept their advice.

The Corinthian

I agree OP that you've been quite naive, in that you allowed their credit line to run up too far, shelled out your own money to cover them and ultimately did not manage risk.

What I think is important here is paper trail, in particular the NDA, contracts and various agreed deliveries (that they contend you failed to achieve). Email communication is also important, although how admissible it may be is open to debate. It is important that a solicitor goes through them and advise you. Indeed, any hope of winning a case against them is down to the paper trail.

Note however, that even if you win a case against them this does not mean you'll ever see a penny; cowboy outfits happily fold when necessary all the time and the cost of reclaiming monies owed from such elusive entities can quickly prohibitive.

As has been suggested, have a solicitor advise you and for future reference learn from the experience, that no matter who the client is, there's a limit to the rope you should afford them unless you want to find yourself hanged by it.

dbran

"There are many reasons for this, but the main was that [XYZ - ModSnipped] was OK with not paying taxes as to have a lower project cost, that's why I was paying those guys, and eventually [XYZ - ModSnipped] would pay me everything in the end."

You have no hope. You cannot ask the courts for help when one of the key parts of the agreement was the avoidance of paying taxes.

its like the getaway driver in a bank robbery taking an action complaining that he wasn't paid.

If you only want to be paid in cash and no tax then you operate outside the law and you take the consequences.

dbran

Chesty08

How does one continue to work for 9 months without being paid a penny and pay other services for the job to be finished all while having no contract or previous experience with the company.

I'm absolutely baffled as to how this has taken you so long!

The Corinthian

Chesty08 wrote: »

How does one continue to work for 9 months without being paid a penny and pay other services for the job to be finished all while having no contract or previous experience with the company.

I'm absolutely baffled as to how this has taken you so long!

You'd be surprised how easily it can happen, although I'll have to admit letting things slide for nine months is a bit long.

I got a consultancy gig ten years ago through a contact (who only knew them in passing) about ten years ago from a consultancy in NI. Billing was T&M, monthly and the end of each month with 10 working days credit.

Location was in Newbury, UK, which involved flying in/out every week (as I was based in Dublin at the time), transport to/from Heathrow, daily transport, hotel, and subsistence - before we even start talking about my rate. This meant waiting up to six weeks before even the first payment, from a company I had no prior business relationship with.

By the time I did get paid, they owed me a lot more than the OP is owed - so I can tell you I breathed a very deep sigh of relief. I had made a calculated call at the time, that as long as the gig was long enough to make some serious hay, the client happy and they were making a decent enough margin, they'd continue paying the goose that lays the golden eggs (they'll always pay you as long as they think they need you) - needless to say, when it came to the final payment, that's when the problems arouse.

At the end of the day, sometimes you need to take a calculated risk to land the profitable engagements.

Chesty08

The Corinthian wrote: »

You'd be surprised how easily it can happen, although I'll have to admit letting things slide for nine months is a bit long.

I got a consultancy gig ten years ago through a contact (who only knew them in passing) about ten years ago from a consultancy in NI. Billing was T&M, monthly and the end of each month with 10 working days credit.

Location was in Newbury, UK, which involved flying in/out every week (as I was based in Dublin at the time), transport to/from Heathrow, daily transport, hotel, and subsistence - before we even start talking about my rate. This meant waiting up to six weeks before even the first payment, from a company I had no prior business relationship with.

By the time I did get paid, they owed me a lot more than the OP is owed - so I can tell you I breathed a very deep sigh of relief. I had made a calculated call at the time, that as long as the gig was long enough to make some serious hay, the client happy and they were making a decent enough margin, they'd continue paying the goose that lays the golden eggs (they'll always pay you as long as they think they need you) - needless to say, when it came to the final payment, that's when the problems arouse.

At the end of the day, sometimes you need to take a calculated risk to land the profitable engagements.

That is true and one I can comprehend.

However no payments at all for 9 months, is a bit suspect. You would need some form of commitment from said company in my eyes.

The Corinthian

Chesty08 wrote: »

However no payments at all for 9 months, is a bit suspect.

Well, I do agree that in this regard the OP was a tad naive. As I said, I took a calculated risk that turned out to be good, OP took a bad one.

nowayingere

Hi Geniass,

Geniass wrote: »

If I understand this correctly neither of you are living in Ireland, but did work for an Irish company.

Yes that's right.

Geniass wrote: »

The first mistake was allowing the fees to build up to €20k, the second was paying the company's bills out of your own money. This was very naive and the owners of the company realised this and are hoping to scam you out of your money.

Yes that was a big mistake indeed, but I believed them, an old couple and such, but sure it was a big mistake and I won't be doing the same again, that's for sure.

Geniass wrote: »

Do you have someone i.e an Irish friend to contact them on your behalf. Making it more local would help.

We would have to hire a solicitor for that, but that means spending yet more money and there's no guarantee that we will recover any owed monies anytime soon.

nowayingere

Buttercake wrote: »

I'd love to know what job pays €4000 a day

Where did you get that figure from? I worked for them for 6 months, plus I paid 6K of their expenses using my own money.

jimmii

nowayingere wrote: »

Where did you get that figure from? I worked for them for 6 months, plus I paid 6K of their expenses using my own money.

In the OP you mention 4000/day and a total of 7000 grand presumably this was local currency and not Euro.

If you hire a solicitor you may get your money back if you don't then it seems highly unlikely that you will seems like you have not much choice other than to try decide whether the legal route can be justified financially. If you won a case do you know they have the money to pay?

nowayingere

dbran wrote: »

"There are many reasons for this, but the main was that [XYZ - ModSnipped] was OK with not paying taxes as to have a lower project cost, that's why I was paying those guys, and eventually [XYZ - ModSnipped] would pay me everything in the end."

You have no hope. You cannot ask the courts for help when one of the key parts of the agreement was the avoidance of paying taxes.

its like the getaway driver in a bank robbery taking an action complaining that he wasn't paid.

If you only want to be paid in cash and no tax then you operate outside the law and you take the consequences.

dbran

Well I get your point. At this point I have no hope of recovering my money, but it seems strange that my friend you had a valid permanent contract can be put in the same situation as me. But when you are abroad things are a bit more complicated to sort.

Axwell

nowayingere wrote: »

Where did you get that figure from? I worked for them for 6 months, plus I paid 6K of their expenses using my own money.

Right here...

nowayingere wrote: »

Since I was already working and had a real interest on helping these old guys I scraped the daily rate we talked about initially (4000/day) and said that I could deliver the solution for around 7000 grand.

nowayingere

jimmii wrote: »

In the OP you mention 4000/day and a total of 7000 grand presumably this was local currency and not Euro.

If you hire a solicitor you may get your money back if you don't then it seems highly unlikely that you will seems like you have not much choice other than to try decide whether the legal route can be justified financially. If you won a case do you know they have the money to pay?

It was a typo then it was 400/day. They have the money yes, the work for state entities (irish prisons and national museum) plus they spend a fortune on racing cars. It seems that the best to do it send an email to both of those institutions and make sure they get a bad name and probably lose those contracts.

I really did not want to get to that, but they leave me no other choice.

jimmii

nowayingere wrote: »

It was a typo then it was 400/day. They have the money yes, the work for state entities (irish prisons and national museum) plus they spend a fortune on racing cars. It seems that the best to do it send an email to both of those institutions and make sure they get a bad name and probably lose those contracts.

I really did not want to get to that, but they leave me no other choice.

That is definitely NOT the best idea! Have a meeting with a Lawyer see if they think you have a case and how much it is likely to cost then think about it.

nowayingere

jimmii wrote: »

That is definitely NOT the best idea! Have a meeting with a Lawyer see if they think you have a case and how much it is likely to cost then think about it.

My friend, I would even leave it, forget about it, but I spent my own money, and just thinking about having to spend more money just to be paid for work I have done makes me sick,

I will leave it for a few days more and when I get back to Ireland I might see a Lawyer... anyway lets see how it goes.

Thanks jimmii

Kristopherus

OP, If the 2 directors of XYZ are an old couple, would you not consider calling to them, accompanied by your solicitor?

nowayingere

Kristopherus wrote: »

OP, If the 2 directors of XYZ are an old couple, would you not consider calling to them, accompanied by your solicitor?

Hi Kristopherus, they basically stop taking my calls and replying to my emails. I did use a different number to call them too but as soon as they realise it is me, they just hang up.

They are an old couple, but they have a few more of their family involved but none of them are talking to us at this point.