2012 in Review: Law & Government
Friday, December 28, 2012 7:00 AM
One woman’s crusade
Kent Darr is the Business Record’s Law Goverment beat reporter.
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Lisa Kragnes and attorney Brad Schroeder called it nine years ago when they said the city of Des Moines’ franchise fee was an illegal tax. Iowa District Court judges agreed, Iowa Supreme Court justices agreed, and in October the U.S. Supreme Court essentially said “enough is enough” by refusing to hear the last in a long line of city appeals. Kragnes, Schroeder and city attorneys are back in court, working out the details of what could be a $40 million payout to city residents who paid the fee between 2004 and 2009, when the Iowa Legislature, in an 11th-hour vote, passed a law that legalized the city’s franchise fee. Meanwhile, a Polk County judge got a little testy during a recent court hearing on the case after city attorneys presented letters, most of which appeared to be form letters, from prominent Des Moines business and political leaders that essentially said they didn’t want a refund. The Kragnes case is a non-opt-out class-action suit, meaning those business leaders will receive a refund whether they want it or not. A city attorney said there was not an organized effort to collect the letters. Read full story
Former clients accuse late bankruptcy attorney of misconduct, seek millions from his estate
In a Jan. 6 Business Record article, attorney Jerrold Wanek said it was time to take a break from his practice, which focused on the legal woes of financially challenged businesses and businessmen. On Jan. 25, he died of a heart attack while on vacation. He was remembered as a legal warrior who worked long hours and wasn’t afraid of aggravating opposing attorneys, and a few judges, in defense of his clients. Some of those clients later filed more than $8 million in claims against his estate, some alleging various forms of misconduct. Among the clients was Randal Walters, who said he was overcharged. Some claims have been dismissed, and hearings are scheduled on others, including Walters’. Read full story
Don DeWaay gives up broker-dealer license
2012 didn’t begin for Don DeWaay much better than 2011 ended. Once considered a “powerhouse” in the brokerage business, DeWaay was being chased by disgruntled investors. In January, after DeWaay filed documents in a Delaware court contending that challenges against his investment practices could mean financial ruin for him and his companies, investors changed tactics and filed two lawsuits seeking class-action status in Decatur County District Court. Late in the year, DeWaay shuttered Clive-based DeWaay Financial Services and gave up his registration as a broker-dealer. A hearing is scheduled for early next year on whether to approve a $3 million settlement of the two lawsuits. Read full story
Vratsinas goes a few rounds with the taxman
Greater Des Moines businessman John Vratsinas has had problems with the Internal Revenue Service for several years, but they came to light in October when clients of his InFocus Partners professional employer organization complained that IRS agents were visiting them. Clients said the IRS agents told them they could be held responsible for more than $1 million in payroll taxes that they thought had been paid by InFocus. It turned out that Vratsinas and his payroll and human services companies owed more than $6 million in withholding taxes. By mid-November, the taxes owed by InFocus had been paid and Vratsinas’ tax lawyer said all other taxes would be paid early next year.
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Developer Walters said he was guilty of bank fraud
Randal Walters, left, avoided the drama of standing trial with development partner John Kline by pleading guilty to a single count of bank fraud in a case that involved a $4.5 million bank loan that he claimed was for a Greater Des Moines condominium project but instead was used for other purposes, including making a down payment on a Florida condominium and paying property taxes on another project. Walters and Kline were indicted on nine counts of bank and wire fraud in connection with the activities of their development companies. Walters apparently will avoid prison time under the plea deals but could face two years of probation. Walters is to be sentenced in February. Kline’s trial is scheduled for Jan. 22. Meanwhile, Kline also spent a month in the Marion County Jail for failing to pay child support. Read full story
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