Making an impression
John Vratsinas has built a reputation in Greater Des Moines, but now some - including the IRS - are looking past first impressions
Friday, October 12, 2012 7:00 AM
InFocus gets a nod from Inc. Magazine
• 3-year growth: 282%
• 2011 Revenue: $19.2 million
• 2008 Revenue: $5 million
• Employees: 596
• Jobs added, prev. 3 years: 351
• Founded: 2008
• Industry: Human Resources
• Industry rank: #31
Source: Inc.com Inc. 5000
John Vratsinas is a man who makes an impression. Affable and active in community affairs – his civic involvement was noted when he made the Business Record’s Forty Under 40 class of 2004.
Acquaintances say he is a fancier of the finer things in life: expensive cigars, vacations to far-flung locales, an executive office that left one businessman likening it to the “greed is good” extravagance of Gordon Gekko’s office in the movie “Wall Street.”
Raised in the construction industry, Vratsinas launched his own company in 2000 and a few months later created an employee leasing firm to supply the business with workers. He billed the company, Iowa Construction Logistics Inc., for his own role as president of John Vratsinas Commercial Construction Inc.
In 2011 and 2012, Inc. magazine ranked a related company, InFocus Partners, among the fastest-growing companies in the nation, citing a three-year sales growth of 282 percent.
Since 2006 at least, Vratsinas has also made an impression with the Internal Revenue Service (IRS).
The IRS is seeking $3.8 million in withholding taxes and penalties from Vratsinas, Iowa Construction Logistics Inc. and, now, InFocus Partners. InFocus has evolved from employee leasing to a full-blown human resources firm operating out of a West Des Moines office park that was built by Vratsinas’ construction company.
Last week, Charles Ganske, a jewelry salesman whom Vratsinas hired in 2009 and promoted to president in late 2011, resigned from the company.
That was just days before the IRS filed a tax lien for nearly $1.2 million in withholding taxes that InFocus had not paid on behalf of its clients.
Vratsinas could not be reached for comment, and Ganske declined to comment about the tax issues at InFocus.
As a human resources firm, InFocus handles client companies’ payrolls, pays withholding taxes and unemployment taxes, manages employee benefits and performs other required human resources duties.
The Iowa Barnstormers, an Arena Football League team, was one of the InFocus clients whose payroll taxes were not paid to the government.
Barnstormers General Manager John Pettit said InFocus apparently did not cover payroll taxes “for a couple of periods” in 2011. He learned about the problem from the IRS.
“I wasn’t very happy with them since I pay them to take care of it,” Pettit said.
For now, the Barnstormers are leaving it to InFocus to resolve the problem. As is Matt Braet, a founder of fitness center Kosama LLC, who declined further comment.
Christopher James, a tax expert with Davis Brown Law Firm, is representing Vratsinas and his companies in the tax controversy.
The tax lien filed on Oct. 5 covered tax periods that ended in March and June of this year and was the result of an “administrative mistake,” he said It will be paid within a week and a half.
Payment plans are being worked on for the remaining tax liabilities, he said.
In addition, the IRS has filed a nearly $2 million lien against Vratsinas under what is called a “responsible person” penalty. The penalties are assessed against people who are required to collect, administer and pay withholding taxes but “willfully” fail to do so.
Those taxes were due between September 2008 and March 2011.
In 2010, Iowa Construction Logistics paid $40,179 in tax liens. Those liens have been released.
Previous business problems
Iowa Construction Logistics is the parent company of InFocus and its operating arm, ICL Staffing Inc., which was incorporated in December 2011 in Delaware.
In a separate incident, a series of operating advances from John Vratsinas Commercial Construction to the leasing company triggered a shareholders lawsuit in July 2009. In that lawsuit, a former company official and shareholder claimed that Vratsinas, who was the majority shareholder and founder of both companies, improperly transferred funds to the detriment of the construction company.
John Vratsinas Commercial Construction filed to reorganize its finances under federal bankruptcy laws in January 2009. The case was dismissed that June, after a bankruptcy trustee said the company should be liquidated and noted that Vratsinas demonstrated “a great deal of unfamiliarity with the day-to-day operations” of the company.
Ever the entrepreneur, while the bankrutpcy case was pending, Vratsinas said he was among several investors attempting to acquire the now-defunct Iowa Chops hockey team.
Allegations of improper money transfers
In the Polk County lawsuit, former company official Darren Schlapkohl said that while preparing for the bankruptcy filing, he learned that slightly more than $1.1 million in advances had been made from the construction company to the employee leasing company. Those advances were later secured by a promissory note.
In court documents, Vratsinas said he had no idea why Iowa Construction Logistics needed the money or how it was used. He did note that he approved both the payments and the promissory note, saying that he was on “both sides” of the table on the loan.
Vratsinas’ attorneys have argued in the case that Schlapkohl has “unclean hands” in the case -- meaning that he at least was a co-signer of various checks that flowed from the construction company to other entities that Vratsinas controlled, at least two of them in partnership with Schlapkohl.
Schlapkohl resigned from the construction company in 2009 and was given $1 for his minority ownership stake in the company, according to court records.
The case resulted in two-day bench trial. A verdict has not been issued in the case.
Vratsinas has been active in venture capital circles in recent years. According to his LinkedIn profile, he is a director at AgTech Americas, a company that “markets and licenses technologies developed in the United States to firms in South America.”
He lists “due diligence” among his areas of specialty and expertise.
Tax woes at a glance
Tax bills and penalties have been piling up for companies controlled by John Vratsinas. Iowa Construction Logistics Inc. is the parent of ICL Staffing Inc., which was tagged with a tax lien on Oct. 5.
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