Hardin County E-911 defrauded by payroll services firm

April 21– Hardin County’s E-911 district had to cough up more than $50,000 to satisfy the Internal Revenue Service and healthcare providers after being ripped off by a Nashville-based payroll services and insurance company.

A federal bankruptcy judge has ordered Sommet Group to pay $6.9 million to numerous creditors such as the Hardin County Emergency Communications District, which contracted with the company in July 2009.

In July 2010, the Federal Bureau of Investigation raided the firm following allegations it was not meeting contractual obligations, including paying taxes and medical bills of its customers.

The probe forced Sommet Group into bankruptcy proceedings.

Since the raid, Hardin County E-911 has been handling its own payroll chores and found a different, but more expensive, insurance provider for its employees.

According to the latest independent audit of the local E-911 district, the district lost $53,194 because of the "third party fraud."

"From what we understand, it was nothing that E-911 did on their own. They were making the payments" for the payroll taxes and insurance, said Bethany Godwin, who worked on the audit conducted by the Savannah accounting firm Williams, Jerrolds, Godwin and Nichols, PLLC.

Hardin County E-911 Director David Alexander indicated that in shopping around for insurance, the E-911 board was enticed by Sommet’s low premiums and positive reputation at the time.

He said that following the IRS action, the district immediately got in touch with the federal agency and paid the payroll taxes which were in arrears. Ultimately, the IRS agreed to refund all of the approximately $8,000 in late penalties.

Hardin County E-911 also had to cover medical bills which Sommet left unpaid, but the total cost to the district, including payroll taxes, is around the $53,000 mark, Alexander said.

As far as any settlement the district may eventually receive, "I think pennies on the dollar is what’s typical in a case like this. It was a very frustrating experience, to say the least."