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LESSONS IN HUMAN RESOURCE MANAGEMENT

December 15, 2005

Managing your top executive personnel can be difficult for any boss. Cheating on taxes doesn't make it any easier:

The prominent owner of a major Petaluma business faces up to 21 months in prison after pleading guilty to five counts of tax evasion in a federal court hearing on Thursday.

Lee Nobmann, 55, CEO of Golden State Lumber, had fought the charges ever since Jim O'Brien, the firm's former chief financial officer, reported questionable company behavior to the IRS after being fired in 2001.

Don't make the financial guy mad when you do stuff like this:

Federal authorities claim he intentionally failed to pay the government some $330,000 by attributing his private, personal expenses to the company, and writing them off as business expenses.

Nobmann said that his company, which earns $220 million per year, paid for his private, personal expenses, including credit card payments for his wife, and that he deposited rebates from vendors into his personal account without reporting them as his or his company's income.

Nice going. Next time do something more discreet, like leaving compromising photos on a shared directory on the office network.

The moral? Cheating on your taxes can be excellent blackmail fodder.

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