James and Gloria Devane sued Patrick and Ricki Landers in May, shortly after Hickory Mist Luxury Cabin Rentals, the company the four of them owned, abruptly closed. The Devanes alleged Patrick and Ricki Landers spent hundreds of thousands of dollars from the business’s coffers on personal expenses.
The Devanes’ attorney, Jim Gass, had filed for a summary judgment after the Landerses had failed to file a response before a deadline set by the court.
But in the meantime, attorney Patrick Stapleton filed a response and a countersuit claiming that it was the Devanes who misused funds, and that the Devanes are actually under investigation by the IRS.
“It is admitted that the defendant, J. Patrick Landers, has failed to provide the plaintiffs ... certain financial information with regards to taxes, at the advice of their accountant, due to the fact that the plaintiffs have submitted fraudulent tax returns from 2005 leading up to 2008.”
Tax returns for 2009 and 2010 have not been filed, according to the lawsuit, but the Landerses have asked for extensions so they can return accurate returns. They notified the IRS of the discrepancies.
In fact, Stapleton says, the Devanes want the records so they can alter them before the IRS sees them.
“The plaintiffs, by filing this complaint, have attempted a preemptive strike, have come before this court and misrepresented the facts in order to obtain the books and records of the company so that they may be manipulated for the plaintiffs’ purposes.”
The countersuit alleges that James Devane insisted the company use his personal accountant, a Maryland woman, to oversee financial statements and tax returns when they started the business in 2005. He instructed her to apportion all the company’s losses to the Devanes, Stapleton wrote.
“This action was taken at the instance of the Devanes, was illegal, was in fraud of the Internal Revenue Service, and was in fraud of the Landers.”
They charged interest on their capital contributions to the business, he said. “Due to the treatment the counter defendants gave their capital contributions, and the breach of the parties agreement and tax laws, the counter defendants caused to be prepared and filed with the IRS fraudulent tax returns showing fictitious loans to themselves and improper deductions for interest on said loans.”
They used the restraining order issued by the court “to dismantle the company, stripping of its assets, including cash, to the benefit of the counterdefendnats and to the determine of not only the Landers, but to the customers of the business and the creditors of the business as well.”
In fact, that led to the business’s inability to repay $352,598.41 in prepaid rental fees for people who booked rooms before its abrupt closure, according to the complaint.
Both couples are facing a federal suit filed by a company that processes payment card transactions, saying that it had repaid customers for those transactions and is seeking reimbursement for the expenses.
n jfarrell@themountainpress.com
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