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What happened to ComPol?

Details on the company's destruction.

What happened to ComPol?

ComPol was a wonderful little company and its destruction was a senseless tragedy. We primarily made special equipment that gave tens of thousands of blind people access to newspapers and magazines. We also made equipment for radio and television stations all over the world. We even made equipment for our military and the military of Israel. My employees had been with my company for over thirteen years. They liked their jobs and we were like a family. We were proud of our company.

In early 2002, a bank employee for a major bank appears to have falsified a financial statement and applied for a loan in my name. It happened at the same time that my company was applying for a loan to cover losses incurred during the last quarter of 2001. The falsified documents and illegal loan application caused great confusion and delayed my loan application by nearly two months. The delay cost tens of thousands of dollars. The bank apologized for the inconvenience, but refused to help with my losses. The government, including the Office of the Comptroller of the Currency, the Attorney General, the FTC, the FBI and the local police, refused to investigate. Attorneys told me that banks are too big to sue and that I had to put it behind me. So, in early 2003 and with great regret, I sold my house to cover the losses.

A few weeks later, I received a call from the IRS about back taxes. Because of the legal problems, I had fallen behind on my withholding taxes, and although I was making regular payments, it was just not enough. The agent was extremely hostile to me. She called me a liar and a tax cheat. I showed her a copy of the complaint that I had filed with the FBI and a contract that proved I was capable of paying the taxes within a month. She declared that the documents were forgeries and demanded payment within two weeks.

I contacted my banker for help. Since the matter of the false loan application had not been resolved, she declined my request for a loan. She referred me to a non-traditional lender. His advice was to consult an attorney and he gave me an attorney's business card. To my surprise, the name was familiar; it was a cousin whom I had never met.

The following day, I visited his office in Boston. We discussed our family trees back to our common ancestors. He told me that I had no legal recourse against the bank, without even looking at the documents. He said that getting an extra week or two from the IRS would be no problem. He had me sign an IRS form granting him power-of-attorney. His associate started immediately to negotiate with the IRS.

The next week, I was contacted by two potential clients who wanted me to design some systems for them. One system involved automobile navigation and the other was a system needed by Homeland Security.  I was also contacted by a company who wanted to represent ComPol in South America, where my products were in demand. It seemed to me that recovery was only a few months away.

Then, I received a payment from one of my customers that was almost exactly the amount demanded by the IRS. I notified my attorney and requested that he tell the IRS that payment would be made just as soon as the check cleared. When the check cleared, my attorney told me that the IRS was refusing payment of the back taxes. The agent wanted to punish me. My attorney told me that he needed to be paid $2000 for further work with the IRS. He told me not to hold the funds, but to pay some of my bills, including payroll.

A week later, my attorney and his associate came to my office and said that they had received a seizure notice from the IRS. They said that the only way to stop the seizure was to file for Chapter 11 bankruptcy. They had no time to look at the company books or business plan. They also had no time to discuss with me the details of Chapter 11 bankruptcy or even to see if there was a viable exit strategy. They told me that the papers had to be signed immediately so that they could get to the courthouse in Manchester by 5:00 PM. I made it a point of advising the attorneys that most of the creditors were either in my name or cosigned by me and they said that it was not a problem.

The major problem facing ComPol was a lack of working capital and poorly structured debt. The company debt was not large and, with the exception of the IRS, we were not seriously in arrears with our creditors. We had a large backlog of orders and more were coming in each day. The design contracts generated large profits, but were time consuming. The gross profit from the contract that we were completing actually equaled one third of the entire company debt. There was no business reason for filing for bankruptcy. It was done entirely to avoid IRS seizure.

Once in bankruptcy, I had to hire a member of the law firm to consult me on a daily basis on how to operate within the Chapter 11 laws. The cost of the consultant drained the company of virtually every cent that we received. The attorneys recommended bringing in an investor. He was prepared to take half the company in exchange for paying the legal bills. I rejected his offer and temporarily closed the company.

The consultant went searching for funding. The business plan that he prepared emphasized the work for the blind which had a very low profit margin. It minimized the commercial work, which was very profitable, but was more speculative. Nobody was impressed by the business plan, so the consultant became more imaginative. It took him three months to negotiate a loan using my elderly parents' home as collateral. Not only did I find it unacceptable to burden my parents with a new mortgage, but the amount of the loan was insufficient to emerge from bankruptcy and to revive the company.

I had the option of converting from Chapter 11 to Chapter 7, but I would have been prohibited from selling my knowledge and expertise, since this was a company asset. The solution was to sell the building that housed the company. With the deposit, I reopened the company just long enough to fill the prepaid orders placed by some blind people earlier in the year. The day after the last order was shipped, the new owner took possession of the property. My employees' final task was to load the entire company into a storage trailer and then the company closed forever.

The balance of the proceeds from the sale of the building went to the attorney. He had received a total of nearly $87,000. Of that amount, $18,000 went to the creditors and $69,000 went for legal fees. Most of the creditors were not satisfied with that arrangement and they have been relentlessly harassing me. The creditors are not satisfied that I have lost everything that I have built in the last thirty years; they want everything that I have. I have not only received nasty letters and court summons from a number of attorneys, but threats to harm my 86 year old father. My attorney said that he is only responsible for defending the company against its creditors.  He said that he is not responsible for defending me against the company creditors.  The police will not take action against those attorneys who threatened my elderly parents for fear of being sued.

The sense of helplessness and anger peaked during the spring of 2005. It was so much that my health completely collapsed and I almost died. After three months, I made a recovery, but the stress of all the threats and harassment is preventing me from full recovery.

I was hoping that I could restart the company, but my credit, which was perfect prior to these problems, has been so badly damaged that I will not be able to get a loan or credit card until I am 70 years old. I was contacted by a man in Spain who wanted to build a company around my technology and manufacture my commercial products in Spain. We corresponded and exchanged ideas for several months. In August 2005, he said that the papers for the new corporation were being prepared.  It was their intention to launch an "Initail Public Offering" to raise the capital.  His investors backed out because they believed that I did not have title to the intellectual property that was once part of my company because of the many lawsuits being filed against me. 

It is unlikely that those products that I worked so hard to develop will ever go into production again. Some of those products were put onto this website and others were almost ready for posting when the company closed. These products could have helped so many people and now they are gathering dust.

During the final days of ComPol, I was contacted by Punch Kandiah, an Indian who had sought a better life in Canada. His company is Mani National Corporation in Toronto (http://www.maninational.com).  He decided to make SCA receivers and had made contacts with a number of Chinese manufacturers. He wanted to work with me to incorporate my designs into his products.   During the last two years, I have been working to that end, but it has not been easy. The harassment by the creditors' attorneys is so emotionally draining that I can no longer concentrate and I make many mistakes. Work is slow, but progressing and soon the new products will be available.

During the last few years, I have reflected on the thirty years that I put into the business, as well as my entire life. I have thought about my mistakes and my achievements. During the last thirty years, I have made many mistakes, but the only irreversible mistakes have been in trusting the legal system. If I had found a competent, honest attorney who cared about me and my business thirty years ago, my business would have easily overcome the business mistakes that I had made. It would have been very successful and helped many people.

I have achieved a lot during the last thirty years. I developed an SCA design that has become the world standard. I have helped tens of thousands of blind people. I have helped churches of all faiths to spread the word of God to their various flocks. I have developed and built equipment for emergencies that have probably saved peoples' lives. I have built equipment for the military that has made our nation stronger.

What could I have done if I had not spent the last fifteen years fighting various legal battles and corrupt court officers? I do not know! Maybe I could have done more to help blind people, or other disabled people. Maybe I could have designed new equipment for emergencies and saved many lives. Maybe I could have done something that I cannot even imagine today.  It might have been something wonderful that would have helped millions of people.  Or maybe I would have done no more than I have done under the current circumstances. What could I have done?  I do not know!   Neither does anybody else and nobody ever will.  For all sad words of tongue or pen, The saddest are these:  "It might have been!"  JOHN GREENLEAF WHITTIER

What about the future?  It looks like I will spend the rest of my life trying to recover from this mess.  If I do recover, maybe I can do something that will help to improve the lives of many people.  Who can say?

If I could go back thirty years, would I start this business again? No!   But I enjoyed every aspect of running this business except the legal problems. I enjoyed taking a concept, an idea that existed only in my mind, and turning it into a working unit. I enjoyed figuring out how to mass-produce that product. I enjoyed purchasing the parts and seeing those individual parts become the finished product. I enjoyed the challenge of finding customers and convincing them to buy my product. Most of all, I enjoyed hearing from customers whose lives were improved because I worked to bring my concept into their lives. I have received several letters that were almost identical: "My father had your radio by his bedside when he died. It brought him so much comfort during his final months. Thank you."

In order to prosper, or even survive in business, you have to know how to beat the system. It is not enough to work hard and to make the right decisions. You need to know whom to bribe and how to break the law with impunity. The honest man cannot succeed. This will be the downfall of our country and our society.


Frank Karkota
President (formerly)
ComPol, Inc.

fkarkota@compolinc.com

Update:  June 23, 2007

It has been over five years since the bank employee attempted to defraud his bank, at my expense. I continue to spend most of my time and effort in resolving the legal problems that were created by that selfish act.

I contacted the IRS Inspector General and filed a complaint against the IRS agent.  The agent from the Inspector General said that the IRS never refused payment and never issued a seizure notice.  The agent said that it was my attorney who committed the crime and urged me to file a complaint against my attorney with the Massachusetts Board of Bar Overseers (BBO).  The BBO conducted an investigation and was adamant that my attorney had done nothing wrong.  The Inspector General never reported the result of their investigation.

There is an underbelly to our legal system of attorneys who persecute crime victims and a corruption in our court that allows these attorneys to act with impunity.  These attorneys do not care about what is right and just, only what is profitable.

How much is a human life worth? I have gone to at least a dozen government agencies for help and over fifty attorneys. Nobody will help me. Some attorneys have told me, "You're not worth the trouble. Nobody cares and nobody will help you." Instead of resuming my career and doing the work that I love, I expect to spend the rest of my life trying to undo all the harm that has been done to me.

Often, on the news, I hear about the police and volunteers spending hundreds of hours and thousands of dollars searching for a person lost in the woods. I am lost in the legal system and nobody will lift a finger to help me. But the results will be the same.

I have spent my life in service to my country. When I was called to serve my country in the military, I did not want to go, but I did. Not only did I serve the one year in Vietnam as ordered, but I volunteered for another seven months. When I finished my service, I started a company that made equipment for the blind. I helped tens of thousands of blind people and I created jobs and I paid taxes. I do not regret any of my service to my country; I am proud of it. Along comes a bank embezzler, a very hatefull IRS agent, and a dishonest lawyer; and not only have I lost everything that I have accomplished during my lifetime, but I have also lost my future.

I wrote a letter to Governor Romney about my experiences.  I have posted this letter and his response to show what it is like trying to get justice in Massachusetts.  I tried to reach him through his faith, in our system and our Creator.  His response is sad.

Letters to and from Governor Romney.

Update:  August 1, 2007

The Ayer District Court notified me today that the judge ruled that I am responsible for paying those creditors from the bankruptcy who never received payment from my attorney.  This is unbelievable!

January 2, 2008

On March 1, 2006, I filed a complaint against my bankruptcy attorney with the Massachusetts Board of Bar Overseers (BBO).  There were four charges. 

First, the attorney told me that unless I filed for bankruptcy immediately, the IRS would seize the business, simply because the agent assigned to my business had a grudge against me and refused to accept my payment.  The Treasury Inpector General conducted an investigation and found that the IRS had not rufused my payment and had no intention of seizing the business.

Second, there was a discrepancy of over $10,000 between the amount paid to my attorney and the amount reported to the court in the closing summary.

Third, GE Capital was a creditor and according to the bankruptcy, the debt was discharged and they accepted a settlement payment.  According to GE Capital, they never received the payment.

Fourth, the State of New Hampshire was never notified of the bankruptcy and my bankruptcy attorney never rectified the situation with the Department of Revenue.

The investigation, perportedly conducted by the BBO, said that the IRS would have seized the business had I not filed for bankruptcy.  The financial statement submitted by the attorney to the court was balanced and the fact that it did not reconcile with my books was irrelevant.  Therefore, according to the BBO, the attorney did nothing wrong.  The BBO did not indicate how they reconciled the last two counts.

I am now being sued by GE Capital for the amount owed when the bankruptcy was filed, plus interest, penalties, and lawyers fees.  The attorney for GE Capital has seen the closing financial report showing that this account was settled and he obviously believes that it was perjured.  There is no doubt, in my mind, that I am dealing with government corruption and organized crime.  The question is:  how high does this go and how do I fight it?  The Massachusetts Attorney General will not investigate.  Why not?  The FBI also will not investigate.  Why not?

If anybody has a suggestions as to where I can get help, please let me know!

January 22, 2008

I have just written to the Social Security Adminstration.  I have requested that all future payments of my Social Security be divided amoung the creditors of the bankruptcy.  It is my hope that this will end the lawsuits and let me move on with my life.  I have attached the letter.

Letter to Social Security Administration.

ComPol's Mason, New Hampshire facility.  Not very fancy, but very functional.  The new owner decided to tear it down and build a couple of houses.

My employees.....My family

My cozy little house.  Now occupied by strangers!

ComPol, Inc. today.  The work of a lifetime reduced to the contents of a storage trailer.