It turns out the deal that put former Stockton CFO Mark Moses into hot water with the FPPC didn’t play out too well for him.
Moses is taking Innoprise Software Inc., the Colorado-based firm that lured him away from Stockton’s City Hall, to court on a complaint that Innoprise founder/CEO Dennis Harward stiffed him for $71,500. Ouch.
Moses caught $8,000 in FPPC fines for negotiating a job with Harward, while simultaneously negotiating a contract with Harward for the city. The FPPC said that was a no-no. Moses’ defense was weak given that he ended up leaving Stockton to join Innoprise and open a Pleasanton office as a regional director, but this lawsuit kind of supports his claim to the FPPC that he didn’t profit from his Innoprise deal.
Here’s why. According to the lawsuit, Moses started work for Innoprise in August 2010. He was to earn $150,000 a year (of $12,500 a month). A few months in, Moses started hearing from Harward of a “cash flow” problem and didn’t get his paychecks. Harward assured him things would be fine, because Innoprise was being sold to Harris Enterprise Resource Planning. Once the sale was final, Harward assured Moses that everybody would be flush again.
Not so, said Moses, who felt played and filed suit.
Here are some relevant parts of Moses’ amended complaint filed in federal court:
63. Innoprise paid all of Mark Moses’ expenses as submitted per this agreement and did pay the contract salary amount for services in September 2010 and on a delayed basis October. However, neither Innoprise or Harward have paid the contract price for services for the months of November, December 2010 and January, February, March and April 2011.
64. Harward and Innoprise are indebted under the contract for six months’ payments in the total amount of $71,500.00.
81. Innoprise, Harward and Harris do not define Moses as an employee but rather an independent contractor.
82. The obligation for Moses services is shown on the books and records of the company and would have to be evident in any due diligence audit.
83. It is Moses information and belief that Moses does not appear as an “employee” on the schedules of the April 29 agreement which was drafted by Harris because Harris and Harward purposely mis-defined Moses so that they would have a better package to show the Harris board of directors for agreement approval and to avoid payment of the obligation by not including payment in the purchase agreement and by diverting the funds to a wholly owned entity of the Harwards – Harward Investment Inc. (defunct in Colorado). This failure to include Moses on the schedule in the agreement and the diversion of moneys for the payment of Innoprise obligations was intentional so far as known by them or to the extent that Harward was required to designate the payment of obligations. The payment to Harward Investment became an intentional act to avoid payment and fraud. The amount of the purchase was insufficient to cover the obligations of Innoprise which was known to Harris and thus Harris knew not all creditors would be paid. Harward admits that Harris told him to pay Moses out of the proceeds but Harris did not provide a means to have this done. As such it constructively defrauded Moses by not making payment, diverting the assets and their value and continuing the business of Innoprise without paying its bills.