LIBERTY TAX SERVICE Franchise Complaints

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• Liberty Tax's last independent board member resigns, says new executives "not qualified"
  By Kimberly Pierceall
  The Virginian-Pilot
  Feb 21, 2018 Updated 2 hrs ago

  https://pilotonline.com/business/stocks/article_5a395774-068e-5573-b801-abc511e86762.html

  The last remaining independent board member at Liberty Tax, elected by and representing its shareholders, has resigned following three others, saying he too is concerned with the "tone at the top" that led the company's independent auditor KPMG to resign in December.
  Ross Longfield, a director since 2001, resigned Wednesday, two days after the remaining board, hand-picked and led by founder and ex-CEO John T. Hewitt, voted to fire its CEO and appoint three longtime franchisees to be top executives.

  The board fired Hewitt from his role as CEO in September, but his controlling shares in the Virginia Beach-based company give him control of the board.
  Longfield wrote that the remaining board and new staff has made it "virtually impossible" for the chief financial officer and general counsel to do their jobs, "particularly as these three new executives are not qualified to hold these positions in a public company and they are all beholden to John Hewitt."

  – Kimberly Pierceall, The Pilot

• And now the General Counsel and CIO are leaving, too

  http://ir.libertytax.com/node/10796/html

• Ucccch, Martha O'Gorman is still there?!?

  IRS:
  DOJ:

  PLEASE!!! Do your job and put that man in jail. He has gotten away with nonsense for years upon years! He is a crook, a sleaze bag, a corrupt criminal, a scam artist and I know he's being scrutinized by law enforcement & hopefully the feds, but how many years can this continue before he pays for his crimes?

  Kimberly Pierceall: Thank you for writing these news stories. He is sickening and profoundly inept. At the very least he needs to go to jail for years. And pay restitution. And get the f--- out of that company once & for all. Kimberly: you should research how many Lawyers are working at the headquarters.....about 5 Lawyers to every one franchisee. This Franchise sucks big time, because of the man that won't go away.

• Franchisees will leave in droves come spring.

• As I predicted much earlier I never saw the firing of John Hewitt as a permanent thing and never believed for a second he would not fight like hell even to the point of nearly destroying the company to maintain absolute control over Liberty. In Johns mind this is and always will be his company and franchisees, Area Developers, and stockholders are just a means to an end. He honestly does not care about investors or anyone else, his only concern is his ability to rule over Liberty Tax as King.

  This latest round of revelations about his sexual conduct and his misuse of Company finances is only a hint of what he has done throughout the years. If someone in the Press or law enforcement would or could really investigate Liberty Tax Franchise they would learn very quickly it is a true real life Ponzi Scheme and its only objective is to maximize Power, Wealth, and Prestige for John Hewitt! This has been so from its founding and has never changed. From the very beginnings of Liberty Tax, John has implemented strategies designed to use people and their Money then discard them as quickly and efficiently as needed which has produced nightmares and broken families and bankruptcies for a huge number of ADs and Franchisees. Knowing that he could crush anyone that attempted to use the law or the courts to challenge him and his Ponzi Scheme, Very few iof these people realized that they never had a snowball chance in hell to succeed because Johns pan and design was to find a certain type of person that had talent but not a lot of financial resources then use that talent and there desire for success to greatly benefit the Company and himself then destroy them, discard them, then Repeat over and over again. This company has been and will continue to be a true Ponzi scheme as long as John has control.

  John learned his lesson from loosing control of Jackson Hewitt and now he does not have enough time to start over so either he succeeds in taking back full control or the company is destroyed. There will be no middle ground and he will destroy anyone or anything that he believes is against him or is trying to do what is best for the company or investors and who is not completely loyal to him and his desires.

• What also needs to be stated about John Hewitt's lack of ethics is that he designed a program that has an aim in defrauding the IRS as well as franchisees. He actively had his minions instruct us zee's on how to manipulate tax returns to make false Earned Income Credits for a target market that is not sophisticated enough to know that this is a fraud. Its shameful that the SEC, IRS or the DOJ fail to do something about him and his company, which are the root causes of these crimes. Instead, these agencies go after the franchisees that can ill afford corporate legal representation and are forced to plead guilty to whatever the prosecutors can come up with. Hewitt and Liberty also provide the information to the IRS for prosecution on the wayward Zees that have challenged him and his lack of business ethics. Please note: the information he provides to the government is the same false data that he taught the franchisee how to create. Somebody must by now realize that he is a crook on the first order. He has created an organization that is not any different than Nazi Germany in that all his deputies have to worship him, the AD's have to enforce the party line of deceit and fraud, and the franchisee's are stuck to providing the funds for the corrupt party apparatus. Add to the sexual harassment and other perversions, you got Germany of 1938 created all over again in Virginia. Hewitt and his organization are eventually going to crash and burn, but I wonder how many more people will be destroyed to the end of this process?

• Texastee, the truisms in your post made me both sick and angry. I don't think the franchisees are off the hook--they HAD to know that it is illegal to make stuff up on an official gov't tax return. If they did so because they weren't making any money and had big debts to Liberty, it brings up the old ethics question of whether the man who stole medicine his wife desperately needed is wrong to do so. The fact that Hewitt turns in his own zees proves Out's point that it's all about money and power to him, nothing to do with the company's reputation that affects hard-working zees and the investors. In the past when a wayward HRB zee made the news, the company immediately took over the locations and issued press releases saying they would make amends to harmed clients. Obviously they were protecting the company's reputation and the investors whose profit also depends on the brand. John thinks HE is the brand. What he is doing right now proves both of your points. The company is in hot water with the SEC because it doesn't have an independent board, so he makes the board less independent? The auditors quit even before that. What is he thinking? Certainly not about the brand and the people whose livelihoods depend on it.

• SarahEA: I see your point about franchisees knowing what they were doing in the falsification of returns. What I wanted to emphasize was that Hewitt and Liberty created an environment where this type of thing was very much encouraged. Liberty and Hewitt knew that this behavior was going to cause trouble for the franchisees in the future and he was able, as a true flim-flam artist, make sure the Franchisees had no choice but to follow this slippery slope. It also is apparent that Hewitt maintained that this way of tax preparation was unlikely to be noticed because of the high volume of returns and the lack of adequate IRS personnel for enforcement. For some time this was true until the IRS started noticing the irregularities, established a pattern that a lot of it was from Liberty, and cut a deal with Hewitt to throw all those franchisees under the proverbial bus. Again, the franchisees had to know what they were doing was bad, but were encouraged and taught how to do this by Liberty Tax corporate. Hewitt merely has used the franchisees for his personal gain and will do the same to the shareholders of Liberty Tax. You just can't fool all of the people all of the time.

• He is also a loan shark. When I decided to sell my losing store, the AD, which was never any help, pushed hard for me to take loans. Thank goodness I did not! The other store never made more than a few thousand profit, not matter what I tried, no matter who I mentored with. The whole experience was awful: the business model, the stupid marketing plan (charts that show it's simple - just spend more, buy more donuts), the ADs who knew nothing except the company one-liners. Its hard for me to fathom that this scam has survived for this long. I guess the one thing he is good at is scamming.

• John is just milking the system he created:
  19% Royalties and ad fees from hard working franchisees that receive software at exorbitant prices - 0.19 cents for every dollar they earn. So, a franchisee making $80,000 pays $15,200 for their software and maybe gets some ad promo crumbs to boot. A franchisee making $200,000 pays $38,000 for their software. The guy making $200,000 probably does not need tech support anymore and the electronic submission of 2 1/2 times the returns of the guy making $80,000 is of little extra cost to Liberty Corp. Of course John is fighting like mad to keep this cash cow paying system under his control.

  I hope by now that NO one is seriously thinking about buying into this mess of a company. I haven't posted on this site in awhile and I am surprised that the business model is still the same (all in John's favor). Please correct me if the 19% number has changed.

  We are watching the slow death of Liberty. It will die and hopefully the current franchisees that are honest and have built a decent business can continue their operation under their own name or sell their business when Liberty fails. It will fail, just taking a little longer than I thought it would take.