Thursday, February 4, 2010

Daily Planet Stung By Alleged Fraud

By Robert Gammon
Thu, Feb 4, 2010 at 10:24 AM

The Berkeley Daily Planet says that it and numerous other small East Bay companies were victimized by a payroll fraud scheme perpetrated by an East Oakland payroll business. In a front-page story today, Becky O’Malley, editor and co-owner of the Planet, states that ripped off the paper for “a minimum of tens of thousands with the possibility of hundreds of thousands of dollars,” before closing its doors and vanishing from the East Bay last month.

According to O’Malley, not only handled the Planet’s payroll checks, but also its tax payments to the state and the IRS. However, O’Malley says she recently discovered that had been underpaying the taxes, and then pocketing money that was supposed to go to the state Franchise Tax Board and the Internal Revenue Service.

O’Malley also said she has learned that owners of many other East Bay small businesses, including the well-regarded Emeryville restaurant, Bucci’s, were victimized by The Planet has hired a lawyer and filed suit yesterday against, but O’Malley says she has reason to believe that company founder Bill Norgren has fled to the Philippines.

The alleged fraud scheme is just another blow to Berkeley’s hometown newspaper, which has suffered badly in the recession. It also has been hurt by a campaign brought by East Bay Zionists who are trying to put the paper out of business with an advertiser boycott because O’Malley sometimes publishes readers’ opinion pieces that are critical of Israel’s treatment of Palestinians.

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