"Ex–nursing home exec gets 30 months and restitution"
San Francisco Chronicle
Henry K. Lee, Chronicle Staff Writer
Saturday, July 14, 2007
The president of a corporation that ran nine nursing homes in Oakland, Alameda, Hayward and other East Bay cities was sentenced to 30 months in prison Friday after being convicted of 107 felony counts of failing to pay millions of dollars in payroll taxes.
Jack Easterday, 53, of Alameda must also pay $8.7 million in restitution, U.S. District Judge Charles Breyer said at a hearing in San Francisco.
Easterday was president of Employee Equity Administration Inc., which runs the nursing homes, and headed Skilled Logic Systems Inc., a software company.
Easterday ran his business on money he should have paid to the government in taxes, prosecutors said. He bought a six–bedroom home now valued at $2 million, sent his children to private colleges, funded his mother's monthly pension and bought a sailboat and jet skis, Assistant U.S. Attorney Jay Weill wrote in a sentencing memorandum.
"He used the withheld payroll taxes like an ATM machine for working capital for his business activities," Weill wrote.
Easterday’s attorney, Ted Cassman, argued against any prison time, citing President Bush’s July 2 decision to commute the prison sentence for Lewis "Scooter" Libby, Vice President Dick Cheney’s former chief of staff. Libby was convicted of lying to federal agents and a grand jury investigating the leak of a CIA operative’s identity.
Cassman also wrote in court filings that the Internal Revenue Service was to blame in part for failing to "take measures to cure the delinquencies."
Federal prosecutors charged Easterday in January with 109 counts of failing to pay more than $10 million in payroll taxes from 1998 to 2005. A jury convicted him in March on all but two counts.
The federal prosecutor estimated that the total loss with interest was more than $17 million.
The charges related to payroll taxes owed by Alameda Care Center, Fontana Development Corp., RCC Facility Inc., Brookvue Care Center, Eden West Convalescent Hospital, Homewood Care Center, Oakland Care Center, Pleasant View Convalescent Hospital Inc., Sunrise Healthcare Center and Skilled Logic Systems Inc.
In February 2006, a separate federal jury in Oakland convicted Easterday of 47 counts of failing to pay payroll taxes. But U.S. District Judge Claudia Wilken reversed the guilty verdicts, citing a problem with the jury instructions.
This article appeared on page B – 3 of the San Francisco Chronicle