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5/20/2004

Former Andersen execs sue company

By B.J. Plasket
The Daily Times-Call

DENVER — Two years after the breakup of accounting giant Arthur Andersen, two former executives at the firm’s Denver office have filed a federal suit claiming the tainted firm still owes them money.

In nearly-identical claims, David Parkhill of Boulder County and Linda Imonti of California are suing Arthur Andersen, claiming the firm failed to pay them and failed to properly distribute money withheld for taxes and retirement funds.

The Andersen firm was convicted in 2002 of obstruction of justice for shredding records for Enron after the Securities and Exchange Commission launched a criminal probe of the Houston-based energy firm.

After that conviction, Andersen ceased performing audits and most of its local offices were sold either to local partners or other accounting firms.

Parkhill’s suit claims the firm recruited him from his position at IBM in 1999 but failed to tell him he would “have to pay self-employment, FICA and state income taxes in all states where Andersen operated and the cost of his own benefits.”

Parkhill claims he arranged for money to be withheld from his paycheck to cover benefits and taxes, but that Andersen “did not pay on behalf of Parkhill on the sums withheld” and “did not return those sums to Parkhill.”

The suit also alleges that Parkhill ”never received any benefits of having an ownership stake in the partnership” and was not allowed to hold himself out as a partner in the Denver office.

Parkhill, according to the suit, was laid off in July 2002 after being told his position was being eliminated.

He claims the firm failed to give him his $10,416 final paycheck and refused to pay him for $20,121 in accrued vacation time.

Imonti’s suit, like Parkhill’s, claims Andersen failed to tell her she had to pay for her own benefits when she left the Grant Thornton firm to join Andersen’s Denver office in 1999 and failed to either distribute or return the withheld money.

Imonti, who lost her job in September 2002, claims Andersen failed to deliver her last paycheck of $13,263 and refused to pay her for $38,819 in accrued vacation pay.

Her suit also alleges that the firm “failed to credit” $30,000 in contributions to her 401(k) and Keogh retirement plans.

The Denver office was sold to KPMG — another Big Four accounting firm — after the Enron scandal virtually destroyed the company.

The federal conviction, according to a 2003 article on CFO.com, rendered the company’s auditing business worthless, since publicly-traded companies are not allowed to use audits prepared by convicted felons.

Both the Parkhill and Imonti suits seek “out of pocket expenses,” triple damages, punitive damages and legal fees.