More than two and a half years after the state Attorney General filed wage-theft and tax-evasion charges against former West Seattle Athletic Club owner Sam Adams, a plea agreement (see the documents here and here) has just been announced. Here’s the news release from the AG’s Office:
Attorney General Bob Ferguson announced today that former employees of West Seattle Athletic Club will receive restitution from their former employer’s company following Ferguson’s criminal wage theft case.
“Wage theft is a crime and I will not stand for violators who cheat working families out of their hard-earned wages,” Ferguson said. “I am pleased that Mr. Adams’ company was held accountable and my office has been successful in obtaining restitution for these workers.”
Hollystone Holdings, Inc., a company owned by former West Seattle Athletic Club owner Sam Adams, pleaded guilty to criminal wage theft in King County Superior Court. Pursuant to the agreement, the company will pay restitution in an amount that will equal the total amount owed to former employees who were never compensated for their back wages. While the exact amount is not yet known, it is expected to be in the thousands of dollars.
If the conditions of the agreement are not met, the state reserves the right to re-file charges against Sam Adams.
How to file wage theft violations with the state Department of Labor & Industries
If you believe you are a victim of wage theft, immediately file a complaint with the Department of Labor & Industries (L&I). Preserve any documentation regarding the amount of wages you believe you are owed.
Workers can file a wage complaint if a business does not pay them. Workers can also file a complaint if the business denies other workplace rights regulated by L&I, such as meal and rest breaks, overtime, and family care.
Individuals can download a Worker Rights Complaint form or get one from their nearest L&I office. The completed form should be mailed or delivered to the nearest L&I office. Find out more about how to file a worker rights complaint here.
Our report on the announcement of charges in February 2015 included an allegation that the case involved “$500,000 in unpaid taxes, withheld salary, and unpaid insurance premiums.” As we also noted at the time, this case involved former club owner Adams and a business partner, NOT the current ownership of the club at 2629 SW Andover, which was renamed West Seattle Health Club and has been owned/operated by the property owner since Adams relinquished it in fall 2014. Adams’ short-lived ownership followed a previous owner’s bankruptcy.
A spokesperson for Sam Adams sent this news release on his behalf:
The Washington State Attorney General’s Office today formally dropped all charges against former Seattle Seahawk, Sam Adams, after an extensive investigation and forensic audits proved Adams was a victim of financial fraud perpetrated by the billing company he had hired to provide services for the six athletic clubs in Washington and Oregon, which he jointly owned with his brother and wife.
“My wife Erika and I are relieved the truth has come out, and that our family can put this painful episode behind us,” Adams said. “Our lives have been on hold while this cloud hung over us.”
In February of 2015, Sam and a former employee were accused of several counts of wage theft as well as filing false/fraudulent tax returns. During the subsequent years, Sam has maintained his innocence, which today’s dismissal affirms.
“Today’s dismissal reflects the truth: Sam’s fitness clubs failed because they were being systematically cheated by their billing company,” said Adams’ attorney David Smith of Garvey Schubert Barer in Seattle. “No one on the government side took the steps needed to conduct a forensic audit, thus the obvious fraud by the billing company was not detected by government investigators,” Smith continued. “If the basic requirements of criminal investigation had been followed, Sam and his former business associate would never have been charged, employees would have received their final paychecks and Sam and his family would have been spared years of needless heartache and expense.”
Adams added, “As we have always known, none of the charges were true and we appreciated the AG’s office apologizing to me today in court. Erika and I are grateful to live in a country where the rule of law reigns and justice is ultimately served.”
The plea-agreement document, linked above and again here, says:
… Hollystone Holdings, Inc. agrees to enter a corporate Alford plea of guilty through its
counsel of record, David H. Smith, to one aggregate count of Theft in the First Degree, a class B felony. The parties agree that the maximum penalty for this offense is a $10,000 fine. At the time of the guilty plea, the State will move to dismiss without prejudice the charges included in the Second Amended Information under Cause Number 15-C-00888-5 SEA. This dismissal is contingent upon the fulfillment of this plea agreement with Hollystone Holdings, Inc. If said agreement is not fulfilled, the State reserves the right to refile the criminal charges in Cause Number 15-C-00888-5 SEA.