Francorp Trial Nears, IRS Closes in on Boroian

OLYMPIA FIELDS – Donald Boroian, founder of the Francorp International franchise development firm, is facing new challenges, not only fighting a lawsuit against him and a franchisor client, but also battling with the Internal Revenue Service on new federal tax liens on unpaid payroll taxes. This month the IRS posted to his account at Cook County Recorder of Deeds a $45,187 lien for 1040 US Individual Tax Returns for the period of December 31, 2008. The date of assessment was July 13, 2009, and the last day for re-filing was August 12. Last May, the county posted a demand for payment from the IRS on another lien for $939,623 for 1040 and 6672 payroll taxes for years 2006 and 2009. Cook County shows numerous other federal and state tax liens against Francorp and Boroian for years past.

Undisclosed sources have reported that many Francorp staff members, including seasoned management and attorneys, have left the firm amid much controversy and failure to receive paychecks owed by the company. One source stated that some have filed claims with the Illinois labor board in an effort to force Francorp to pay up.

But as the IRS closes in, Boroian is also busy preparing for trial in a lawsuit brought by five franchisees of South Beach Franchising, a company initially brought to Francorp by Carol (Myers) Brothers, long-time friend of Boroian, to begin its franchise program. The closely watched lawsuit accuses Boroian and his firm of the unauthorized practice of law in drafting and delivering disclosure documents to the client, although they were not admitted to practice law in that jurisdiction. The trial is now scheduled for October 5, 2009, in Florida. Robert Einhorn of Zarco Einhorn Salkowski & Brito, alleges that Boroian became Brothers’ joint venture partner and legal counsel in actively participating in a scheme to defraud her franchisees.

Recently, Judge William Thomas ruled on several motions filed by Einhorn, one allowing an April 13, 2005 email to be used in the case, despite Francorp asserting that it was under attorney-client privilege. The email was between the firm’s vice president and general counsel and its in-house counsel. He also ruled that Einhorn could take depositions on two other former attorneys who worked for Francorp for a short time after the lawsuit had been filed.

Boroian has been at the center of much controversy for the past three years. After serving a one year, one day sentence for tax evasion in 2006-2007, he once again took over the reins of his company, which he proclaims to be the leading franchise development firm in the world, now with offices in Malaysia, Argentina, Philippines and the Middle East.

--

Related Reading:

• South Beach case moves forward (Franchise Times Magazine: JuneJuly 2009)
• Practicing law alleged (Franchise Times Magazine: September, 2008)
• IRS Demands Near-$1 Million Payment from Francorp's Boroian
• Francorp Announces Layoffs after Missing Payroll on Friday
• Francorp Attorneys Walk Out over Illegal Practice of Law
• Franchisees Accuse Francorp of Unauthorized Practice of Law in Partnering with Client
• As Employees Jump Ship, Francorp Brings Out Big Gun