Payroll firm's clients get good news from insurance company

Scores of small businesses burned in a payroll-tax scam got some welcome news late last week when an insurance company said it would cover $3 million of their total losses. “We won’t get all

of our money back, but at least it looks like we will get a good chunk,” said Melissa Meltzer, who with her husband, Robert, owns a Los Angeles children’s fitness franchise that lost about

$55,000. The Meltzers are among about 150 mostly Southern California restaurateurs, dentists, hairstylists and others who learned around Christmas that money they had deposited with LA

Payroll for state and federal taxes had disappeared — as had the company’s owner, Tovmas Grigoryan. Businesses found out about the lost money after a flurry of late notices from the Internal

Revenue Service and the state Employment Development Department after third- and fourth-quarter taxes went unpaid. Individual losses ranged from hundreds of dollars to more than $350,000,

plus penalties and interest, according to police reports, court records and interviews. Former employees of LA Payroll — a privately held company whose only office, on Wilshire Boulevard, is

now closed — estimated that losses totaled $4 million. They said Grigoryan, 56, told them he was headed to Palm Springs for the holidays and never returned. Two of Grigoryan’s relatives

told The Times last month that they knew nothing about the missing money but that he had left the country for Armenia or Russia. He could not be reached for comment. Many of the business

owners held out little hope of recovering any money after filing complaints with the police, the IRS and the FBI, as well as claims with Philadelphia Indemnity Insurance Co., which had

issued LA Payroll a $3-million “professional liability” policy. Los Angeles police referred the case to the FBI, which has opened an investigation, according to a letter from an LAPD

detective to one of the business owners. The FBI will neither confirm nor deny if it is investigating, a spokeswoman said. Late last week, however, lawyers for the insurance company notified

93 businesses that had filed claims that it would ask a federal court in Los Angeles to divide the $3 million in policy proceeds among them and any others that come forward. Claims total

$2.9 million so far, according to the lawyers’ March 14 letter, but could rise if other losses are documented. If claims grow, the payouts will shrink accordingly, on a pro-rata basis. For

example, the lawyers noted, if $4 million is claimed and $3 million is available, the insurance company will recommend that claimants be paid 75% of their tax delinquencies and assessed

interest. But they stressed that it would be up to the court to decide who gets how much. “Philadelphia will not propose that claimants receive any additional amounts, whether it be fines,

penalties, costs or attorneys’ fees or in any other forms,” the letter said. Babak Dardashti, a Los Angeles dentist who lost about $20,000, said Monday he was cautiously optimistic about

recovering a significant portion of it through the court. But he said he would believe it when he sees it. “This is some good news,” he said. “But we are still holding our breath a little

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