When I first started writing this journal it was February 1st, which made me recall that Patti and I formed Pittstown Pool Service on February 1st, 2020. I never imagined starting this type of business, but a series of events would lead to this decision.
In September of 2019 I was managing businesses that sold seniors diabetic testing supplies (DTS) and medications. The businesses were under investigation by the government for over 2 years. Later that month my attorneys received word from a prosecutor that they planned to move forward with an indictment. I drove up to Boston early in the week to meet with my attorneys, then returned home and gave my wife,Patti, a very emotional heads-up on the morning of September 26. Then sure enough later in the morning on September 26th I was indicted for conspiracy to commit healthcare fraud. Four of my co-workers were also indicted. The prosecutor planned on sending marshals to our houses in NJ, PA, MI and FL for a difficult trip in custody to Detroit, but she agreed to let us travel on our own to Detroit, which is typical for white collar crimes. I met with a new local Detroit attorney via phone and went over how my trip would go. I would get processed (arrested) with fingerprints, mug shot, drug test, turn in passport, etc…. Then I would get arraigned where I would plead not guilty, sign for a bond, meet with a pretrial officer and leave. So I booked tickets to fly to Detroit on September 30th. Patti drove me to Newark airport in the afternoon and it was an emotional ride and goodbye.
On the morning of October 1, 2019 I met with my new attorney in person. Of course they have a suite in a nice building in downtown Detroit near the GM complex with beautiful views of the river. Then we walked a few blocks to the federal courthouse. I wait, then get processed, then wait for my arraignment. At the arraignment I plead not guilty. Then the government speaks and talks about how terrible I am and how terribly I operated the business and requests I stop doing business with the government immediately and that I ask permission to leave New Jersey. These were complete curve balls that my new attorney failed to mention were possibilities. So I quickly tried to explain to my attorney that I just can’t stop shipping DTS and medications. It could cause harm to our patients if they ran out of these critical supplies. There was discussion about the percent of our business that deals with the government, which my attorney misstated. When I tried to correct him, the judge was very rude and suggested that only my attorney talk. I also mention we had around 100 employees at the time and needed to provide them with notice and needed their assistance to wind down the business. We also requested I simply notify them if I plan to leave NJ explaining whatever concerns they had were wrong. Eventually the judge agreed to let us do business with the government for 30 days to help with a transition for our customers to a new supplier. (85% of our business was related to Medicare, so obviously we could not run the business after this time.) He also allowed me to provide notice when leaving NJ, instead of requiring permission which is a huge hassle. Also, I’m allowed to communicate regarding only work related things with my co-workers who were also indicted. (Typically I’m not allowed to speak with co-conspirators.) Then I signed electronically for an unsecured $10k bond and left the arraignment. Finally I met with a pretrial officer to go over their processes. I needed to check in once a month, have a home inspection, provide notice via email when leaving NJ, and not leave the continental US, along with some other conditions.Patti got a call from the pretrial officer that afternoon to confirm all the facts I had given her about Patti, our house, our cars and our childrens’ names and ages. Before I head out on my flight back home after this process I was notified that mine and Patti’s joint personal checking account had been seized. I was not warned of this type of seizure by my attorneys, so this threw us off. We had business bank seizures at the start of the investigation back in 2017, but now this was hitting home. I was now worried about our savings accounts, my retirement accounts, our house and cars. I make it back to Newark airport, hug Patti and tell her I am going to drive. I proceeded to tell her how our personal bank account was seized and then the rest of the ride home is a blur. I didn’t sleep much that night.
The next day is my son Gabriel’s birthday, so Patti and I and the two youngest children go to Kalahari waterpark in the Poconos to celebrate his 13th birthday. We planned the trip after the indictment happened and figured it was a distraction to take our minds off of things; however, my mind is all over the place. I check in with our CFO and he says all our business bank accounts are frozen. So now I have yet another task of finding a new bank to open new accounts to put our inbound money into so we can attempt to make payroll and pay our expenses. Payroll is that week and we can’t cover it. It is paid about a week late to around 100 employees and we continue to cover all remaining payrolls. Over the next several days our personal checks bounced, including one for our daughter’s braces, checks to our church and checks for home expenses. Upon my return home, I scheduled a conference call for October 4th with all our employees in all locations. I alert them that I’m being forced to close down the business. I am working on getting money to fund payroll and explain I’m sorry I failed them. The call is so emotional for me, that I’m unable to speak at times. Afterwards several employees told me they heard the pain in my voice. That was the toughest call of my professional career. How do you just lay off so many employees with little to no notice? I heard later that many lower level employees just walked out of work after that call; however, our management team and supervisors were so supportive. They had been dealing with the investigation for over two years. They all stayed because they saw how we did things and trusted me. Some teams like sales, I had to lay off immediately. Other teams needed to help wind down the business and these employees stuck it out, even though they knew the ending. One of the last people to leave was our human resources (HR) manager. She was an employee who started as a supervisor in an operations team when I met her as a result of a merger. I promoted her to HR assistant and then eventually to HR manager. I had faith in her and it was mutual. She currently is the HR manager at a large college in Miami with lots of responsibility and is currently enrolled in a masters program. She still stays in touch with Patti and I and continues to be supportive to us.
On October 5th Patti and I met with our 5 children in person(Fiona, Gabriel and Charlotte) and over FaceTime (Kelsy in Florida and Connor at NJIT) to explain that I was indicted, and had traveled to Detroit and was arrested and released. I said there was a possibility I will go to prison and that my attorneys said the trial will likely be in approximately one year. It’s an emotional conversation. All the girls cried and so did I (the boys cried too). Over the next few days, I learned that my IRA had been seized.
So despite the stress of the indictment, I work hard to come up with an exit plan and start executing. We found yet another bank to open up business and personal accounts. I fly to Miami (our main office), Detroit (our biggest pharmacy) and have many other calls where I meet with the employees and have difficult conversations on plans to close most offices. Due to the criminal indictment it is almost impossible to sell the business. I manage to sell off some parts of the business for a fraction of their market value. In Miami we had just downsized and moved into a smaller office earlier that year with a 5 year lease. We coordinated vacating the building by the end of October and paid rent up until then. All other locations were small buildings with month to month leases, which made things easier. We alerted our customers and helped them find another supplier/pharmacy for those businesses we needed to close. Some vendors managed to get paid and others didn’t. Luckily there were no seizures of our house or children’s college accounts, because we didn’t contribute funds to those assets during my employment with these businesses. Also they didn’t seize any cars, likely because we don’t drive anything extravagant. I had received a bank check from our personal brokerage account, but later learned the check was canceled and the account balance was garnished. Then I discovered we had to pay taxes on the profits from the brokerage account, even though the money was taken. The business collected account receivables money in a later tax year but we could not offset the profits with the huge losses in the previous years thanks to NJ tax laws. The result was a large tax liability for Patti and I to NJ and the IRS for these two items. To cover these I closed an IRA that I still had, got hit with the 10% penalty and used the rest of those funds to cover the tax liability. What sucks is that 90% of the source of funds in my main IRA account that was seized came from my previous career income. So as of today I have no retirement savings and will be required to pay the government 10% of my earnings the rest of my life for up to 20 years. I’m also told they will require my wife Patti to pay 10% of her earnings as well, since her earnings benefit me.
In November I spent more time with the family on a vacation to Hawaii. I had booked the trip in July when I saw the tickets via United points for half price – about $450/ticket. I asked for the judge to approve the travel that was already booked well in advance of the indictment. Luckily he approved and so Patti and our three younger children had a nice vacation in Oahu. They still talk about wanting to go back to this day and the two older children who were in college at the time are still upset I left them behind. I continued to wind down the business in November and December and enjoyed the holidays with my family. After the holidays I started thinking about how I could support our family. A white collar job is definitely out of the equation, given my indictment. Our daughter Kelsy had an issue with her car which I normally fixed and maintained for her. She was down in Tampa, so I couldn’t help. She found a mobile auto mechanic who showed up in a sedan with the parts and tools and replaced her starter in her apartment parking lot. I thought that was a cool concept with very little overhead and realized I could do that. I am also handy around the house and considered a handyman business.
Then I thought about a pool service business. About 9 years prior, we had our inground pool built, but we did a lot of the work beyond the pool shell ourselves. The money from the pool came from savings from my previous career as a software sales engineer. We installed the fence, all of the electric, the heater, salt chlorine generator, waterfall pump, springboard, coping, boulder walls and dry laid travertine decking. I also learned how to measure and install a custom freeform safety cover and close the pool. I researched our local pool service companies and realized this had potential. So I find there is a trade show in Atlantic City later in January with all sorts of training. I attend a 3.5 day course and become a certified service technician (CST.) I asked lots of questions to my peers and the instructor and got vendor referrals. After my exam, I walk the show floor and meet with various vendors. I found a vendor that is known to be easy to work with and great service that sells practically everything – chemicals, pools kits, tools, equipment, liners, covers, tile, etc.. Then I meet with a safety cover vendor that is also easy to work with, provides referrals and prefers to work with small businesses. I learned that inground liner pools are popular (I hadn’t realized how popular they were in our area) so I met with a local family run business who eventually helps me tremendously by teaching me a bunch. I’ve been to big medical trade shows, which are typically a waste of time for me, but this show is perfect to learn the pool business and establish the necessary relationships.
When I arrive home, I work on setting up the businesses. I want to form the company name Pittstown Pool Service and discover it is available. There was a similar business, Pittstown Pools, that previously operated in our area, but closed a few years prior. I purchased the internet domains and formed Pittstown Pool Service LLC and Pittstown Auto Service LLC effective February 1, 2020. I register the federal tax numbers, NJ resale tax certificates then line up general liability insurance and apply for the NJ Home Improvement Contractor registration. I research the competitors and establish pricing, learn WordPress and design and publish the websites and emails at very affordable pricing on a hosting service. Then I signed up for free Google Voice accounts. I found a free accounting and billing service and set that up. Then I learn Facebook, create those business sites and then create and start ads for the auto business that pop-up on the Facebook website and mobile app news feed to local users in our area. I also advertise on Craig’s list.
In early February I started performing maintenance on various cars from old Subaru’s and GMs to newer Hondas, Porsches, Mercedes and BMWs. I’m having to watch YouTube videos to estimate the amount of time, price out parts and perform the work in cold weather in the customer’s driveways for maintenance on timing belts, brakes, exhaust, fluid changes, suspension, steering, axles, heater cores, ignition, etc… It was tough work, but I was excited I started something from scratch that could work with basically no overhead. In March I attended an open house for inground liners and learned a bunch in that area. The payroll companies like ADP and Paychex are pretty costly for a very small business, so I added a very affordable payroll service through our accounting software. Payroll is complex to set up with the taxes and software, which is another reason most companies just outsource it. I learned from the inground liner vendor that hang tags are one way to advertise. So I design and order a bunch of hang tags (actually way too many). Then have my kids drive around and put tags on the mailboxes for houses that have inground pools on Google Maps. I also do a little advertising on Facebook and Craig’s List and stop advertising for the auto business. During this timeframe Covid is ramping up and there is a large demand for pool openings on pools that haven’t been open in years, pool renovations with liner replacements and new above ground pool installations.
Starting in April, Patti and I replace our first couple of above ground pool liners and then get referrals from those jobs and positive reviews which causes the business to take off. That season we opened pools (some were ponds and after tons of work we got them crystal clear) replaced above ground and inground liners, repaired and replaced pool equipment, built above ground pools, found and repaired leaks, repaired tile and coping, replaced all different types of pool covers and closed pools. We were very busy and hired extra help outside our family to assist starting in 2021. I performed some additional auto work, but then wind that business down, since the pool business was much more successful. Our pool business doesn’t make much money the first year as expected, but it did cover our household expenses. Then each additional season it grows based on referrals. We haven’t advertised since the little bit we did in 2020, but did send out an email to our customers over the winter of 2022 recommending upgrades to salt, since the chlorine tablets cost was still very high at that point. Replacing liners and upgrading customers to salt are very rewarding, since they are always so happy with the results. Our biggest challenge the past few seasons is hiring and training reliable employees. Most of my time each March is spent recruiting new employees. Unfortunately with this seasonal business, employees find winter work and often don’t return in the spring. So each year the business has grown significantly (40%-50% each year) and we finished the 2023 season closing 240 pools. Apparently some of our competitors have numbers like this, which makes us proud. We managed to save enough money for Patti and our family to manage while I’m away and not operating the business for two seasons.
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