Compulinx Screws Employees, Maybe Customers

Strictly speaking in terms of cash amounts, Terrence Chalk is a small time hood compared to Ken Lay and the way that Lay bilked investors of billions. But Lay was more of a ceremonial captain of the Sinking Ship Enron compared to Terrence Chalk’s Compulinx.

It could at least be argued that Lay was trying hard and made some stupid mistakes, or did not know the extent of the fraud going on at his company. The same could not be said for Terrence Chalk.

If Ken Lay was the captain of a sinking ship, Terrence Chalk was a crazed kamikaze corporate bomber, who took out his company, his employees, and his employees’ credit ratings with him when he went down. And as it turns out, he was ripping off his customers all along with phony claims of managed services.

The end of Compulinx came when Terrence Chalk was caught stealing the identities of current and former employees. He would take the socials and dates of birth from job applications and use the information to open up bogus lines of credit. He racked up over a hundred thousand dollars in bogus debt to finance his lifestyle. There are rumors that the identities of customers and business partners may have also been compromised. Now Terrence faces 1.65 centuries in jail if he is convicted.

From VarBusiness here:

One day after the arraignment of its CEO on identity theft and fraud charges, work at MSP firm Compulinx has come to a sudden halt, and Terrence Chalk’s claims of a robust business with an international client?le and a growing bottom line are looking more and more like smoke and mirrors.

Former business associates of Chalk say claims that Compulinx had hundreds of customers with data hosted on a massive IT infrastructure of 300 servers and 40 TB of storage in four data centers is nothing more than urban legend.

“[Chalk] got very politically connected, and he made a lot of promises that resulted in an image that he walked on water. But the bottom line is, he had one cabinet in our facility, that was it,” says Christopher Furey, CEO of Savvy Networks in Tarrytown, N.Y. “The other three data centers don’t exist.”

As for claims that Compulinx employed some 50 people, Furey, who has hired some former workers from his White Plains, N.Y., competitor, calls that claim “patently ridiculous.”

“There’s about six people left working there [at Compulinx],” Furey says.

Federal law enforcement officials Tuesday raided the White Plains, N.Y., home of Chalk, Compulinx’s CEO, and arrested the well-known Westchester County businessman with charges of stealing the identities of his employees in order to secure fraudulent loans, lines of credit and credit cards. Chalk, 44, was arraigned in federal court Wednesday along with his nephew, Damon T. Chalk, 35, on charges related to submitting some $1 million worth of credit applications using the names and personal information — names, addresses and social-security numbers — of Compulinx employees.

Since the arraignment, the Compulinx Web site has gone dark and phones at the White Plains company have gone unanswered. Numerous messages left on the Compulinx Services Center voicemail have not been returned.

In addition to the identity theft charges, Chalk is also charged with racking up more than $100,000 in unauthorized credit-card charges. If convicted, he faces 165 years in prison and $5.5 million in fines, prosecutors say. His nephew faces a maximum sentence of 35 years imprisonment and $1.25 million in fines.

Crash and burn. And set the town on fire.