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3 On Your Side

Valley business closes leaving dozens of employees unpaid

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A lawyer for the now defunct company said the IRS seized money intended for the payroll before employees cashed their checks. (Source: 3TV) A lawyer for the now defunct company said the IRS seized money intended for the payroll before employees cashed their checks. (Source: 3TV)
(3 ON YOUR SIDE) -

Some employees of a Valley business called Artisan Natural Stone Products say they're owed thousands of dollars and without that money they can't pay their mortgages or any of their bills.

"We’re all stressed out, talking about them not paying us," one man said. 

Their bond is strong, but for these co-workers, their finances are shaky. 

"I’m frustrated," Francisco Ortiz said. "I mean I don't got no money right now; my tags [on my truck] are expired."

Ortiz says he's broke, and he's certainly not alone.

"We’re behind on bills," Jesus Quintanilla explained said. "We have families. We don't have other income coming in." 

These men represent just a small portion of the more than three dozen employees who worked at Artisan Natural Stone Products, a kitchen and bathroom remodeling business that claims it can't pay its employees. 

"We went to work and were told that same day the business was going out of business that we could given them a few more days of work to finish the jobs out, and we agreed to that," Quintanilla explained

But after agreeing to finish certain projects, these employees said their paychecks bounced -- if they got a paycheck at all. 

"We were promised money," Quintanilla said. "Nobody got cashed out; we all received checks that bounced."

Some of the men never received checks at all.

Quintanilla says he is owed nearly $3,000.

"I could lose my apartment," he said. "I have no money for food. Income wise, I’m pretty much going to be thrown on the streets. If I don't receive this money, I’m done."

3 On Your Side got involved and accompanied the men to the Arizona Industrial Commission, also known as the labor board. There the men filed complaints, the first step they hope in eventually getting paid. 

But what about the company they worked for? What happened to it?

Gary Harper went to Artisan Natural Stone Products. According to a document taped to the front door, not only has it not been paying its employees, it has not been paying rest either.

Doors to the front of the business were locked with a big note from the building's owner claiming he took over the premises for non-payment of rent. 

In an email to 3 On Your Side, the landlord says he even filed a complaint in Superior Court in effort to make Artisan Natural Stone Products come up with their money. 

Based on what 3 On Your Side found, that may be a long shot. 

The Internal Revenue Service filed a lien for nearly $30,000 against Artisan Natural Stone. 

An attorney representing the defunct business sent an email to 3 On Your Side that reads in part, "Unfortunately, before Artisan employees had the opportunity to cash their checks, the IRS took those funds."

But these employees say they don't know what to believe anymore. All they know is that shed their sweat for Artisan Natural Stone and in the end, they got the shaft. 

"I want to put them on blast for what they did because what they did to us wasn't right," Ortiz said.

But it's not over yet because 3 On Your Side received an email from the attorney representing the company.  In that email, he said Artisan natural stone is trying to get those employees paid

Two full statements from Artisan Natural Stone Products, LLP are below.

"Regrettably, Artisan Natural Stone Products, LLP, like numerous other construction related businesses in the Valley, was unable to meet financial obligations necessary to continue in business. Over the past few months effort was made to reduce expenses and restructure operations to continue in business but those efforts proved unsuccessful.

"Pains were taken to protect the final paychecks of Artisan employees. A new bank account was established for the sole purpose of making the last payroll. At the time the final paychecks were issued, those funds were on deposit in that payroll account. Unfortunately, before Artisan employees had the opportunity to cash their checks, the IRS took those funds. Clearly, Artisan did not intentionally issue bad payroll checks, as indicated by the new account for the purpose of final payroll. But no company action, however well intended, trumps the powers of the IRS.

"Artisan appreciates the efforts of all its employees and deeply regrets that the company could find no way to continue to operate in the face of multi-million dollar losses. As the company finalizes closing of the business every effort will be made to satisfy the payroll obligations. While these circumstances are most unfortunate, they were not deliberate and reflect the extreme difficulties small businesses face in trying to survive the peaks and valleys of the Phoenix metro construction market.

"July 30, 2015.

"Artisan is represented by Brad Owens of Owens and Pyper, PLC."

An updated statement was emailed to 3 On Your Side on 8/4/15.

"Be advised that the bank account established for the purpose of final payroll is now depleted of funds and therefore closed by the bank. Several employees were able to cash their pay checks (sic) as a very limited amount remained in the account from what the IRS took.

"Your information that some employees were not paid is not exactly correct, Mr. Trent. Final checks were prepared for all employees but before the checks could be completely distributed, the IRS had taken the funds. There was no intent not to distribute all checks, but once the funds were not in the account, Artisan could not legally finish giving out the pay checks (sic). In addition, some employees elected not to cash their checks so that other people might be able to cash theirs.

"Again, it is understandable that people are upset, but at the time the checks were written, Artisan had no knowledge of IRS intent to take the final payroll monies. Every effort is being made to collect funds for the employees whose checks were not honored by the bank. However, please understand that once the doors have closed it is certainly no longer business as usual. Artisan is doing its best under these circumstances. If additional information is available, you will receive an email update.

"Artisan is represented by Brad Owens of Owens and Pyper, PLC."

Copyright 2015 3TV (KPHO Broadcasting Corporation). All rights reserved.

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