I worked for Source XII during the summer and fall of 2007. Here's how it works: Atlas Ventures was the "parent company, " and all other companies controlled by Wade were subsidiaries. For example, under Atlas Ventures there were businesses such as Independent Student Media, Inc. (that's the film/movie company referred to in an earlier post), Atlas Capital (the investment wing), Atlas Marketing (the sales wing), etc.
Source XII, from what I understood, was the accounting wing of all these businesses EXCEPT Atlas Marketing, which had its own controller and accounting department. There were about 5 people in Source XII who handled the accounting for the various entities. Not all entities that we did the accounting for were subsidiaries of Atlas Ventures, but some were. I never really saw or experienced anything that was questionable, as I didn't have any interaction with the sales reps. So anything relating to Atlas Marketing I wasn't really familiar with. In late Fall 2007, I started to realize that the whole infrastructure was going to collapse because of cash flow problems. That was when I really started to see some of the questionable behavior appear. A week or so before we normally ran payroll for some of the employees, the CFO printed and cashed his paycheck. The same thing happened the next pay period, just before the CFO took his family to Hawaii. That was when everything seemed to come to a stop.
I hadn't been paid for two pay cycles, and when I returned to work on a Monday, the office was completely empty...no computers, no desks, and all the doors to the main part of the office building were locked with the lights off. It was like the company literally moved everything overnight. Luckily I had the phone number for one of the employees who told me that everything had moved to South Provo. I finally found where the new location was, and went and demanded my own paycheck (this is after the first one they had given me bounced). Naturally, I wanted nothing more to do with the company because I didn't believe they could continue to make payroll, so I quit.
The interesting thing about all this is that before the CFO went on vacation to Hawaii, he asked me to pay a bill in the amount of $96, 000. When I looked at the bill, it was for a suite in the Energy Solutions Arena in SLC. Knowing that many employees hadn't been paid yet, I refused to pay the bill (I hadn't even been paid yet...there was no way I was going to buy box seats for Wade and his buddies without my paycheck first).
In addition to all that, the last week I worked there I remember going through the mail as the CFO had asked me to; as I did so, I opened up letter after letter from the IRS stating that they would start seizing assets if Atlas Ventures didn't pay its taxes. As I was in the accounting department, I started to look into this on my own time, and realized that we were VERY behind in tax payments. The interesting thing is that it didn't seem to bother the CFO or anybody else.
The last thing that really bothered me is that about a week before I quit, we had a meeting about obtaining financing for Independent Student Media, Inc. (a.k.a. ISM), as Atlas Ventures could no longer support it with its capital needs. I was directly over the books for ISM, and the CFO was my supervisor. We had been working on updating the accounts and ensuring that each transaction was properly accounted for. The day that the CFO and President of ISM went to go visit various banks to obtain financing, I opened the books and noticed that a number of large transactions were moved from the expense and liability accounts to either the income or equity accounts. It really bothered me because I wasn't sure if they (the CFO and President) would be able to secure a credit line given that they had changed some of the accounting records. They obviously did what they did because up to that point, ISM had yet to post a profit, and no bank is going to give lending to a company with lots of debt and no profit. To this day, I'm not sure if they ever obtained financing from a bank or not, but I hope they didn't. I'm mad that I wasn't allowed to go with them to the banks because I believe they were dishonest in their financial representation of ISM.
In conclusion, I can't say that I really saw anything against the law (except for the tax delinquency and changing of the accounting records), but there were certainly behaviors I found a little unethical and questionable. My only regret is that I didn't get out sooner.
