I-Team: Deadbeats Owe State More Than $100M - 8 News NOW

I-Team: Deadbeats Owe State More Than $100M

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Nevada Controller Kim Wallin Nevada Controller Kim Wallin
An employee in the state controller's office. An employee in the state controller's office.
The controller's office is housed beneath the Nevada Capitol. The controller's office is housed beneath the Nevada Capitol.

CARSON CITY, Nev. -- There was a time not that long ago, when burly men with bent noses would be dispatched to collect unpaid debts in Nevada.

Nevada does have a designated shylock, someone assigned to bend a few arms and bring back the dough form deadbeats.

State Controller Kim Wallin has done an amazing job in going after money owed to the state, but she's run into roadblocks, not only from debtors who don't want to pay, but from other government agencies.

This small Gas n' Grab store in Carson City, Nev., doesn't look like it would be one of the top deadbeat businesses in the state, but it is. For years, it has been able to avoid paying the $1.6 million it owes.

In 2007, just before Wallin took over the controller's office, the state's pile of uncollected debt was about $10 million.

Today, she said, "Our portfolio is up over $100 million."

What that means is that Wallin and her very small staff have combed state government and coaxed other agencies into turning over uncollected debts so someone in the state could go after them. Wallin has had to twist a few arms.

"Calling the agencies, saying, ‘Come meet with the controller. Why aren't we getting the debts?'"

The debts include fines, assessment and unpaid taxes. The Carson City gas station owes because the state had to clean up a massive fuel spill. A couple of hotels owe small amounts that might have been overlooked. Big O Tires stores owe more than $150,000.

A venerable bar and restaurant owes more than $1 million. The University of Nevada, Las Vegas police owe a little under $800.

Then there's a parade of colorful characters: Indicted attorney Barry Levinson owes a pile; admitted con man Elvis Nargi; still doing business in California, owes close to $300,000; Michael Jackson's doctor, Conrad Murray; Leon Benzer, a central figure in the homeowners associations scandal; surgeon Dr. Mark Kabins, who took a plea in the medical mafia case; and ABC News.

In cramped windowless offices below the Nevada Capitol, Wallin's small team of bureaucratic loan sharks works the phones and their computers to coax deadbeats into paying what they owe.

"You have no idea how it feels," a worker said. "It's kind of fun. … Oh, the stories we hear."

Find out if your name is on the list of deadbeats who owe the state

The state staff is supplemented by five private collection agencies, which keep a percentage of whatever they bring in. Prior to Wallin's election, the state collected a paltry 11 percent of what it was owed. That jumped to 28 percent, in part because Wallin pushed for a bill in the Legislature to force other state agencies to turn over their uncollected debts so her people could go after them.

Most agencies, such as the Department of Motor Vehicles, have complied. The glaring exception is the Department of Taxation, which has up to 60,000 files on businesses and individuals who owe taxes but haven't paid -- everything from mining giants to Wal-Mart. The total owed the state in unpaid taxes is well over $200 million.

"They are one of the only agencies that has been the most reluctant to comply," she said.

When asked why, Wallin said, "That is what we are trying to find out."

Instead of helping the controller to go after deadbeats, the governor and Legislature cut her already meager staff by one position, eliminating the assistant controller -- the person who was in charge of debt collection. That cut saved pennies, but lost dollars.

"Our collections -- we were at 28 percent, and now we are down to 14 percent," Wallin said. "I estimate we probably lost at least $2.7 million in collections.

"That $100 million we have there, we could do an awful lot with that money. … If everybody paid their fair share, then we wouldn't have to raise taxes on people."

Read SB56  and SB21

Wallin is once again looking for help at the Legislature. She'd like to have legal help so she can file liens against those who won't pay.

Wallin argues that every dollar that gets put into debt collection pays for itself many times over, though lawmakers haven't been willing to come up with more money for her office.

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