Asch '79 withheld business past

by Greg Berger | 3/8/10 11:00pm

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03.09.10.news.asch
by Zach Ingbretsen and Zach Ingbretsen / The Dartmouth

In previous interviews with The Dartmouth, Asch has stated that he founded a paramedical products firm based in Europe that manufactured and sold internationally medical supplies of Asch's own design, but declined to disclose the name of the company. Legal documents recently obtained by The Dartmouth, however, tie Asch to Arand Ltd. and, later, Ballet Technologies, two paramedical supply companies specializing in electrolysis needles.

In an interview on Monday, Asch said that he did not share the name of his company because he did not want industry outsiders to know how profitable the industry is.

"I don't spread it around because it would be attractive to other people to join in that industry, if they knew how successful it was," Asch said.

A French court document obtained by The Dartmouth that links Asch to Arand reveals that in 2004, Arand was investigated for "une fraude fiscale," a French legal term that translates as fiscal or tax fraud. Asch confirmed on Monday that he was once associated with Arand.

In 2004, Arand was brought to court for legal issues concerning the company's failure to pay taxes. An appeal of the case in 2005 rose to the French Court of Cassation, the highest French appellate court that rules on civil and criminal matters.

On April 20, 2005, the French Court of Cassation dismissed an appeal by Arand, which sought to reverse a lower court ruling "authorizing the tax administration to carry out operations to search for and seize documents, in search of proof of fiscal fraud," according to an English translation of the court documents that were originally printed in French.

In its appeal, Arand claimed that the French tax administration unlawfully obtained documents from a private apartment that were later used to charge Arand with tax evasion in a May 12, 2004 lower court decision, according to the document.

The court document details how an apartment occupied by "Joseph X" and his wife was used by Arand to conduct company business including telephone calls, mailings and "trading activities" without being properly registered with the French government.

"The corporation Arand Ltd. is not known to the Tax Center at 16 Porte Dauphine, of competent jurisdiction, to perform commercial activity at the address," according to the translated documents of the decision. "There exists the presumption that the corporation Arand Ltd. performs a commercial activity in France out of the offices occupied by Joseph X and/or his wife which constitutes a taxable activity under the tax on corporations, without submitting tax and communication statements, and as such may not have satisfied best practices in its accounting statements."

Asch, on Monday, said the tax dispute was "settled amicably."

Asch added that the 2004 case was in reference to shipping sales Arand made to Italy and Spain from France in which the company should have been paying a value added tax. Arand eventually paid the proper amount of tax, which Asch said was approximately $8,000. Half of the sum was covered by the company's French manufacturers, because Asch said they were partially at fault.

This tax issue was more a "question of jurisdiction," he said, since Arand had already paid the proper tax amount in the United States, although it should have been paid it in France. Asch added that the proper taxes were then paid in France and the company was given a credit for the equivalent amount from the U.S. government.

The taxes were paid late with "no penalties and no interest," he said.

According to Asch, the French tax authorities asked to obtain documents from his private residence in France, and he complied with the requests.

"This wasn't an adversarial situation, this wasn't an us against them,'" Asch said in the interview on Monday. "We gave them their documents after the 12th of May [2004],"

Asch and his family moved to the United States in 2004, after living in Paris since 1986 and summering in Hanover in the early 1990s, Asch wrote in a letter posted on his campaign web site.

When shown the French Court of Cassation document, Asch repeatedly said that he had "never seen this document before," adding that he believed it to be an "internal" French government document.

Arand Ltd. was founded in 1988 in the Channel Islands, a British protectorate off the coast of France, according to the company's certificate of incorporation in the Channel Islands.

"It was a tax jurisdiction that was very good for international trade, we sell our needles in about 30 different countries and it made sense to be there," Asch said, adding that the arrangement was an "absolutely standard legal affiliation."

In 2004, Ballet Technologies was founded and received all of the trademark information originally filed by Arand Ltd. Asch is a current director of Ballet Technologies Limited, according to a June 2009 annual filing with the U.K. Companies House, a British government corporation registry.

Asch declined to comment on the nature of his involvement with Ballet Technologies in the Monday interview because he "did not think it was relevant to the campaign."

The current Ballet needles web site lists as its distributor in France a company whose address is in the U.K. The distributors that carry Ballet needles are typically based in the countries they service, according to the web site.

In earlier years, a smaller French company was listed as the French distributor. Although the needles are manufactured in France, by selling them from outside of the country, the company avoids value added taxes, Asch said.

"At one point we had a small company [in France], but we decided to fold that up after we had the complications with the French tax authorities," Asch said. "Our lawyers said it would be a lot easier and cleaner to do that."

Both Replogle and Morton Kondracke '60, an Alumni Council-nominated candidate running unopposed for the other open Trustee position, have previously fully disclosed their professional affiliations since they graduated from the College.

After his time at Dartmouth, Replogle worked at Boston Consulting Group followed by a few years with Associated Project Control, a company involved in the construction of retail stores, Replogle said.

Replogle then returned to Boston Consulting Group after graduating from Harvard Business School, after which time he held several posts ranging from head of sales to managing director of Guinness Bass Import Company, Replogle said.

Currently, Replogle serves as the chief executive officer of the global personal care company Burt's Bees, a position he assumed in 2006 after serving as the general manager for Unilever's North American skin care division. Replogle also served on the Boards of Ravens Cross School, Habitat for Humanity and Terracycle.

Following a three year stint in the U.S. Army after Dartmouth, Kondracke has since worked at several newspapers, magazines, television shows and other media outlets as a journalist. Kondracke is now the executive editor of Roll Call, a Washington, D.C. newspaper.

In a letter posted on Asch's campaign web site in support of his candidacy, Brice Acree '09 cited Asch's business experience as an attribute in a time when the College is facing major budget cuts.

"Joe has a professional rsum packed with business experience and financial gravitas that our trustees need particularly during a time of economic crisis to help us navigate these hazardous waters," Acree wrote.

A letter from three trustees who were former petition candidates for the Board T.J. Rogers '70, Peter Robinson '79 and Stephen Smith '88 contrasts Asch's experience as an entrepreneur with the business backgrounds of many current trustees.

"The Board, in our opinion, has plenty of investment bankers and financiers," the letter stated. "Joe is an entrepreneur who built an international medical products company from scratch."

Voting for the Board of Trustee elections begins March 10.

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