The ugly side of business reporting

Not sure whether to categorize this story, that I did for the Tampa Bay Business Journal in 1997, as business journalism or investigatory journalism. Maybe a little of both. I don’t recall very much about it, but I think what happened was this: The Business Journal did an annual Book of Lists, categorizing different businesses according to size. Fort example, ad agencies would be listed on the Ad Agency List page according to their size. I believe this business wanted to be listed in the Book of Lists, and submitted an application. But the numbers in the application resulted in the paper taking a closer look at the business, and this story resulted.

By Arthur Frederick
Staff Writer

A self-described sports promoter who served a federal prison sentence for tax fraud in Hawaii has established a number of businesses in Lakeland in ways that echo his days in the Aloha State.

Elijah Jackson Jr., a one-time Lakeland High School basketball star, was convicted in the late 1980s for trying to gain illicit refunds from the IRS.

He also illegally tried to sell several million dollars’ worth of stock in businesses he owned, an act that elicited fines and two cease-and-desist orders — including one issued this spring — from Hawaii’s Department of Commerce and Consumer Affairs.

Jackson closed his Hawaii business in 1995, and now operates several Lakeland-based businesses under the name JBS Inc. The businesses include JBS Management Corp., which allegedly provides everything from sports promotions to an escort service; and JBS-Jackson Real Estate Investment Trust, which claims to provide real estate investor services and property management services.

Efforts to reach Jackson were unsuccessful. Calls to his office were picked up by an answering machine.

Craig Nakamura, a prosecutor in the U.S. Attorney’s Office in Honolulu, said by telephone that he prosecuted Jackson in the late 1980s for illegally trying to obtain IRS tax refunds.

“We did prosecute him for a false refund tax scheme. He was filing requests with the IRS seeking bogus refunds for various corporations that he purportedly had some interest in,” Nakamura said. “We prosecuted him for that scheme to defraud the IRS and making false statements to IRS. He was convicted of that and sentenced to serve jail time.”

Nakamura said Jackson’s conviction was vacated because some jurors were apparently improperly selected by a magistrate rather than by a District Court judge. He said he recalled that the government did not re-prosecute the case because Jackson had already served most of his sentence anyway.

“He had already been in jail for three or four years,” Nakamura said.

Just what Elijah Jackson and his wife, Delesia, are actually engaged in is somewhat obscure, but they claim to be generating plenty of revenue.

In information provided to the Business Journal in hopes of being included in the newspaper’s list of the largest private Bay Area companies, the Jacksons said that revenues had climbed from $1.9 million in 1994 to $2.9 million in 1995 to a whopping $26.4 million in 1996.

In spite of the claimed revenues, Elijah Jackson said in financial papers that the company was not profitable, and was supporting itself on “internal funding.”

“JBS Incorporated has supported its operations primarily with internal funding,” Jackson said in a note to his 1996 income statement. Another statement, dated March 31, 1997, said dividends had been “actually paid for by … equity and debt infusion.”

“The payment of dividends during a time when the company is losing money was used to create losses for tax purposes and to satisfy shareholders,” the report said, using language that echoes his Hawaii IRS troubles.

Jackson’s business card claims the company is a booking agency for entertainment and sports promotions; an escort service; and that the company serves as “entertainment consultants.”

On an information sheet provided to the Business Journal, Jackson claimed to be engaged in “entertainment and sports promotions, contractual services, real estate (investments), diversified related services, syndication and licensing, broadcasting, (and is a) booking agency and talent agency.”

While Jackson claims millions in company revenues, the Florida Secretary of State’s office canceled JBS Management’s annual report when the company’s $215 check bounced. When JBS sent a check for reinstatement, that check bounced, too.

Jackson was in business in Hawaii for about 10 years, managing a company he called Jackson Broadcasting Systems Inc.

His problems went beyond the IRS.

In 1988, Hawaii’s Department of Commerce and Consumer Affairs issued a cease-and-desist order to Jackson and Jackson Broadcasting, demanding that he stop selling stock in Jackson Broadcasting in violation of the Uniform Securities Act.

According to documents obtained from the state of Hawaii, Jackson made claims about Jackson Broadcasting that sound similar to the claims he now makes about his Florida companies.

The documents said that Jackson “sold and/or offered to sell shares of stock … issued, published and/or circulated documents consisting, in part, of a letter addressed to `shareholders/clients’, financial statements purportedly setting forth the financial condition of respondent JBS.”

The documents claimed:

  • A $144,000 net gain in revenue when the company did little if any business.
  • That Jackson maintained residences that he did not own, including one valued at $2.18 million.
  • That Jackson maintained several bank accounts containing thousands of dollars, when the accounts in reality contained very little money.
  • That Jackson opened a bank account, made deposits using checks from other accounts that had been closed, and then withdrew cash from the account.

The cease-and-desist order was to remain in effect until rescinded by the commissioner, but the state of Hawaii said in March that Jackson had once again attempted to sell stock in his companies.

As a result, his businesses were fined $50,000, and he was slapped with a $25,000 individual fine.

Jackson graduated from Lakeland High in 1978 after starring in basketball. He then enrolled at Ricks Junior College in Idaho, where he reportedly also played basketball. His next stop was at Brigham Young University in Laie, Hawaii, which he reportedly attended on an athletic scholarship.

He returned to Lakeland about two years ago.

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