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‘A one-two punch’: Bookkeeper accused of stealing from small businesses already hurting from COVID-19 shutdown

Clients called Patricia Lindau the “nicest person” — until she disappeared.

“I felt like I’d been stabbed in the heart,'' John Damroth said of learning his taxes have not been paid. He owns Planet Records in Cambridge.
“I felt like I’d been stabbed in the heart,'' John Damroth said of learning his taxes have not been paid. He owns Planet Records in Cambridge.Jessica Rinaldi/Globe Staff

For years, small-business owners from Maine to Cape Cod knew Patricia Lindau as the nice woman who handled their payroll and made sure they paid their state and federal taxes on time. Her clients, mostly mom and pop restaurants and shops, were like family and she chatted with them over the phone for hours, asking about their lives and their kids and telling stories about her cat.

When she disappeared in May — her website gone, her phone disconnected — some feared something terrible had happened to the Newburyport businesswoman.

“I was so concerned when I couldn’t reach her, I sent an e-mail,” said Bill Cushing, owner of Christopher’s Restaurant in Reading. “I was afraid it was the virus.”

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Bill Cushing, owner of Christopher's Restaurant in Reading, recently learned he owes more than $60,000 in back taxes.
Bill Cushing, owner of Christopher's Restaurant in Reading, recently learned he owes more than $60,000 in back taxes. Jessica Rinaldi/Globe Staff

In reality, Cushing and many other clients of Lindau’s Northeast Abacus Inc. were the real victims. It turns out Lindau had failed to make tax payments on behalf of her clients, sometimes for years. Now, more than 20 New England businesses owners, most already reeling from the economic crisis, are learning they owe huge amounts to the Internal Revenue Service, and the state. Cushing alone owes more than $60,000 in back taxes.

Some business owners remembered receiving periodic overdue tax payment notices, but they said Lindau always assured them the notices were mistakes and she provided “documentation” to prove it. They believed her.

It’s unclear how much Lindau’s clients owe in unpaid taxes overall, but Lindau and her husband filed for bankruptcy late last month, listing debts of $1.3 million to their 20 biggest creditors. But that may be an understatement. One client, Jimmy’s Pizza Too of Chelmsford, has sued Lindau and her husband, saying she failed to pay $159,000 in taxes the company owed — 60 percent more than the amount Lindau listed in the bankruptcy filing.

“It’s absolutely disgusting,” said George Lambos, the owner of Fresco’s Roast Beef & Seafood in Malden, who has also sued to recover at least $130,000 he says he owes the state and federal government. “You stole from innocent hard-working people. And with all that’s going on? It’s hard to sleep at night.”

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Many of the business owners contacted local police or state and federal law enforcement authorities, they said. But most fear they’ll never recoup their money, though the judge in Jimmy’s lawsuit has forbidden the Lindaus from selling any assets without court approval.

And the business owners who have spoken to IRS agents about their debt were told none of it — except perhaps penalties — would be forgiven. They all have to pay. The IRS and the state Department of Revenue say they have no discretion, by law, to forgive tax debts.

Lindau, who left Newburyport for a house she and her husband own in Newburgh, Maine, didn’t respond to repeated requests for comment. She e-mailed the Globe with a phone number, but the number had been disconnected.

Lindau’s lawyer said in a court filing that the couple planned to liquidate assets, including their house in Maine, in hopes of paying off creditors within three to five years. The lawyer, James Molleur, called that “a worthy goal in any reorganization bankruptcy case.”

The magnitude of Lindau’s debts is laid out in a court document Lindau and her husband, Kjell, filed this past week in Maine, where they are seeking bankruptcy protection. Her top 20 creditors, listed in the filing, include Cushing, as well as two bakeries, an electrician, 18 small-restaurant owners and a newsstand operator. There are another 40 or so named creditors, though the amounts they are owed are not listed and not all of them appear to be clients. The court filings say she owes between $1 million and $10 million to all of her creditors.

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Neither Lindau nor her attorney have explained how she came to owe her clients so much money or why she failed to pay their taxes.

Essex District Attorney Jonathan Blodgett wants answers; a spokesman confirmed that Blodgett’s office has opened an investigation into Northeast Abacus. Separately, a spokeswoman for Attorney General Maura Healey said the office received two complaints about Lindau’s business, which were forwarded to the state Department of Revenue.

Spokespeople for the US Attorney’s office in Boston as well as the IRS declined to comment.

Lindau’s clients said they were shocked when they received an e-mail in May telling them that she could no longer provide payroll services “due to unforeseen circumstances.“ There was no explanation and their calls and e-mails went unanswered.

Allyson Dawkins, who runs an electrical contracting business with her husband, Douglas, was astounded when she found out she and her husband owe the state and federal government around $54,000 in taxes.

“Never in a million years did I think this could happen,” she said. “We had her for almost eight years. She was very personable, always asking about the family and how we were doing. She was the nicest person I have ever spoken to. Honestly, I’m baffled.

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“Because of COVID, it’s like a one-two punch,” Dawkins said.

Carmen Gordon took an order from a customer inside Malden's Fresco's Restaurant, whose owner, George Lambos, says he is a victim of Patricia Lindau.
Carmen Gordon took an order from a customer inside Malden's Fresco's Restaurant, whose owner, George Lambos, says he is a victim of Patricia Lindau. Jessica Rinaldi/Globe Staff

Lambos said that when he first asked Lindau what had happened, she blamed some employees, whom she said had been terminated. After trying unsuccessfully to reach her several more times, Lambos said, he was contacted by a lawyer representing her who said she would “square everything away and make everyone whole.” That was before she and her husband filed for bankruptcy on June 25.

Cushing said he had to furlough most of his employees when his restaurant was forced to close because of the coronavirus. Last week, for the first time, he’s been able to seat some guests inside.

“It’s been financially difficult without finding this out,” Cushing, who had done business with Lindau for more than a decade.

John Damroth, who owns Planet Records in Cambridge, also got the e-mail saying the company could no longer process his payroll. He had done business with Lindau for more than 30 years.

He e-mailed back, “Are you guys okay?”

“Because it was corona time and there was no response. I kept trying. I tried calling and e-mails — nothing,” he said.

He hired another payroll company, which discovered that Lindau had failed to pay his state taxes in the first quarter of 2020.

“Oh God, then the sickness in the stomach,” he said. “I felt like I’d been stabbed in the heart.''

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Then, like a detective, he went to various agencies to find out how bad it was. He learned he owes about $16,000 to $18,000, though he’s not yet been able to confirm the amounts with state and federal agencies.

Lambos said the alleged theft hurts not only him, but his 25 employees as well. Lambos had been planning to pay them bonuses for sticking with him throughout the pandemic. He kept them on the payroll and was going to reward them for their loyalty. Now, he said, he can’t afford to.

Nor can he afford to open a second restaurant, as he had planned.

“The money is huge,” he said. “Something like this freezes everything.”

The one creditor in a good position to recover some losses to Lindau is Camden National Bank, which had given Lindau several loans, including a federal payroll protection loan that was supposed to help businesses keep their workers employed during the COVID-19 crisis. In bankruptcy court, the bank said that Lindau’s company faces multiple claims of unauthorized withdrawals from clients’ accounts, charges that “certainly sound ... analogous to fraud and other dishonest conduct.” The couple have denied the charges.

The bank plans to auction off two commercial buildings the couple own in Eastport, Maine, later this month, though the bankruptcy filing could complicate the sale. The bank said the Lindaus filed for bankruptcy primarily to stop the auction of their property.

It is not the first time a payroll processing company has been accused of stealing clients’ money. In March, an Indiana payroll company owner was sentenced to six years in federal prison and ordered to repay nearly $9 million to customers he bilked.

And in September 2019, the FBI announced it was investigating the sudden shutdown of a payroll processing company in upstate New York and the disappearance of up to $35 million.

That month, the company, MyPayrollHR, sent a message to its clients, similar to the one Lindau sent to her clients, saying it would no longer be able to process payroll transactions.

The message blamed “unforeseen circumstances” and advised companies to “find alternative methods for processing your payrolls.”



Andrea Estes can be reached at andrea.estes@globe.com.