By PHILLIP BANTZ
The Keene Sentinel: April 12, 2009
HINSDALE — While the Hinsdale Greyhound Park was struggling financially, its president and chief executive officer kept his two daughters on the payroll in “phantom jobs,” sources say.
Joseph E. Sullivan 3rd filed for Chapter 7 bankruptcy in mid-December, citing the sour economy as a factor, and the track closed its doors.
Hundreds of bettors with an estimated half a million dollars in their unsecured wagering accounts were told their money was gone, because it had been commingled with the track’s general funds.
The state Attorney General’s Office has launched an investigation into Sullivan’s handling of the bankruptcy, and a trustee is trying to secure and liquidate the track’s remaining assets to repay bettors and other creditors.
Meanwhile, two former high-ranking track employees who asked to remain anonymous have independently told The Sentinel Sullivan’s daughters Meghan and Brianna were on the payroll for years, but they did not hold steady jobs at the track. The sources said they held “phantom” or “ghost jobs.”
“As long as I can remember, they were showing up on my department’s payroll,” said the first source, who began working for Sullivan in 2002. “Most of the employees there already knew these girls were getting paychecks.”
Sullivan has declined to comment through two of his attorneys, who also declined comment or did not return phone messages and e-mails seeking comment about his daughters’ salaries and other financial information pertaining to the track.
Meghan Sullivan was paid $393 a week throughout 2007, earning approximately $20,460 before taxes, according to payroll documents obtained by The Sentinel.
She received one paycheck for $393 at the end of the first week of 2008, and then she no longer appears on the payroll. She was living and going to college in Washington, D.C., while she was receiving the checks, according to the second source, who began working for Sullivan in 2001.
Brianna Sullivan occasionally worked at the track as a fill-in when she wasn’t away at college, and was paid $200 to $300 a week, the second source said.
Brianna Sullivan does not appear on the track’s payroll during the past two years because she took a job with Major League Baseball, which frowns on employees having ties to gambling institutions, the first source said.
Joseph Sullivan’s wife, Virginia, was being paid $823 a week, but had steady employment at the track as director of food and beverage and “was well worth every dime she got,” the first source said. Her salary in 2007 and 2008 was approximately $42,830 before taxes, according to payroll documents.
Joseph Sullivan drew weekly checks of between $3,340 and $9,100 in 2007 and 2008, bringing in more than $279,700 before taxes during 2007 and about $225,000 in 2008, when he began taking weekly pay cuts in the period leading up to the bankruptcy filing.
Sullivan also borrowed $650,000 from the track between 2002 and 2008. In 2005, the bulk of the loans he took out against the track went toward personal expenses, according to the second source.
The bankruptcy trustee is now attempting to trace and recover the money Sullivan borrowed from the track to repay the creditors.
The track lost $330,912 in 2006 and $470,816 in 2008, but reported a profit of $378,928 in 2007, according to bankruptcy filings.
Why the track profited the year before it went bankrupt remains a mystery. The N.H. Racing and Charitable Gaming Commission had no answers, and Sullivan’s attorneys declined to offer an explanation.
In 2007, the track obtained a $1 million loan from TD Banknorth in an attempt to stay afloat, but cash from the loan should not be counted as revenue, according to Sudhir K. Naik, deputy director of the gaming commission.
More than a year before Sullivan filed for bankruptcy, he formed Hinsdale Real Estate LLC with Carl B. Thomas of Spofford-based Thomas Construction Corp. and sold the track’s 102 acres and buildings to the holding company for $3.3 million.
Sullivan remains in the middle of negotiations to sell 22 acres of land that now belongs to the holding company to Wal-Mart for $2.1 million. The deal with the holding company and its pending sale of land to Wal-Mart will be investigated as part of the bankruptcy process.