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Lawsuit seeks wages

North Dakota labor officials are suing to recover more than $200,000 in wages owed to employees of WebSmart Interactive, a failed telemarketing firm that had offices in Minot and Grand Forks.

North Dakota labor officials are suing to recover more than $200,000 in wages owed to employees of WebSmart Interactive, a failed telemarketing firm that had offices in Minot and Grand Forks.

The lawsuit seeks to recover wages on behalf of at least 152 former employees, but more could be added to the lawsuit when their claims are verified, officials said Wednesday.

WebSmart employed 368 North Dakota employees -- 207 in Minot and 161 in Grand Forks -- when the company closed its doors in late April, Labor Commissioner Mark Bachmeier said.

The company operated a third calling center in Saskatoon, Sask. Altogether, the company reportedly employed about 620 workers before it collapsed amid consumer fraud allegations involving its biggest customer, Global Financial Inc. of Atlanta.

To date, 193 former WebSmart employees have filed claims totaling $290,000, he said. Payroll records from the company indicate those employees were owed $275,000, however. Investigators are working to resolve the discrepancy.


So far, the state has verified valid claims of 152 employees, who are owed $206,000 in wages, the amount sought in the lawsuit, which has been served but not yet filed.

Officials released a copy of the suit Wednesday after The Forum filed an open records request with the North Dakota Attorney General's Office. Under state law, a civil lawsuit begins when the complaint is served, even if papers haven't yet been filed.

"The action's commenced," Bachmeier said.

The number of claims is likely to increase as investigators work through the backlog of cases, he said. More employees also might come forward to file complaints. Employees have up to two years to file wage claims, he said.

And state investigators are gathering information to determine whether health insurance premiums were deducted from paychecks -- but not actually used for that purpose, as alleged by some former WebSmart employees, Bachmeier said.

"It's the largest action we've taken in my tenure," which began in June 1998, Bachmeier said. "And I don't know of any that are larger prior to my time here."

In a typical year, the Labor Department receives 230 to 275 wage claims. Wage-collection lawsuits, however, are rare.

"Most of the time we're able to resolve them through our administrative processes," Bachmeier said.


In addition to suing the company, the lawsuit also seeks to recover damages from WebSmart's owners: Robert J. Lamont, John C. Skowronek, Marius "Buzz" Stitzer and Patrick K. Conner.

Lamont, a Minot lawyer and businessman, declined to comment on the lawsuit Wednesday.

Earlier, WebSmart's owners blamed the company's failure on payments it was owed by Global Financial Inc., which sold what were billed as prepaid MasterCard or Visa cards to help customers deemed bad credit risks to improve their credit ratings -- many of them sold by WebSmart telemarketers.

Georgia authorities reportedly froze Global Financial's funds this spring, after investigators determined that many customers never received their cards, despite advance payments of more than $220 each.

A spokeswoman for the North Dakota Attorney General's Office declined to say whether it is investigating consumer--fraud allegations involving the Global Financial cards sold by WebSmart employees.

"We neither confirm nor deny investigations in this office," Liz Brocker said Wednesday.

Heidi Heitkamp, a Mandan lawyer and former attorney general, is representing 18 former WebSmart employees. She said her clients likely will join the state's wage lawsuit, provided it seeks to recover health insurance premiums collected from employees.

"They're doing the right thing, but I think it should have been done faster," Heitkamp said of the wage lawsuit. "It took a lot of pushing to get it this far."


Readers can reach Forum reporter Patrick Springer at (701) 241-5522

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