Money all gone, bankrupt JK Harris founder testifies; ordered to give boat to creditor
John K. Harris paid himself as much as $1.7 million a year while running the now-bankrupt JK Harris Co., but in a Charleston courtroom Friday he testified that the money is long gone.
The once-millionaire Harris said he has only about $400 in the bank, no car, no house, and a boat with an overdue loan.
“I’ve been a millionaire and a pauper four times,” Harris testified before Judge Mikell R. Scarborough. “I learned many years ago not to keep assets in my name.”
Harris, 58, is being pursued for payment of a $355,972 judgment for unpaid rent on his company’s former offices in North Charleston. The case predates the bankruptcy of JK Harris Co., headquartered in Goose Creek, when it closed at the end of last year.
Katie Folwer Monoc, attorney for the former landlord, Rivergate Center I LLC, told Scarborough that she plans to subpoena bank officials and Harris’ family members at a future hearing.
“I have reason to believe money has been transferred,” she told the judge.
It was Harris’ second appearance in a month before Scarborough related to the landlord judgment. In March Harris was jailed overnight, then fined on a contempt charge for ignoring an order to appear in court and divulge his assets.
On Friday he was fined again, ordered by Scarborough to pay $750 to satisfy a new contempt charge, for arriving 40 minutes late for the hearing. Harris apologized for arriving in court wearing shorts, a T-shirt and flip-flops, but Scarborough said it was an improvement over the prison jumpsuit Harris wore at his previous appearance.
“I don’t want to put you back in jail,” Scarborough said. “I just want to get your attention.”
Harris spent the next nearly 90 minutes answering questions from Monoc about his income and spending. She quizzed him about whether he had given any expensive gifts to his girlfriend or estranged wife during the past three years, and asked about Harris’ companies and bank accounts.
“Did I squirrel away any money?” Harris said. “No. I’m too ethical to do anything like that.”
Harris said he has essentially no assets — just a few hundred dollars and the boat — and borrows his now ex-girlfriend’s 8-year-old Buick in order to travel to Florida weekly to pursue consulting work.
He said he earns about $1,500 a week, cashes his checks at Walmart, and gives most of the money to his ex-girlfriend and his estranged wife.
Harris said he’s nearly reached the limit on his credit card, and borrows food money from his 87-year-old father.
This was the testimony of the man who just two years ago published a book about his business success titled “Flashpoint: Seven Core Strategies for Rapid-Fire Business Growth.”
JK Harris Co. was Harris’ best-known company, a nationwide tax-resolution firm once known for ads telling people it could resolve their IRS tax debts for pennies on the dollar. The company faced numerous complaints from state attorneys general over the years, related to consumer claims, and agreed to pay millions in civil settlements — money that will not get paid following the bankruptcy.
Unlike the bankruptcy case, which focused on the company’s assets, the case involving the former landlord involves Harris personally. The judgment against him was awarded when Harris didn’t defend himself in the case.
At the end of Harris’ testimony Friday, Scarborough ordered him to give the title to his boat to Monoc’s firm as payment toward the settlement, and ordered Harris to start paying $1,000 monthly beginning in June.
“That’s about half of what you’ve been paying your ex-girlfriend per month, to whom you have no legal obligation,” Scarborough told Harris.
Outside the courtroom, Harris said he was never focused on making money and has no hidden assets
“You can’t get blood from a turnip,” he said.
Reach David Slade at 937-5552 or Twitter @ DSladeNews.