Hooters' founder blames ex-friend
Lawyers for Lynn "L.D." Stewart say any tax wrongdoing was the work of Stewart's accountant, Michael Maricle.
By KEVIN GRAHAM
Published November 10, 2005
TAMPA - Lynn "L.D." Stewart admits to having a really nice office.
A nice desk, complete with a nice chair.
"I've never sat in it," the Hooters founder said in federal court Wednesday. "I don't like offices. I'm not an office person."
Stewart testified in his own behalf for 90 minutes Wednesday. He faces cross-examination today in the courtroom of U.S. District Judge Susan Bucklew. Witnesses in the tax evasion trial against the 62-year-old entrepreneur described Stewart as a big-picture guy who left the task of doing paperwork to someone else.
"The L.D. that I knew was basically a good old boy who was a blue collar worker," said Patrick O'Connor, a Pinellas County lawyer who has done general corporate work for Stewart. "He liked to drink beer and drive around in bulldozers and build things."
A jury must decide whether to convict Stewart on two counts of tax evasion and two counts of filing false income tax returns for 1997 and 1998. The Internal Revenue Service says Stewart owes $4-million more in income taxes than he paid for those two years.
The government has accused him of failing to report $11-million in income he earned by selling his stock and ownership in Hooters Inc.
John Fitzgibbons, Stewart's defense attorney, has argued that Stewart's accountant and close personal friend, Michael Maricle, handled Stewart's finances. If anything illegal occurred, Fitzgibbons said, Stewart had no knowledge of it.
During his 90-minute testimony Wednesday, Stewart talked about working for his father's meatpacking company as a child, how he built the chicken wing empire that would become Hooters and how he never knew that his best friend eventually stole more than $900,000 from him.
Stewart attended the University of Illinois and was a member of the football team when it won the Rose Bowl in 1964. He went on to serve three years in the U.S. Army and eventually took a job working for an interstate construction company in Atlanta, then as a coal mine foreman in Chattanooga.
"I always liked working with dirt," Stewart said.
When he realized the work would kill him, he said, he moved his family from Chattanooga to Florida where they had relatives.
With $12,000 in his bank account, a family and no job, Stewart had plans to start a janitorial company. But his father-in-law introduced him to a man who needed some condominiums painted. Those few odd jobs blossomed into a general contracting company that Stewart owned, called L.D. Stewart Enterprises.
When he made $80,000 more in profit than expected on a contracting job in Orlando, he considered it "found money," he said. Tired of being thrown out of bars, he persuaded his buddies to go into business with him. The first Hooters restaurant opened on Stewart's birthday in 1983, at 2800 Gulf-to-Bay Blvd. in Clearwater. Stewart created every recipe - except the one for clam chowder - himself.
"I had every intention of being broke in six months," he said.
Hooters began to turn a profit four months later.
With business booming, Stewart persuaded Maricle, an accountant he'd met in the Midwest, to move to Florida and take over his personal and general contracting business finances.
Eventually, Maricle also handled all of Hooters's finances as well.
"Other partners didn't share the same trust in Mike Maricle as I did," Stewart said. "I trusted him about as much as you could trust anybody. I trusted him explicitly."
Outvoted, Stewart had to fire Maricle as Hooters' accountant, but he kept him as his personal accountant.
When Maricle introduced an asset protection program known as Common Law Business Organizations to Stewart in the mid 1990s, Stewart agreed to enroll. Maricle said he'd created a similar trust for his family.
"Are you sure this is legal? Are you sure this is right?" Stewart asked. Maricle assured him it was, saying the Rockefeller and Kennedy families had set up similar trusts.
In essence, it meant transferring personal assets into business accounts that would keep relatives from having to forfeit most of them to pay high inheritance taxes.
As chief financial officer over Stewart's accounts, Maricle stole more than $900,000 from his best friend. Maricle, godfather to one of Stewart's sons, confessed to taking the bulk of that money during testimony last week.
"He was like a brother," Stewart said of Maricle. "I treated him just as well as I possibly could."
Kevin Graham can be reached at 813 226-3433 or email@example.com
[Last modified November 10, 2005, 01:20:16]
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