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Behind those bungled ballots

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Behind those bungled ballots

Election officials in Montrose County were forced in June to conduct a hand-count of more than 10,600 mailed-in ballots in their primary election because of a printing mistake. Integrated Voting Systems — doing business as Integrated Voting Solutions, according to tax paperwork filed with Montrose County — had printed the wrong ballots. Since then, Montrose, Routt, Clear Creek, Moffat and Saguache counties have decided not to use IVS for their general elections.

The company hired by more than a third of the counties in Colorado to print ballots for their primary elections is connected to a California man who has a history of not paying taxes or debts, has significant judgments levied against his businesses in court over the years, and appears to still be active in the company.

Eric Kozlowski, who started Integrated Voting Solutions, filed for bankruptcy in September 2016, the same month the businesses he was connected to were registered to his daughter, who was 19 years old at the time. One of those businesses began operating under a slightly new name — Integrated Voting Systems.

Integrated Voting Systems — doing business as Integrated Voting Solutions, according to tax paperwork filed with Montrose County — entered the spotlight in June when Montrose election officials were forced to conduct a hand count of their primary election because IVS had printed the wrong ballots. In a letter to IVS, California elections officials cited the reports about the recount and another article in The Daily Sentinel, which reported IVS owed taxes in California and was prohibited from doing business in the state. The letter expressed concerns about the company's ability to conduct business and potentially putting county elections at risk. The company responded by insisting Integrated Voting Solutions and Integrated Voting Systems have nothing in common and aren't the same company, according to the Fresno Bee.

IVS has contracts to print ballots in five California counties. Twenty-five of Colorado's 64 counties used IVS for this year's primary election, though some have dropped their business with the company after the snafu in Montrose, the latest complication in a long list of issues with Kozlowski and his business dealings.

HISTORY

Kozlowski's career includes the formation of several printing and mail-related businesses, including IVS, Central Valley Presort, The Presort Center and Elk Envelopes.

He started in the mailing business in 1984 when he was only 16 years old, according to court documents, eventually working for a company he ended up buying and calling Central Valley Presort. He started IVS in 2004.

According to documents filed in Kozlowski's bankruptcy proceedings, the businesses employed more than 120 workers at one point in time and grossed $20 million.

That prosperity didn't last. According to the bankruptcy filing, Kozlowski and his wife Ronda amassed $15.6 million in debt, including unpaid property, sales and employment taxes and liabilities from property and business loans, lawsuit settlements and credit cards. A review of the creditors' debts shows the couple owed more than $1.6 million in taxes to federal, state, city and county entities, causing the state of California's Tax Franchise Board to bar their companies from doing business with the state. And they accumulated more than $2 million in credit card debt from nearly 50 different accounts.

All the businesses "are defunct now," Kozlowski wrote in the bankruptcy filing.

THE BANKRUPTCY, IVS & IVS

An attorney representing Integrated Voting Systems and Integrated Voting Solutions claims the two companies have nothing to do with each other and that Kozlowski isn't involved in IVS operations any longer. However, records show they share employees, addresses and clientele.

Sources close to IVS also say Kozlowski is very much still involved in the ballot-printing business, though his now 20-year-old daughter who attends college is currently listed as the president. Under penalty of perjury, Kozlowski said he retired in 2015, according to bankruptcy court documents.

Eric Kozlowski and wife Ronda filed for Chapter 7 bankruptcy in September 2016, according to court records. The couple blamed the recession and a foreclosure on commercial property worth more than $3 million in Fresno for the situation, but they also faced more than $1.3 million in business debt judgments, lawsuits and labor disputes, records show.

A flurry of business filings in California, Colorado and Florida, all states where IVS does business, reflects a scramble to shuffle Kozlowski's business interests around the time the bankruptcy was filed. And it seems Kozlowski was able to relieve himself of his biggest secured debt by having his then-teenaged daughter create a new company that would assume a fraction of the debt he owed.

According to a review of that bankruptcy filing, Kozlowski fought with his biggest creditor to push the bankruptcy proceedings along and relieve himself of roughly $2.6 million in unpaid commercial loans to one of his businesses, Central Valley Presort. The loans came from First Fresno Bank, which wanted more information about another company that had negotiated to buy those loans out at a much-reduced price. That company, called Beekoz Direct Marketing, Inc., just happened to be owned by Rebecca Kozlowski, formed when she was 18, according to Delaware business records. Beekoz registered to do business in California using the Kozlowski family's former address in Visalia, a home that went into foreclosure.

The attorney representing First Fresno Bank accused the Kozlowskis of shuffling companies around in the year prior to filing for bankruptcy, "all in an effort to keep those assets out of the reach of creditors," according to motions filed in the case. She also suggested the Kozlowskis are the true owners of the businesses instead of their daughter, and said shutting down their own companies and transferring customers to Rebecca's "new" businesses devalued their assets, robbing the creditors of the money owed to them.

"With the exception of her ownership and roles in connection with The Presort Center and IVSystems, Rebecca's work experience consists of child care and working in the drama department at Cal Lutheran," the attorney wrote.

Rebecca Kozlowski was a 19-year-old college student living in the dorms more than 200 miles south of Fresno at the time.

She signed an agreement for Beekoz to buy the loan for her parents' debt in August 2016, only five months after Beekoz was formed and only a month before her parents filed for bankruptcy.

The agreement called for Beekoz to pay $450,000. Eric and Ronda Kozlowski were able to proceed with the bankruptcy, which was finished last month. In the end, creditors who claimed the Kozlowskis owed them $119.7 million were left without payment, and only $2.8 million was distributed to creditors, according to bankruptcy court records.

"Our daughter, Rebecca, with the assistance of Ranjiv Purewal, a family acquaintance with a business background in financial consulting, sales and marketing, took our business model and started her own businesses," Eric Kozlowski wrote in a December 2016 court document. "Rebecca did so by utilizing her trust fund monies."

It's unclear where Rebecca got the money to start the business or come up with the money Beekoz spent on the loan sale for her parents' debt. The couple disclosed trust accounts for their three younger children in their bankruptcy filings, with each account amounting to only about $1,000.

Purewal, now the CEO of Integrated Voting Systems, filed paperwork in November 2016 with the state of California forming a corporation called Purewal Inc. Records show it was classified as a consulting business with Purewal listed as the CEO, president, CFO and secretary of the company.

An attorney representing IVS claims Integrated Voting Solutions, Kozlowski's former company, and Integrated Voting Systems, the new company listing his daughter as president and Purewal as CEO, are completely unrelated. However, IVS does business in both names, according to business records and tax paperwork filled out by company representatives, and also shares locations, clients and employees.

Attempts to contact Purewal and Eric and Rebecca Kozlowski for comment were unsuccessful.

2018 ELECTIONS

According to bills submitted to Montrose County, obtained by the Sentinel with open-records requests, IVS has asked Montrose County to pay a little more than $26,000 from invoices sent in April and June. The county's elections office contracted with IVS for the coordinated election in November 2017, the spring 2018 municipal election and the primary election in June.

So far, the county has only paid about $2,900 for postage involved in the municipal election in March, according to Katie Yergensen, Montrose County spokeswoman.

The snafu happened when IVS printed and sent the wrong ballot to voters, one that Montrose County Clerk's Office officials asked the vendor to delete because it wasn't working. Instead, the older version of the ballot was mistakenly printed, sent to voters and wouldn't work with the election equipment, so votes had to be tallied manually. The bid for the project was $26,175, according to information obtained from Montrose County with an open-records request. Montrose officials said previously their desire is to not pay for the ballots.

Citing concerns about the Montrose ballot incident in June, some Colorado counties who used IVS for their primary elections and planned on using the company to print and mail ballots for the general election are jumping ship and hiring other vendors.

Montrose, Routt, Clear Creek, Moffat and Saguache counties have decided not to use IVS.

"It was kind of a last-minute thing," Routt County Clerk Kim Bonner said.

She said a new vendor has been chosen and will order envelopes this week, as election preparations have already begun in her county, where 17,000 ballots are expected to be mailed. Bonner said the hand-count of more than 10,000 ballots in Montrose worried her and she was also concerned after an IVS employee she respected resigned after the incident.

Moffat County will also switch vendors for approximately 7,500 ballots after using IVS in the primary, according to Election Coordinator Tori Pingley, who said the county decided the risk was too great to stay with them.

"It was Montrose that we were really concerned about," Pingley said. "A hand count is our biggest fear."

Boulder County elections official Justine Vigil-Tapia said her county decided to keep their plans to use IVS for approximately 240,000 ballots. They will implement additional quality-control processes and testing to catch any mistakes.

Unlike California, Colorado doesn't have an approved list of ballot vendors or require an inspection or review of ballot-printing companies for them to conduct business with counties.

Some county elections officials said they hope that changes.

"I think probably the Secretary of State's Office should have that authority especially because we're under a uniform voting system now," Bonner said.

Colorado counties can choose to hire any ballot vendor they want or print their own. There's currently no way to know which county is using which vendor, other than asking around.

Bonner said she hopes Colorado will pursue a method of validating ballot vendors to make sure printers are reliable and able to perform elections they're hired to do, to avoid problems like what happened in Montrose.

"Colorado's election law does not impose any technical, financial or other requirements on ballot printing and mailing vendors," secretary of state spokeswoman Lynn Bartels wrote in an email. "As a result, the Secretary of State does not, and is not authorized by statute to, certify or qualify commercial printers to engage in that line of business."

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