Chicago (Jan. 8, 2003) -Thomas Havey, one of the accounting industry's largest firms, is expected to reorganize into three separate firms in the wake of an accounting scandal at its District of Columbia-area operations.

Informed sources have said that Havey, based in Chicago, will break off into separate practices in the Midwest, D.C. and the West Coast as a result of guilty pleas entered in U.S. District Court by two former Havey partners for their roles in accounting fraud at the International Association of Iron Workers, a client of the firm's D.C. area practice.

In a plea bargain, former partner Francis J. Massey pled guilty to assisting top officers of the fund "in falsifying Form LM-2 reports from 1992 to 1999 to hide in excess of $1.5 million in personal dining, drinking, and entertainment expenses, " according to the Department of Labor. Separately, former partner Alfred S. Garappolo pled guilty to "knowingly and willfully concealing and failing to disclose" to investigators information regarding the embezzlement of $33,000 from the fund.

Lawrence Wojnarowicz, manager of Havey's office in Munster, Ind., said the headquarters office in Chicago is preparing a statement about the pending reorganization. "They (the Chicago office) are coordinating that so that we can have a unified message," he said.

Allan Koltin, president of the Practice Development Institute management consulting firm in Chicago, confirmed that Havey is preparing a statement to be released next week. Wojnarowicz declined further comment .

Havey ranked 34th in Accounting Today's Top 100 Firms list with $42 million in 2001 revenue.

-- John M. Covaleski

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