More Fuel On The Fire: Did MSP Compulinx Fail To Pay Employees?

Compulinx, White Plains, N.Y., has been under investigation since the summer, said Chris Perham, a spokesperson for the New York State Department of Labor, Albany, N.Y. Seperately the MSP's CEO, Terrence Chalk, remains in a Westchester County jail in Valhalla, N.Y., facing federal charges that he conspired to defraud lending institutions. Chalk was arrested Oct. 31, and after three weeks remains unable to pay the $2,500 needed to formally retain White Plains attorney Mayo Bartlett, the lawyer's office confirmed Monday.

The labor department investigation of Compulinx is ongoing, and its details cannot be disclosed pending completion, said Perham. Several former Compulinx employees have issued complaints to the department about non-payment of wages by the MSP since the investigation began, Perham said.

CRN learned of the labor department's investigation from someone calling himself a former employee of Compulinx who said he was owed wages by the company. The former employee told CRN he worked in sales at Compulinx until he quit in late summer after what he described as "a falling out" with Chalk over unpaid wages.

The mood of Compulinx's half-dozen or so employees quickly went south during the summer, as Chalk increasingly failed to make payroll, the former employee charged.

Chalk was "an excellent salesman and street psychologist," the former employee said.

"[Chalk] said something I will never forget about a week before we had our falling out. He said: 'You have to fake it until you make it,' " the former employee said.

Intimidation also played a part in Chalk's management style, the former employee said. Chalk's 35-year-old nephew Damon Chalk, a muscular figure, was sometimes called on by the Compulinx CEO to apply "physical reinforcement" to a situation, the former employee said.

Damon Chalk was charged with playing a part in the federal conspiracy, and is currently being held without bail. Terrence Chalk is being held pending a $250,000 bond.

Contrary to the way Terrence Chalk wanted it to appear, Compulinx did not have very many customers, the former employee said.

In a presentation made in October 2005 to Telehouse America, a colocation facility and reseller of MSP services in Staten Island, N.Y., Chalk outlined Compulinx as having four geographically situated data facilities, more than 300 servers, more than 60 Tbytes of storage, offices on Wall Street and in White Plains, solution labs and configuration centers, and a growth rate of 110 percent in four years.

During his presentation to Telehouse, Chalk outlined how Compulinx was adding Telehouse's facilities to give Compulinx a national and global reach. One month before Chalk made his Telehouse presentation, Telehouse launched a resalable managed services offering.

Telehouse spokesman Michael Vallone confirmed that Chalk made the presentation to Telehouse in October, but declined to comment further.

One of Compulinx's customers, the United Way of Westchester and Putnam, a not-for-profit in White Plains, N.Y., disconnected the MSP's services after Chalk's arrest, according to Steve Harris, IT administrator. Harris declined to comment further.

The Compulinx Web site was unavailable Monday. Repeated calls to several of the business' numbers have not been answered or returned.