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Ex-employees speak out against Shiprock company's chief executive 6-23-07

SHIPROCK, N.M. (AP) - Former employees of a Shiprock manufacturing plant are speaking out against the company's chief executive, saying he tapped company accounts for personal use, failed to pay suppliers on time and issued paychecks that bounced.

Hak Ghun, chief executive of BCDS Manufacturing Inc., which provides goods and services for the U.S. Department of Defense, disputed the employees' claims. He said the former employees are disgruntled.

“People are trying to tear things down when I'm trying to get this company going,” he said.

The Navajo Nation Council's Budget and Finance Committee is looking into how Ghun spent a $2.2 million tribally backed loan at the request of the Shiprock chapter.

The money, taken from the Navajo Escrow Account, was to be used as collateral for a loan to finance construction of a 100,000-square-foot industrial facility and operation expansion.

Shiprock chapter officials have requested an audit of the account, claiming the project went nowhere.

Ghun said the loan money was spent on inventory and a drought relief project.

While the company is up to date on loan payments, committee Chairman LoRenzo Bates said the tribe did not exercise due diligence before approving the company for loan collateral.

Navajo officials had even more questions about Ghun after they learned of his 1984 conviction on mail fraud, commodity fraud and perjury while involved in leading another company.

Ghun served 31/2 years in prison and said he has moved on. He and his supporters say BCDS, a joint venture with the Navajo Nation, provides jobs and revenue for the tribe's economy.

As for the employees' claims, Ghun acknowledged that some paychecks bounced, but he said that was because employees cashed them before payments from the military were wired to company accounts.

“We are not a company like the government where there's an endless supply of assets,” he said. “Of course, there were returned checks, but every one has been satisfied.”

Ernst Johnson, a 37-year-old metal fabricator, worked at BCDS from December 2005 until this month.

“They told me when I get my paycheck not to cash it until after 3 p.m.,” he said.

He added that he hasn't seen a paycheck for his last three weeks of work.

Shiprock resident Eva Begaye, who worked as a receptionist and later managed the company's trailer line, said many Shiprock-area check-cashing businesses have blacklisted BCDS.

She said payments to suppliers also were a problem.

“The steel company, the lumber company, almost all of what we use on the trailers ... they started getting nasty about their bills,” she said.

Paying suppliers was a challenge, Ghun said, because of late payments from customers and because some businesses accept only cash from companies based on the Navajo Nation.

Begaye said the of the end of her employment with BCDS came when she questioned withdrawals from company accounts at casinos.

“There was money coming in, but it was going into his pocket, into his personal account,” she said.

Ghun's personal bills, including child support and credit card payment, also came from that account, she said.

Ghun said he counted his personal bills against the $2.7 million of his own money he used to start the business in 2004 - a statement backed up by his accountant, Gwen Alston.

“I can tell you Hak has run some personal things through, but he has loaned and invested a lot of money in the company,” she said.

The practice is not common in doing business, Alston said, but “if it's your company and you've put your money in, you can take your money out, within certain rules.”

The money from the Navajo Escrow Account loan was in a different account, she said.