Exclusive: Bob Cole’s financial troubles popped up two years ago

The financial troubles of Santa Rosa County Commissioner Bob Cole surfaced more than two years ago, according to a law enforcement reports obtained by the IN.

In May 2009, Cole reported a possible fraud involving the general manager at Bob Cole’s Automotive Professionals. He believed Christy Matula, who he described as an employee, had made unauthorized credit card charges on the business credit cards and possibly had stolen money from the business checking account. He later alleged to Escambia County and Santa Rosa County deputies that her husband David, a mechanic at the shop, had stolen vehicles from his business after Cole had them evicted from the business.

The four-month investigation ended with no charges after the ECSO investigator determined that the dispute was more of a civil matter than criminal. However, the ECSO Offense Report reveals Cole may have pocketed cash receipts without reporting the money as income on his tax returns, repaired cars with used parts while claiming they were new to the client and insurance companies, paid personal expenses, such as household groceries, out of the business but labeled them “shop supplies” and made false claims to FEMA on the hurricane damage to his business while also pocketing that money.

Several former employees claimed that Cole’s election to Santa Rosa County Commission in 2002 went to his head and that he acted differently after that.

“Since he became County Commissioner, he started changing and it was beautiful place to work before then,” former mechanic Gilmore Hargrave told the investigators. “Everything started to go to his head.”

Another employee, Gabriel Moreno, who worked for Cole for 11 years, 1995-2006, told investigators that the Santa Rosa County Commissioner cared more about his new position than working at Cole Automotive.

“This place is gold mine,” Moreno told them, referring to the auto repair business. “if you run it correctly and Bob never ran it correctly. Everything just went to tubes. He could care less.”

Moreno said the Cole become focused in 2006 on bio-diesel. “It was him and Gov, Crist,” she said. “They were buddies ‘cause Gov. Crist was gonna name him the bio-diesel czar. Bio-diesel was Bob’s big thing.”

It was in 2006 that Christy Matula was hired to be the general manager of Cole Import Automotive with the understanding that she and her husband would eventually purchase the business. In late 2008, a sales agreement was signed, according to the ECSO report, but the actual date for closing the sale was disputed. Cole told investigators it was to be in January 2009. Matula said that it was to be in May 2009, 10 days before Cole filed the police reports against the couple.

What the Matulas were buying, according to their statements and those of current and past employees, was a business that was behind on its taxes and with vendors. At the time of the investigation, Cole said he owed $53,400 in back sales and payroll taxes.

Note: Last week, I reported that Cole had made a questionable land sale (9% percent interest) with the daughter of one of the county’s vendors for $50,000 in the summer of 2009.

Matula complained to investigators about having to pay salaries to Cole, his wife, son and two daughters, even though only Cole himself actually worked there—even that wasn’t consistently. Several of the vendors—NAPA, Auto Zone and O’Riley’s—refused to give the shop credit on parts, because Cole had outstanding balances. Cole also pressured Matula to pay him back on what he called “business loans” to the shop.

Because of these unusual expenditures, employees had to hold their payroll checks. Checks to vendors bounced. Matula opened a credit card account for the business and used cash advances to operate the business.

The transcripts of the employee’s interviews revealed a family-owned business that allegedly under-reported its income, paid personal expenses and defrauded customers, insurance companies and FEMA.

According to their statements, customers were told parts were new, when they were used ones. Work was charged on insurance claims that wasn’t done. One employee described how Cole had damaged a BMW hitting a tree when he backed the car out of the shop. Cole told the owner Ran Hicks that somebody had hit it in the parking lot.

Moreno, who worked as the bookkeeper, told investigators that she saw Cole several times during his employment handle the cash transactions at the register and pocket the money instead of putting it into the register.

Several employees stated that Cole had made false claims to FEMA and insurance companies asserting in 2004 and again in 2005 that damage to the roof of the shop and shop equipment that he hadn’t repaired with the funds received from Hurricane Opal, which was in September 1995, had been caused by hurricanes Ivan and Dennis. One said that Cole had placed some parts equipment outside in the rain and later claimed that they suffered water damage from the hurricanes.

Employees talked about Cole’s toy train business that he ran out of his business and home. Expenses for that business were allegedly paid by the repair shop.

Cole Import Automotive also was a dealer for U-Haul. One employee told investigators that Cole once used a U-Haul truck for transporting his trains to a show without renting the vehicle. U-Haul got upset when the shop couldn’t explain the increased mileage on the vehicle.

It looks like the IRS has had plenty to investigate. Maybe none of it has to do with Santa Rosa County government, but the report definitely shows an elected official that was struggling financially.