Disgraced MSP Chalk in Hot Water Again

As if Managed Service Providers don’t have enough trouble gaining trust, a former New York MSP owner still awaiting trial for allegedly stealing his employees’ identities in 2006 is back in jail facing a new set of federal fraud charges. Terrence Chalk now stands accused, along with his pregnant girlfriend, of trying to bilk a BMW dealer out of several lease vehicles.   

Chalk, 45, made headlines in October 2006 when federal agents raided Compulinx Managed Services, his White Plains, N.Y.-based MSP. Chalk, Compulinx's CEO and a well-known Westchester County businessman, was charged with eight counts of stealing the identities of his employees in order to secure fraudulent loans, lines of credit and credit cards. Chalk’s nephew, Damon T. Chalk, 35, was also arrested, accused of submitting more than $1 million worth of credit applications using the names, addresses and social-security numbers of Compulinx employees.

Terrence Chalk remained in jail in White Plains until March 2008 when federal agents say his girlfriend, Addriely Hernandez, 27, helped him make his $250,000 bail. Part of  Chalk’s bail agreement  forbid him from seeking any loans, credit cards or lines of credit either individually or as a co-signer, according to federal court records. Once free on bond, however, federal agents say Chalk and Hernandez went to work trying to secure a leased BMW X5 from BMW of Ridgefield, Conn. for a company Hernandez had formed a year earlier called Citiventures Inc. using mostly falsified business and accounting documents.

According to special agent Michael Mazzuca, when the dealership asked for financial statements, Hernandez provided documents indicating she and Chalk were officers of the company. Mazzuca said the pair also supplied financial records for Citiventures that were identical to the 2004 audited records of Computek, the former name of Chalk’s failed MSP business. The dealership approved the lease X5 lease, so Chalk and Hernandez returned to the Ridgefield business looking to lease a BMW X3 and a 328i. Chalk was introduced to dealership employees as “the boss” of Citiventures and Hernandez offered more records that claimed the business, which listed Chalk as CEO and president, had more than $320,000 in the bank. Federal investigators say the business never had more than $20,000 on hand.

When the FBI got wind of Chalk’s latest ruse, his bond was revoked. He was taken into custody and returned to jail last month when he went to court for a regularly scheduled pre-trial visit. He is now awaiting a hearing on the original Compulinx charges set for later this month, according to Herbert Hadad, spokesman for the U.S. Attorney’s office in White Plains, N.Y. Hernandez, who is four months pregnant with Chalk’s child, remains free on $100,000 bond. Both face fraud and conspiracy charges in the BMW lease case.

The return to jail is just the latest twist in the downward spiral that began on Halloween 2006, when federal agents raided Compulinx and put and end to what many now say was a decade of deception.

As federal investigators dug deeper into the identity theft and fraud case, it became clear that Chalk’s MSP business, which had won him accolades from the media and membership in the Westchester Business Council Hall of Fame, was based largely on lies. According to the Westchester County Business Journal, which published several glowing profiles of Chalk, Compulinx was providing managed services for the likes of Pfizer, Tropicana, Newsday and Scudder. But former business associates say the customer roster and Compulinx claims that it hosted data for hundreds of customers in four data centers with 300 servers and 40 TB of storage were total fabrications.

Compulinx was known as Computek until 2004, when it acquired Linx Logic, formerly part of Ernst & Young Technologies. The company developed its own proprietary software platform for hosting customers' networks, dubbed Manage:Now, and moved on to launch its own partner program that allows other resellers to team on managed-services projects.

Prior to founding Compulinx, Chalk, a native Long Islander, worked at defense subcontractor Dayton T. Brown in Bohemia, N.Y., and taught PC repair and networking part time at Long Island's SUNY Farmingdale.

If convicted on the Compulinx charges, Chalk faces 165 years in prison and $5.5 million in fines, prosecutors say. He faces an additional 20 years on the wire fraud charges related to the Citiventures-BMW leasing case.