1. SMART Holdings USA – SMARTvt.org Mid-Summer, August , Volume # 9, 2013
A U S T R A L I A N C O R P O R A T I O N T O C H O O S E
V E R M O N T F O R U S E X P A N S I O N H Q
Safety Appliances
Halting The Eye Injury Epidemic:
SMART CEO MJ Kipp, thought he was outback-deep when he first
heard Rick Sells eye-ear-safety product idea. But when Ricki stopped
talking Kipp said, ―What a great idea – let’s bring this to the US. Not
an easy task: Rick’s wife’s family has a 12,000-acre 4,400 cattle
ranch in West Wyalong, New South Wales, Australia. Rick, a Master
Builder, holds the highest construction license awarded by the heavily
regulated Aussie Building Trades. Rick and his workmate Jorge
Peirra worked the dust-ladden former gold mining bad-lands of West
Wyalong and often had eye and ear injuries prompting Jorge to invent
Eyemuffs and ―Reptiler‖ as a company was born. The two using
standard RZ87+S ANSI Lens for Low, Neutral and Bright Lights and
Acoustic Decibel-dampening earmuffs made with a brand new
memory plastic with fantastic almost magical properties --
thermoplastic polyester elastomers provide the flexibility of rubbers,
the strength of plastics, and the processability of thermoplastics.
See “Eyemuffs” Page 2
SMARTvt.org – SMART Holdings USA
A dynamic organization led by Michael Kipp, Mark Renkert Michael Hussey, and
Gabrielle Meunierdriving SMART Holdings USA economic Development Engine
Creating US Companies and Jobs. SMARTvt created a task force that provides
resources, education, training, financing solutions to business startups for
approved plans. About SMARTvt.org. Vermont's largest solution provider
featuring teams of subject-matter experts with one voice as one firm;
Your Issue
Eye-on VT Embezzlers
…….. Vermont summer…
SMARTvt.org, a global consultancy offering sustainable applications such as
Hands-on Engineering, Accounting, Finance, Marketing, New Product
Development, Research, Medical Devices and Technology, Pharmaceuticals,
Telephony, E-enterprise, IT / IS implementation - service,
Merger & Acquisition, LBO, Business Valuation, Forensic
Accounting, SEC Compliance, Petrochemical Extraction,
Defense Systems, and global manufacturing enterprises.
Page 3, Stopping VT Embezzlers
Page 5, Eco Dev Chair Speaks
Page 7, State’s Shadow Economy
Anti-embezzlement Advisor
Doug Babcock Rolls Out New
Program

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
ManyofGreatDepressionWorkers
The 14.6M Who Lost Jobs Turned To SSDI in
Desperation–Could NotRe-enter LaborForce–
A Huge National Failing Not To Re-employ
LegionsofJobSeekers
Peirra, featured in the Youtube Product Video (http://bit.ly/10Aa9Vi) and Sells experimented
with over a hundred polymer formulations before selecting one patented formula that uses grades
of this thermoplastic polyester elastomer that are heat stabilized, flame retardant and blow
molding conducive offering colored concentrates, UV protection additives, hydrolysis resistant
additives, heat stabilizers and flame retardants. This Renewably Sources Thermoplastic
Elastomers has a reduced environmental footprint without compromising performance. The
―Eyemuff‖ formula is ideal for parts requiring excellent flex fatigue and broad use temperature.
It resists tearing, flex-cut growth, creep and abrasion. It offers strength and stiffness plus
outstanding toughness while resisting hydrocarbons and many other fluids. After several
prototypes the pair set out to slow the incredible rate of 800,000 eye injuries per year according
to the Centers for Disease Control.
Michael Kipp, CPA, functioning as Reptile USA’s CEO said, ―the business plan shows
incredible unit sales potential with channel distribution in the DIY, Equipment, Construction,
Firearms, Law Enforcement, Landscaping, Mining, Woodworking, Tiling, Mason and Utility
Segments,‖ adding, ―one large vendor just place a 8,000 unit order.‖ Clearly we can become to
Eye and Ear Safety what Bicycle Helmets have become to
today’s cyclist. The evidence is pretty clear – we need to
protect our eyes and ears. These products of cost-effective, fashionable, comfortable, and fun.
The Center of Disease Control reports: each day more than 2,000 U.S. workers receive some form
of medical treatment because of eye injuries sustained at work. More than 800,000 work-related
eye injuries occur each year. Last year 300,000 eye injuries were treated in U.S. hospital
emergency departments (ED). This was 22.2 cases per 10,000 full-time workers. Of these workers,
80% were men. Compared with women, men had an eye injury rate 4 times higher (32.4 vs. 8.2
cases, respectively, per 10,000 full-time workers). In 70% of cases, the injury was caused by
contact with an object or equipment. In 26% of cases, the injury was caused by exposure to
harmful substances or environments. Injury sources were: Scrap, waste, debris (34%), Chemicals
or chemical products (14%), Person, plants, animals and minerals (9%), Parts and materials
(6%), Welding torches (6%)
These are unusual characteristics for the Vice President of Finance for one of Vermont’s most successful companies, Northern
Power where Sharrow plays a Global pivotal role in expanding Northern Power’s global foot print as a relentless advocate for
alternative energy master plans, strategies, growth, job creation and economic development..

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
SMART Holdings USA is leading the way in Vermont in
raising Business Awareness That Embezzlement Does
Happen.
SMARTvt Anti-
embezzlement Guru,
Cynus CEO, and Law
Enforcement Officer
with an MBA Doug
Babcock says, "It starts
with stewardship, process
implementation,
methodologies, oversight,
and awareness.
Babcock's a hardened
police officer, expert in
interviews and has a
uncanny sense for when
"the story’s not right." Vermont has had dozens of high
profile embezzlers in powerful companies: Dynapower,
Mickey Wiles from Ben & Jerry's, Rhino Foods, Number
Town and City Offices, People's Bank, and Southern Vermont
College CFO, James Beckwith.
Babcock says it is happening right now and he and his team at
Cygnus / SMARTvt.com are ready to teach employers how to
find it, report it, investigate it, and report it to the police.
He says kickbacks, payroll fraud, false reimbursement claims
and the use of company credit cards and accounts for
personal use are all issues of employee embezzlement that
employers are faced with on an all-too-frequent basis.
As employees try to become more creative with their schemes
for embezzling company money into their own
pockets, employers can fight back and put up internal ―road
blocks‖ to help deter employees from getting their hands on
money that is not theirs.
One of the harshest realities about employee embezzlement is
that it’s usually conducted by employees who have gained
significant levels of trust from their superiors. Embezzlers
usually begin by taking small sums of money, and if they
realize they have yet to be caught, can continue taking money
for many years, equating to significant losses to your company
There are many different signs that signal the presence of
embezzlement. Sometimes it’s can even be company policies
and the roles and responsibilities outlined in employee
job descriptions that make it easier for embezzlement to take
place. According to the article ―Embezzlement: Everything
You Need to Know ― by Stephen Linker, organizational
conditions that create an open door for embezzlement to occur
include the inadequate segregation of duties, lack of employee
training and understanding regarding company policies and
the consequences for violating them, high
turnoverfrequently acts in ―crisis‖ mode.
Aside from the organizational conditions that increase the
opportunity for embezzlement, you can also observe
changes in employee habits and discrepancies in
financial reporting and accounting statements to
identify embezzlement. In the FindLaw.com article
―Embezzlement Warning Signs―, they state that other key
signs that point to the occurrence of embezzlement within
the workplace include:
Untimely and unorganized financial statements and reports.
• Unbalanced accounts, altered check amounts and
the occurrence of duplicate payments.
• Creation and payments made into false accounts that
have matching addresses to that of an employee.
• Unexplained losses of company funds.
• Missing documents related to account, payments, etc.
• Unexplained or unauthorized charges to company
accounts.
• An employee refuses to take vacation, works long hours.
• Alterations in an employee’s lifestyle- high medical bills,
divorce, gambling, living beyond means for salary level,
etc.
• Bank deposits delayed or made on an inconsistent
schedule.
Embezzlement Prevention and Stewardship
There are a number of measures that employers can take to
reduce the number of opportunities within the workplace
that allow embezzlement to occur- the chance that you can
prevent embezzlement altogether is a bit of a stretch. The
separation of duties and task rotation are some of the
best measures an employer can use to reduce
the opportunity for employee embezzlement.
When rotating tasks, if an employee is guilty of
embezzlement, chances are, they will protest and try to
remain in control of any process that involves access to or
the handling of money, so that another employee cannot
uncover their scheme.
When creating job descriptions, outlining employee
responsibilities, company codes of conduct and ethics, as
well as any other policy governing your workplace, you
will want to conduct a risk assessment that
identifies vulnerabilities that may expose the company to to
embezzlement, pressures or tasks that could motivate an
employee to turn to embezzlement, money handling
procedures that do not require enough checks throughout
the process, compliance with legal guidelines and any other
weaknesses that increase the risk of embezzlement.
Another way to help detect and prevent embezzlement is
through the use of internal reporting systems. Internal

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
reporting systems allow employees to report any issues
of observed misconduct or awareness of financial fraud that
is occurring within the organization. Sarbanes-Oxley
requires financial firms to have an anonymous reporting
system in place, making employees more comfortable when
reporting misconduct, since their name isn’t attached to the
allegations.
Internal hotlines and reporting systems are the number one
tool for identifying misconduct within the workplace, as it is
usually an employee’s peers who are aware of any forms of
misconduct before they make their way up to top level
executives.
Solutions such as the Cygnus /SMARTvt System make it
easy for new cases to be documented and reported through a
variety of intake channels. Cygnus /SMARTvt is
a customizable solution, designed to meet the unique needs
of each individual company and has built in rules to
maintain compliance with legal regulations throughout
the investigation process.
Cygnus /SMARTvt uses alerts and centralized case
information, making it easier to manage the investigation
process from the time a new misconduct tip is received,
through to the reporting stages and conclusion of
the investigation.
The article ―Embezzlement Prevention and Detection‖ by
Vincent Ruocco, LLC, CPA, advises management to
conduct the following three steps when establishing policies
to make embezzlement difficult for employees to conduct:
• Adopt a policy of mandatory vacations and mandatory
duty rotations. It is not uncommon for the embezzler to
interfere with the customary workflow to effect
the embezzlement. However, if your policies require the
embezzler to give up control of his/her work, he/she
will recognize that the fraudulent scheme might be more
easily detected, and thus be detoured from committing the
illegal act.
• Don’t hire thieves. This means that if you intend to place
an individual in a position of trust, you should conduct a
background check. The typical background check involves
employment and education verifications, reference checks,
criminal conviction checks, drug screenings and a credit
check. You may need the candidate’s consent prior to
conducting some components of your background check, so
you should seek the advice of a qualified attorney.
• Conduct periodic surprise internal audits. These are most
effective after identifying high risk areas and designing
procedures to achieve the desired objectives. It is
not uncommon for management to engage a qualified CPA
to help them plan the audits and perform the procedures. It
is important to note that simply knowing that
the organization has a policy of conducting surprise
internal audits can act as a deterrent to the would-be
embezzler.
• Constantly remind your team that an Anti-Embezzlement
System is invisibly in-place and is constantly monitoring every
facet of the companies finances and they may experience
instant-audits at at time at work or at home. Use Anti-
Embezzlement Labels on Files and in Work Areas. Make it
know that Embezzlers Get Caught and Go To Jail. The
Cygnus / SMARTvt Program fits the Vermont Business Model
and is easily and affordably implemented.

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
Ehlers believes that Eco-Districts as uniquely positioned
to promote Economic Vitality and Environmental
Protections: A new urban planning movement, centered
on rezoning and infrastructure that supports
environmental sustainability is gaining converts across the
United States. One of the most recent of these
"ecodistricts," as they are called, is being developed in
San Francisco, where public-private activism is the key to
achieving a successful result.
In July 2013 report —Advocates envision ecodistricts as
the building blocks of an environmentally conscious city.
"The concept is really to use California's sustainability
challenge as a public engagement mechanism and focus
on the neighborhood scale instead of the citywide scale,"
says Scott Edmondson, a planner-economist for the San
Francisco Planning Department. "If you're trying to
reduce environmental impacts and increase efficiencies in
things like energy and water use, it's a lot easier to do at a
scale larger than a building site but smaller than a city as a
whole."
Another example: The Portland Sustainability Institute,
now renamed EcoDistricts, an organization promoting the
planning tool, describes the concept as a neighborhood or
district with a broad commitment to accelerate
neighborhood-scale sustainability. "Ecodistricts are
designed to achieve ambitious sustainability performance
goals, guiding district investments and community
action," its website states.
An ecodistrict is defined by its community; there is no
optimal size. Property owners, businesses and residents
join together to identify, prioritize and implement
sustainable development projects in the district. This
might be anything from a network of protected bicycle
lanes to the collection and reuse of rainwater to large
energy-saving schemes. Districts are already established
or in the planning stages in Portland, Seattle, San
Francisco, Boston, Vancouver, B.C. and a dozen other
cities. Boston is hosting an eco-district "summit"
workshop in November.
Colchester Vermont – Economic vision coalescing under new
Leadership.
Former Chair of the Towns Community and Economic Development
Council reflects on his tenure.
Says Ehlers, "We are small community by regional standards, but
large by those of our own state—the third
most populous."
Colchester's Ehlers says "Environment Protections and Economic
Development are not oxymoron. in fact. While we may not be the
largest by population, we are unique, however, in that we have 27
miles of shoreline on one of America's most picturesque lakes, Lake
Champlain.
Says Ehlers, Malletts Bay at the center and mountain vistas to our
west and to our east, Colchester's natural resources and close
proximity (less than 10 minutes) to Vermont's international airport in
Burlington and the interstate system lead us to believe that
Colchester and Malletts Bay could be an exciting opportunity for
experienced waterfront development professionals to invest and
harvest the rewards of a visionary project.
Ehlers believes that Eco-Districts as uniquely positioned to promote
Economic Vitality and Environmental Protections: A new urban
planning movement, centered on rezoning and infrastructure that
supports environmental sustainability is gaining converts across the
United States. One of the most recent of these "ecodistricts," as they
are called, is being developed in San Francisco, where public-private
activism is the key to achieving a successful result.‖

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
Senator Bernie Sanders, in a letter to the City of Colchester in January 2013, wrote, "I commend you for stressing the need to
balance economic development and environmental protection."
Said Ehlers, "We need to always keep our eyes on the prize - a healthy river runs through a vibrant economy."
Colchester is four hours from the Boston Metro market, and an hour-and-a-half to Montreal. Both markets already frequent our
largest city, Burlington. Colchester and Burlington are home to several colleges and the University of Vermont and a top-rated
Medical Center. Says Ehlers, "This is a unique chance to capitalize on our decades of missed opportunities to develop
commercially in harmony with our environmental assets."
Colchester is the primary water-related recreation destination—and this without any significant hotel, transient marina,
convention centers, shopping or dining offerings. Sailing, boating, fishing, wildlife watching, paddling, and beach-going
all occur good numbers without any major hospitality or retail infrastructure.
Ehler's wants to capitalize on the innate interest in its community by business. He invites readers to view Colchester's Heritage
Project —http://1.usa.gov/18Lic4b.
Ehler has a vision of a network of beautiful waterfront parks, boardwalks, and piers complete with a pedestrian marketplace
offering retail shopping, dining, and overnight accommodations complete with a transient marina and signature hotel. A
convention center and community boathouse also are a part of our future with an integrated housing and living plans.
Colchester’s Mallet’s Bay

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
"Severe recessions have historically driven jobless Americans
into the shadow economy," writes Bernard Baumohl of the
Economic Outlook Group. "We suspect the destructive nature of
the last downturn and the prolonged weak recovery pushed a
record number of people into that murky world of cash
transactions."
Baumohl cites several unusual trends to make the case for a
booming underground economy. First, retail sales since 2009
have been rising at levels typically associated with an
unemployment rate of 6 percent or lower. But unemployment
has been above 8 percent for most of that time.
"Many of those who have left the labor force since the last
recession have managed to earn income in the shadow
economy," he believes. "Their spending still shows up in the
official retail sales and personal consumption data."
See for yourself. Take a photo of your car tires. Price the tires
new. Post a slightly discounted cash-only-price of your car tires
on Craigslist. I tried this experiment and received over 100
telephone calls. The Great Recession has pushed the middle-
class hard and millions now delve daily in "The Shadow
Economy."
That may help explain one troubling trend—a sharp decline in
the labor-force participation rate, which measures the percentage
of the adult population considered to be either employed or
looking for work. The participation rate has dropped from a peak
of 67.3 percent in 2001 to 63.5 percent today. The last time it
was that low was 1979. Some economists think this reflects a
worn-out workforce resigned to long-term decline. But it might
show a migration of workers from the official economy to the
underground one instead.
Another clue to the underground economy comes from
government data on the percentage of Americans who forego
banking services, finding other ways to handle their money. The
percentage of Americans who are "unbanked" or "under banked"
rose from 25.8 percent in 2009 to 34.3 percent in 2012. These
Americans live in a cash-only world.
Vermont’s Shadow Economy: Larger and Scarier
Than You’d Think
Mostly at twilight Vermont’s homeless leave their illegal
encampments to make their way finding either unlocked or
discarded items that they trade for goods, services, alcohol
or drugs.
This reporter makes his way along the Winooski River and
Riverside Avenue and finds an encampment with two
groups totaling about 30 dwellers.
But the Shadow Economy is not just populated by the
homeless millions of middle-class Americans need the
Shadow Economy to survive.
From Craig's List, to Newspaper Classifieds - there are
legions of people in the US selling and buying things and
avoiding paying taxes on what they buy and sell.
The Great Recession has pushed millions of people off the
payrolls and into the murky world of Cash Only
Merchandise and Services.
When your friend’s teenager starts wearing fancy clothes
and sports a new I-Phone that they couldn't possibly afford
through their part-time job, you start to wonder where the
money came from.
Some economists are asking the same question about
consumers who seem more flush than they ought to
be. The answer may lie in the large "underground"
economy that doesn't show up in official statistics.
There are always some businesses and individuals
operating on a cash basis to dodge taxes, evade regulations
or conceal illegal activity. Economists now speculate that
the underground economy may have swelled during the
last few years, given all the people who can't find full-
time work at livable-wage.

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
We tend to think of the underground economy as a place where
Mafiosi and other types of criminals operate. But that's more or
less a constant. The new underground economy may entail a lot
of people doing honest work, such as freelancers and
consultants who used to be full-time professionals, computer-
repair people laid off from corporate IT departments, home
remodelers benefiting from a revived housing sector, people
running eBay business, and retirees earning a few extra bucks
by running errands for busy parents. The Internet obviously
makes it easier to work from home these days, another boon for
the gray market.
But the Internet also allows people to buy, sell, earn, barter,
and leverage, lease, rent, vacation and use resources massively.
Data from the IRS shows that total tax receipts from personal
income dipped in 2009 and 2010, as would be expected in the
aftermath of a tough recession. In 2011, the last year for which
data is available, tax receipts rose by about 14 percent, as the
economy recovered and more people went back to work. That's
a healthy rebound, but some of that may have come, ironically,
from government transfer payments, such as
extended unemployment insurance, that temporarily boosted
some people's income, On the whole, it's hard to tell if tax
receipts are depressed as more people underreport their
earnings.
Economists estimate the size of the underground economy at
somewhere between 8 percent and 14 percent of total GPD,
which could amount to as much as $2 trillion worth of
economic activity. Authorities in California say off-the-books
transactions cost the state $6.5 billion in lost tax revenue every
year.
If the trend is similar throughout the U.S. economy, that
would amount to roughly $50 billion in lost tax revenue for
all 50 states combined, plus an even bigger chunk that
Washington fails to collect. All told, that would be more
than enough to completely cover the $85 billion in spending
cuts—known as the sequester—that just went into effect.
On the other hand, that's a lot of cash consumers end up
keeping to spend on cars, appliances, restaurant meals and
vacations—almost like a government stimulus program.
Here's the rub. There is a lot more physical cash in the
economy than there would be during good economic times.
Tracking total cash in the market is one way to gauge the
Shadow Economy.
Currency in Circulation. Another way to measure the
underground economy is to look at the growth of currency
in circulation, especially large bills such as $100 bills. Since
the underground economy operates almost exclusively in
cash, unusual increases of cash in circulation are considered
a valid indicator of its growth.
Figure II shows the growth of $100 bills as a percentage of
the value of all outstanding U.S. currency. As one can see,
there has been a steady rise for many years.
• According to the Treasury Department, $100 bills have
risen from less than 20 percent of the value of currency
outstanding in 1967 to more than 63 percent in 1997.
• in 1997 total currency increased by $31 billion - and $30.2
billion of it was in $100 bills.
Economists can calculate the size of the underground
economy from currency data by looking at the real increase
in currency per capita above some base period. The
assumption is that law-abiding citizens will not ordinarily
increase their day-to-day need for cash (in inflation-adjusted
terms). Hence, any significant increase in cash per capita
must be used in the underground economy. On this basis,
Professor Edgar Feige of the University of Wisconsin
recently put the size of the U.S. underground economy at
between $500 billion and $1 trillion in 1993.

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SMART Holdings USA Mid-Summer, August , Volume # 9, 2013
A factory worker has a second job driving an unlicensed taxi at
night; a plumber fixes a broken water pipe for a client, gets paid in
cash but doesn't declare his earnings to the tax collector; a drug
dealer brokers a sale with a prospective customer on a street corner.
These are all examples of the underground or shadow economy—
activities, both legal and illegal, that add up to trillions of dollars a
year that take place "off the books," out of the gaze of taxmen and
government statisticians.
Although crime and shadow economic activities have long been a
fact of life—and are now increasing around the world—almost all
societies try to control their growth, because of the potentially
serious consequences:
• A prospering shadow economy makes official statistics (on
unemployment, official labor force, income,
consumption) unreliable. Policies and programs that are framed on
the basis of unreliable statistics may be inappropriate and self-
defeating.
• The growth of the shadow economy can set off a destructive cycle.
Transactions in the shadow economy escape taxation, thus keeping
tax revenues lower than they otherwise would be. If the tax base or
tax compliance is eroded, governments may respond by raising tax
rates—encouraging a further flight into the shadow economy that
further worsens the budget constraints on the public sector. (On the
other hand, at least two-thirds of the income earned in the shadow
economy is immediately spent on the official economy, resulting in a
considerable positive stimulus effect on the official economy.)
• A growing shadow economy may provide strong incentives to
attract domestic and foreign workers away from the official
economy.
Vermont has a massive Shadow Economy proportionate
the enormous drop in the Labor Force. The Craigslist
Exercise in Vermont reveals a palpable desperation to
sells goods and services. Vermont Junk Yards are
thriving at rates never before seen as armies of Scrap
Metal Hunters scour garbage bins, roadways, and
people's homes seeking bits of metal they sell by the
pound and ton.
Services, Goods, and Foodbartering in Vermont are also
a large part of the Shadow Economy with widespread
trading. And Service Personnel will do projects for 20%
less if cash is paid.
A walk along a the hiking path along the Winooski River
on Riverside Avenue discovered large homeless camps
stack with scrap metal, bottles, cans, and other items
sourced from local neighborhoods.
Surprisingly, just off of North Beach between 20 - 35
homeless people living in a tent city outfitted from items
found in local residences. All these areas are well known
to police and after many forced evictions - new
populations spring back.
All the literature points toward a vibrant economy will
diminish the shadow economy. It is a lot hard to get
goods and services reliably and with solid quality in the
Shadow Economy. The key is job creation, strengthening
the middle class with education, opportunity, and
jobs. The risk of not doing so means sliding toward
medieval America.