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the checking account of Rain & Shine (R&S), a Panamanian
corporation. The memo blank on each check reflected that it was
for "furniture, fixtures and equipment". These notations were
fabrications designed to permit Landing to deduct these
expenditures as business expenses.
The distribution of the $1 million deposit, of which
$750,000 went to the general partners of Landing and the rest to
petitioner, violated the terms of Landing's construction loan
from the Bank. Under the loan agreement, the first income earned
by Landing was to have been applied toward paying off the
construction loan to the Bank.
Petitioner endorsed the $50,000 and $150,000 checks in 1981
and 1982, respectively. Petitioner directed the Panamanian bank
to mail R&S's account records to him in the United States. A
small quantity of temporary checks for R&S was mailed to
petitioner at his home. All checks on the R&S account were
drawn by petitioner, using either his name or the fictitious name
of Daniel Dunn. In 1981, a check was drawn on the R&S account
payable to petitioner for $45,000. This check was signed by
petitioner as an authorized signatory and was ultimately
deposited to his New York City checking account.
During 1982, disbursements totaling $143,075 were made from
the R&S account to the Hill Winery Associates checking account
(Hill account) at the Citizens First National Bank of New Jersey,
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Last modified: May 25, 2011