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After making the above-described deposits, Alviso and GMT
booked some of these “loans” as indebtedness owed to petitioner.
The general ledger for Alviso/GMT for the fiscal year ending
November 1992, shows the note payable balance to petitioner as
$105,000, which consists of three of the four checks petitioner
wrote to the corporations and designated as “loans”. The
$105,000 note payable balance consists of the following checks
written on Bank of Milpitas, account No. 512-001-300466:
Date of check Amount Payee Check No.
12/13/90 $50,000 GMT Check
7/9/91 10,000 Alviso 159
6/4/92 45,000 GMT 195
Petitioner testified that the designation “loan” for the
$50,000 check was placed on the check to dissuade his sister from
filing a lawsuit against him questioning his ownership rights to
the businesses. Petitioner testified that he artificially
designated checks as loans to his corporations as a “smoke
screen” to his sister. At trial, petitioner claimed he did not
intend for many of his checks to be designated as loans for which
he was to be repaid.
17(...continued)
to the corporation for the insurance.
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