conducted his criminal activities in his home. He held
business meetings there, he collected and stored hundreds
of thousands of dollars there, and he maintained his
business records there. It is undisputed that petitioner
greeted Mr. DiMichele's business associates when they came
to the home for meetings with Mr. DiMichele. There is also
persuasive evidence in the form of testimony by one of
Mr. DiMichele's business associates, Mr. Michael Madgin,
that at least one meeting took place in petitioner's
presence during which Mr. DiMichele, Mr. Madgin, and
another person counted money and discussed illegal drug
activities. We also credit Mr. Madgin's testimony that he
delivered to petitioner a payment of cash in the amount of
$50,000 to $100,000 for Mr. DiMichele.
Furthermore, there is ample evidence that petitioner
was aware of the fruits of her husband's illegal drug
activities and, hence, knew or should have known of the
substantial understatements of tax attributable to
unreported income in both 1985 and 1986. The investigation
conducted by the DEA agents in 1987 and their searches of
petitioners' home and safe deposit boxes revealed that the
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