- 8 - was not a certified public accountant, having failed the C.P.A. examination at least once. An attorney named Lee Klein (Klein) provided legal services for Modern and its clients. In 1984 Federal agents seized a large quantity of books and records at Modern in connection with a criminal investigation. In 1987 Klein retained David Shindel (Shindel), a certified public accountant, on behalf of Modern and a number of its clients, including two of petitioners. The purpose of the retainer was to review corporate books and records for compliance with the tax laws. The scope of Shindel’s retainer subsequently expanded to include additional petitioners as the extent of noncompliance among Modern’s clients became evident. In 1988 the criminal investigation of persons working for, or associated with, Modern resulted in the indictment of Mohney, Klein, Tompkins, and Scribner for conspiracy to defraud the Government by impeding the Internal Revenue Service (IRS). Each was subsequently convicted of this or a related offense. In or about 1990 Shindel became aware that several of Modern's clients were making payments to foreign companies. By 1991 he had uncovered evidence of prior payments extending back several years. Available records concerning these payments were in some cases incomplete; it is not clear, however, to what extent this was attributable to the earlier Government seizure. For example, there were canceled checks payable to Fun Films dated January 1985 that bore the word "loan", but Shindel foundPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011