George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 8

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                  The conclusion of the meeting set in motion a number of                                  
            events.  Pryor returned to his accounting firm and made journal                                
            entries in Kolonaki's books.  The entries reduced Georgiou's                                   
            liabilities to Kolonaki and replaced them with JAI liabilities to                              
            Kolonaki.  The entries consisted of debits of $234,000 to                                      
            "Investment in Judy [JAI]" and $952,000 to "Accounts Receivable,                               
            Judy [JAI]" (totaling $1,186,000) and of a credit of $1,186,000                                
            to "Accounts Receivable, Georgiou".  The entries were dated "as                                
            of 10/1/89" but were actually made sometime after the meeting in                               
                  Entries were made in the JAI books to change notes payable.                              
            The entries consisted of a $952,100 debit to "Notes Payable,                                   
            George Georgiou" and a $952,100 credit to "Notes Payable,                                      
            Kolonaki".  The entries were dated "as of September 30, 1990" on                               
            the books but were actually made sometime after January 18, 1991.                              
                  As part of the plan to sell shares to the public for JAI and                             
            GRS, Ernst and Young prepared the September 30, 1990, tax returns                              
            for the two corporations.  The GRS tax return was prepared pro                                 
            forma because Ernst and Young was aware that Georgiou planned to                               
            have GRS file a consolidated return with Kolonaki.  The JAI tax                                
            return was prepared as a separate return with Georgiou listed as                               
            the sole stockholder.  Ernst and Young signed the JAI return on                                
            June 12, 1991, and gave it to Crisafi.  Crisafi did not file with                              
            the IRS the separate JAI tax return for 1990.                                                  

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