George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 41

                                                 - 41 -                                                    
            Additionally, assuming petitioners relied on counsel to provide                                
            them with advice, petitioners disregarded the advice.  With                                    
            respect to the advances, Bernard testified:                                                    
                         Q  Did you advise Mr. Georgiou at any time with                                   
                  respect to whether or not he should prepare promissory                                   
                         A  Yes.                                                                           
                         Q  Or whether it was a good idea to prepare                                       
                  promissory notes?                                                                        
                         A  Yes, of course.  Again, as a routine I advise                                  
                  clients that they must--they should treat their                                          
                  corporations as separate entities and not just another                                   
                  side of their trouser pocket, that any time money flows                                  
                  from the corporation to them it has consequences.  And                                   
                  if it's a loan, it needs to be reflected by a                                            
                  promissory note.  It's always better if it's secured.                                    
                  And the note must be for a reasonable period of time                                     
                  and must require payments.                                                               
            Pryor testified on the consolidated return issue as follows:                                   
                         Q  And how did you know to focus on the issue of                                  
                  beneficial ownership?                                                                    
                         A  * * *  I looked up in a source we have called                                  
                  the Bureau of National Affairs, it's a tax service, and                                  
                  what the criteria is for filing a consolidated return.                                   
                  I think up to that point [spring 1991] I have been                                       
                  informed that George was the owner of Judy Alexander                                     
                         And I think in that meeting, I said, Well, we                                     
                  cannot file a consolidated return unless we can show                                     
                  that there's beneficial ownership between Kolonaki and                                   
                  JAI Alexander.  Even though someone is the nominal                                       
                  owner, if we can show beneficial ownership, then it                                      
                  would be possible to file a consolidated return.                                         
                  The evidence is substantial that Georgiou, Pryor, and                                    
            Bernard then attempted to "show" beneficial ownership by                                       
            fabricating and altering documents.  The same strategy was used                                

Page:  Previous  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  Next

Last modified: May 25, 2011