Thomas L. Hobart - Page 8

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            the 1989 tax year is not before the Court, petitioner asserts                                  
            that respondent cannot rely on petitioner's conviction to                                      
            establish theft activity during 1988.  The evidence presented at                               
            trial, however, demonstrates that petitioner was involved in                                   
            theft activity during 1988.  In order to misappropriate Zebrowski                              
            funds, petitioner used his position with Zebrowski to request                                  
            changes in the way Southern paid for Zebrowski scrap.  Instead of                              
            having Southern make the checks payable to Zebrowski and mailing                               
            the payments to the Michigan office, petitioner requested that                                 
            payment be made by checks payable to petitioner or Nelson.                                     
            During the trial, respondent introduced 58 Southern checks dated                               
            during 1988 made payable to petitioner or Nelson that represent                                
            payments for Zebrowski scrap.  Petitioner also requested that                                  
            Southern make cash payments for Zebrowski scrap.  As was                                       
            Southern's practice, large cash payments were often obtained from                              
            checks made payable to Barnett Bank.  Respondent introduced 32                                 
            Southern checks made payable to Barnett Bank during 1988 that                                  
            represented payments for Zebrowski scrap.  Testimony at trial                                  
            indicated that petitioner was the recipient of these cash                                      
            payments.                                                                                      
                  Petitioner produced no reliable evidence at trial to show                                
            that respondent's determination is incorrect.  Although                                        
            petitioner initially denied the receipt of any unreported income,                              
            in the alternative, petitioner asks us to include in his income                                
            only those amounts that are represented by checks payable to him.                              




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