- 7 -
bank records. The Lees and Ms. Lee were arrested, and a
resulting seventy-six count grand jury indictment was filed in
the New York County Supreme Court against them and Hamalee with
respect to the period April 1, 1985 through December 31, 1989.
Pursuant to a Plea Agreement dated September 11, 1990, the Lees
and Hamalee (through its president, Mr. Lee) pleaded guilty to a
felony charge of evading New York City corporate tax for
Hamalee's 1988 taxable year. Mr. Lee, both individually and on
behalf of Hamalee, also pleaded guilty to a felony charge of
filing a false and fraudulent New York State franchise tax return
for Hamalee's 1986 taxable year. Hamalee was ordered to pay
$125,000 in restitution of New York State and City taxes, Mr. Lee
was given a 1 year custodial sentence, and Mrs. Lee was given a
non-custodial sentence.
Respondent audited petitioners for the subject years. She
referred to Hamalee's actual books and determined that Hamalee
failed to report sales of $4,812,404, $4,623,455, $3,229,199, and
$4,589,694 for its 1985 through 1988 taxable years,
respectively.3 She referred to industry standards and determined
3 Respondent also determined that Hamalee had unreported
purchases in each year. These additional purchases are not at
issue here.
Page: 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