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the Resyn bankruptcy for $200,000 after 1970. She later received
37-1/2 cents per dollar of claim. Petitioner had not repaid
Resyn by the time of the bankruptcy trial in 1981.
Resyn did not report paying any dividends from 1963 to 1970.
C. Polymer Chemicals
1. Formation of Polymer Chemicals
Petitioner suggested that he and Levenson form a partnership
called Polymer Chemicals (Polymer). On September 17, 1954,
Levenson registered the trade name Polymer Chemicals with the
State of New Jersey under his name alone. The trade name
certificate stated that Polymer's address was 152 Clinton Avenue,
Newark, New Jersey, which was Levenson's office. Polymer never
did business at that address. Polymer had a checking account at
the National State Bank, Hillside, New Jersey, from 1963 to 1970.
Although Levenson was authorized to sign checks on the Polymer
account, petitioner directed him to sign and endorse blank
Polymer checks. Levenson never saw the proceeds from these
checks.
The monthly bank statements did not include a mailing
address for Polymer. Petitioner went to the bank to get
Polymer's bank statements and canceled checks. Polymer did not
file Federal income tax returns.
2. Polymer Transactions
Unlike other Resyn transactions the Polymer purchase
invoices did not include any bills of lading. Resyn's checks to
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