Leo N. Levitt and Ruth G. Levitt - Page 30

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                    Thereafter on October 4, 1967, Spencer-Kellogg                    
               shipped 31,010 pounds of raw linseed oil to Atlas Paint                
               Company and billed Resyn $4,080.92 for this shipment.                  
               Again, a Chemical Traders' invoice dated, inter alia,                  
               October 4, 1967 bills Atlas Paint Company for 31,010                   
               pounds of raw linseed oil.                                             
                    In addition to understating income through the use                
               of the Chemical Traders' trade name, Resyn overstated                  
               the cost of goods sold by the use of the Polymer                       
               Chemicals' trade name.                                                 
                    As noted above, Polymer Chemicals maintained a                    
               bank account at the National State Bank of Elizabeth,                  
               New Jersey where the authorized signatory on the                       
               account was Harry Levinson.                                            
                    The record fails to disclose that Polymer                         
               Chemicals maintained offices, engaged in any business                  
               venture, had any employees, was incorporated as a                      
               company in New Jersey, paid any New Jersey state                       
               corporate taxes or any federal corporate taxes or filed                
               any such tax returns.                                                  
                    Irving Becker, employed by Resyn since 1967 as                    
               an expediter of deliveries to Resyn customers and as                   
               credit manager, was familiar with all of Resyn's                       
               suppliers.  He testified that he was not familiar with                 
               Polymer Chemicals and knew nothing of the Polymer                      
               Chemicals' account.  A world-wide survey of companies                  
               which deal in the chemicals purportedly sold by Polymer                
               Chemicals to Resyn showed that none of them had any                    
               knowledge of a company called Polymer Chemicals.  There                
               is not a scintilla of evidence in the record indicating                
               that Polymer Chemicals could or did deliver the large                  
               quantities of chemicals to Resyn for which it received                 
               payment from Resyn.  In fact, the bookkeeper for Resyn                 
               testified that when she prepared a bill for payment,                   
               she would ordinarily receive an invoice and shipping                   
               documents but that when she received a Polymer                         
               Chemicals' invoice for payment, it was never                           
               accompanied by shipping documents.                                     
                    From 1963 through 1970, numerous checks totaling                  
               $603,458.84, were drawn on the Resyn bank account                      
               payable to the order of Polymer Chemicals.  The Resyn                  
               checks were signed by Leo Levitt and were deposited in                 
               the Polymer Chemicals' bank account.  The breakdown of                 
               the checks deposited is as follows:                                    

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