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petitioner paid them in cash. During that time, resin cost about
10.5 cents per pound. Petitioner said Atlas paid about 13 cents
per pound and petitioner paid Atlas 3 cents in cash. Petitioner
said he got cash by forming Polymer and depositing in its bank
account the difference between the cost of resin and the amount
that Atlas paid. Petitioner then bought and cashed cashier's
checks. Resyn wrote checks totaling $87,750.12 in 1963, which
were deposited in the Polymer checking account in 1966. A total
of $56,564.76 deposited in the Polymer checking account in 1969
was from checks written in 1968. These delays are inconsistent
with petitioner's theory that he had to make cash payments to
Atlas. It is implausible that the Tepperman brothers would wait
from 1963 to 1966 to be paid.
The Tepperman brothers died before trial was held in this
case. The opinion of the bankruptcy court does not indicate, and
petitioners do not contend, that Resyn raised the business
expense theory at the bankruptcy trial. Petitioner's claim that
he paid all the money in the Polymer account to the Tepperman
brothers is not persuasive.
3. Diversion of Funds to Chemical Traders
Petitioner controlled the Chemical Traders account. He did
not tell his accountants and bookkeepers about it. He withdrew
funds from the Chemical Traders account during each of the years
from 1964 to 1969 to buy stock and did not report those amounts.
He withdrew cash in 1970 and other years.
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