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of conspiracy to commit fraud and numerous counts of mail fraud
and for filing a false 1983 income tax return in violation of
section 7206(1). The indictment, among other charges, alleged
that petitioner, on or about June 29, 1984, filed a materially
false 1983 income tax return by failing to report a substantial
amount of income in addition to that stated on the income tax
return. At the hearing under rule 11 of the Federal Rules of
Criminal Procedure, petitioner admitted that he received and
willfully failed to report a $21,000 management fee. On May 2,
1990, petitioner pled guilty to filing a materially false 1983
income tax return under section 7206(1), and he was sentenced to
concurrent 3-year terms of imprisonment, along with the condition
that he make restitution to the crime victims.
OPINION
This case is factually convoluted because of the maze of
entities, principals, and transactions involved. The primary
factual pattern involves petitioner's odyssey from being a
successful insurance salesman to his involvement in a Ponzi
scheme and, ultimately, to his incarceration. Initially,
petitioner successfully sold insurance to farmers until he became
reinvolved with his insurance business mentor, Roy. Roy, in
turn, introduced Dean Cooper to petitioner. With the
introduction of Roy and Cooper, petitioner's business activity
became complicated. In addition to an S corporation through
which petitioner operated his life insurance agency, Roy's
insurance agency became affiliated with petitioner through and in
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