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for corporate purposes of Renaissance. Respondent's only witness
to this transaction was Mr. Klein. Mr. Klein testified that the
"assorted jewelry items" on the F&M receipts probably referred to
personal jewelry items; i.e., one-of-a-kind creations. He also
testified that the receipt dated December 12, 1983, listing the
purchase as "14K gold watch cases" was not the usual type of
invoice form used by F&M and that F&M did not sell watch cases.
This testimony, without more, is not clear and convincing
evidence of diversion of corporate funds by petitioner. Even if
the payment was for personal jewelry items, petitioner contends
that they were business gifts on behalf of Renaissance. Mr.
Klein testified that it is common practice in the jewelry
industry to give personal jewelry items as business gifts and
that petitioner sometimes picked up jewelry items for other
people. If the items were Renaissance business gifts, then the
corporate funds used to pay for them were not diverted for
noncorporate purposes, and petitioner would have no embezzlement
income with respect to them.
One way to prove that the payment was not for corporate
purposes is to show that Renaissance received no value in return
for the payment. However, respondent presented no evidence to
show this. Another way to show that petitioner diverted
corporate funds for noncorporate purposes is to show that
Renaissance public shareholders took legal action against him for
the misappropriation. However, respondent also offered no
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