- 12 -
During the years in issue, Elvin's purported liability to
YOC on the debit balance of the YOC-Elvin Account was never
reflected by any promissory notes to YOC or by any other loan
documents. Elvin never provided YOC any collateral or security
for, nor was he required to make periodic payments to YOC on, the
debit balance of the YOC-Elvin Account.
During 1983 through 1986, Elvin did not list his purported
liability on the debit balance of the YOC-Elvin Account as a
liability on his financial statements that he prepared and
submitted to banks in connection with personal loan applications.
On occasion from 1977 through 1984, YOC's controllers
advised Elvin that consistent with Elvin's purported liability on
the YOC-Elvin Account, loan documents should be executed,
interest payments should be made, and the outstanding debit
balance in the account should be reduced. YOC's controllers also
advised Elvin that YOC should not pay Elvin's personal expenses.
With regard to interest, during 1983 through 1986, YOC's
accounting system generally automatically charged interest on
debit balances in Account 220 subaccounts that had outstanding
debit balances for more than 30 days. Interest, however, during
1983 and 1984 and in prior years, was not charged on the debit
balance in the YOC-Elvin Account. Not until December 31, 1985,
after Elvin became aware that he was under criminal tax
investigation, did Elvin direct YOC's controller to calculate
interest on the debit balance of the YOC-Elvin Account for 1985
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011