AMW Investments, Inc. - Page 9

                                        - 9 -                                         

          guilty to the conspiracy charge.3  Mr. Mohney was subsequently              
          convicted of the remaining charges, and his conviction was                  
          affirmed on appeal.  United States v. Mohney, 949 F.2d 1397                 
          (6th Cir. 1991).                                                            
               Petitioner and all of its related corporations jointly                 
          agreed to pay the legal fees of any officer, employee, or                   
          business associate called as a witness before the grand jury or             
          any proceeding stemming therefrom.  The legal expenses that were            
          claimed by petitioner (and that are in issue herein) were the               
          amounts that it paid to the Fund, which was an escrow account               
          that was established by MBS in 1985 to administer this agreement.           
          The Fund was a separate, interest-bearing account.  MBS                     
          maintained the Fund’s cash receipts journal, cash disbursements             
          journal, and check book registers.  There were no written                   
          agreements prepared and signed contemporaneous to the                       
          establishment of the Fund.                                                  
               Petitioner made monthly payments of $200 to the Fund.                  
          During petitioner’s 1985 through 1990 taxable years, petitioner             
          made payments to the Fund totaling $11,400.  During its 1989                
          taxable year, petitioner paid $1,948 to the Fund.  The amounts              
          paid to the Fund were recorded by petitioner in a prepaid asset             
          account and were not deducted by petitioner until the amounts               

               3 Mr. Klein was later convicted of this charge.                        

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011