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weekly cash "advances" to the Guarantee Bank payroll account held
by MIT 80, although it was not required to do so by the employee
leasing agreement.4 These advances were equal to the actual
weekly worker service compensation payments to employees and
independent contractors. The advances were reflected on the
books of MIT 80 and Machise. During 1980, Machise paid
$2,243,495.73 into the MIT 80 payroll account so that MIT 80
could cover the weekly payroll costs for the employees and
independent contractors. Hereafter, use of the term “payroll
costs” includes amounts paid with respect to, or on behalf of,
both employees and independent contractors.
Bucci and Ingemi retained control of the MIT 80 ledger,
although they were not partners in MIT 80. Either Bucci or
Ingemi signed the MIT 80 checks that paid the employees and
independent contractors from the weekly advances made by Machise.
There was also a pension plan in effect for the rank and file
employees. Bucci decided what investments were to be made for
the pension plan, and the comptroller of Machise prepared the
4Fred testified that there was an "oral agreement" that
Machise would advance to MIT 80 the funds needed to pay Machise's
employees and independent contractors for the first 6 months of
1980, until MIT 80 obtained funds from its incoming partner-
investors. Thereafter MIT 80 would repay Machise and deposit
with Machise the estimated amount needed by MIT 80 to pay the
payroll expenses for the second 6 months. As a result, each
week, Machise would pay into the MIT 80 account the amount
needed to meet the Machise payroll. At the end of the year, Fred
explained, "it was all washed out".
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