- 37 -
controlled the employees.
In contrast to the situation of MIT 80, the employee leasing
agreement specifically required Machise to make advances of cash
to MIT 82. These cash advances were to be equal to the actual
costs of meeting the Machise payroll. During 1982, Machise made
these advances by transferring $2,550,150 into the MIT 82 payroll
account so that MIT 82 could cover the payroll costs.
These weekly cash advances took place by means of a transfer
from a Machise bank account to the MIT 82 Guarantee Bank payroll
account. The employees and independent contractors were paid
from this account with MIT 82 checks signed by either Bucci or
Ingemi.12
Payroll taxes were withheld from employees' wages and
remitted to the appropriate State and Federal agencies under MIT
82's employer identification number. The name MIT 82 appeared on
New Jersey unemployment compensation documents. MIT 82 also
appeared as the employer on the employment tax returns that were
12Although not spelled out in the MIT 82 employee leasing
agreement, Fred testified that the payroll procedure was to be
like that in MIT 80, whereby Machise would advance enough money
to cover its payroll in the first 6 months. After July 1, 1982,
when the partners' money came in, MIT 82 would pay over enough
for the entire year's payroll. The resulting difference between
the $3,075,000 allegedly advanced by MIT 82 to Machise and the
$2,550,150 advanced to MIT 82 by Machise resulted in an asset
called "Due from MIT 82-Advanced" in the amount of $524,850.
(This amount was later increased, probably reflecting the
difference between the amounts transferred to the payroll account
and the amount paid from this account.) In subsequent years,
Machise applied alleged payments of compensation fees toward
these advances.
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