Barry B. Bealor and Nancy L. Bealor, et al. - Page 105

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          period July 1, 1983, through July 1, 1984.   Additionally, in               
          1983, Bucci, as president of "MIT" (which we are calling                    
          "Machise") verified the employment of one of its drivers to a               
          mortgage company.  MIT 83 was, however, listed as the employer on           
          workmen's compensation claim forms.  Machise's controller did not           
          remove Machise from the workmen's compensation policy; he just              
          added the name of the new lessor partnerships to the policy.  He            
          did not, however, remove the previous partnership names for                 
          several years, “just to be sure”.                                           
               MIT 83 paid $2,528,416 to employees and independent                    
          contractors and taxing authorities.  It paid out additional                 
          professional and bank fees, pension expenses and workmen's                  
          compensation, health, and group life insurance premiums.  In                
          addition, on December 22, 1983, MIT 83 issued a check to MITA, in           
          the amount of $363,000, as the total management fee due under the           
          management contract.16  The total paid by MIT 83 during 1983 was            
          $3,080,528.                                                                 
               Under its cash method of accounting, MIT 83 claimed a net              
          loss of $3,066,626, which was the excess of the $3,080,528                  

          16The check was drawn on the Guaranty Bank account and                      
          signed by Bucci.  The amount was recommended by Fred.  The                  
          balance in the MIT 83 account when this check was written was               
          $86,327.79.  Fred intended this check to circle back into the MIT           
          83 account.  On the day this check was issued, MITA endorsed it             
          to Machise as payment of an alleged guaranty fee and the advance            
          by Bucci to Machise to reduce his account.  Machise endorsed the            
          check back to MIT 83 as part of the advances required under the             
          employee leasing agreement.  On the day the check was drawn, it             
          was deposited into the account upon which it was drawn.  The                
          check, in effect, funded itself.                                            



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