- 5 - service.4 At no time during those years did ETS submit invoices directly to FIG for the services that it provided to DCI in connection with DCI's work for FIG. Rather, DCI billed FIG for those services, charging FIG the same amount that ETS had charged it. The Diamonds reported the financial results of ETS in Schedule C of the Federal income tax return (return) that they filed for each of the years 1983, 1984, and 1985, as follows: 1983 1984 1985 Gross receipts $180,787 $199,355 $39,875 Less: Cost of goods sold 62,201 -- -- Plus: Other income 2,312 -- -- Gross income 120,898 199,355 39,875 Less: Expenses 23,945 92,537 -- Net profit 96,953 106,818 39,875 The Farmers Lawsuit The Parties and Their Claims In September 1984, DCI and the Diamonds, who were repre- sented by the law firm of Markowitz & Herbold (Markowitz & Herbold), commenced a lawsuit (Farmers lawsuit) against FIG in the District Court. The plaintiffs named in the Farmers lawsuit were "DIAMOND CLAIMS & INVESTIGATION SERVICES, INC., an Oregon corporation, and PETER J. DIAMOND and SHIRLEY DIAMOND, husband and wife" (plaintiffs). The plaintiffs filed an initial com- 4 The particular information that ETS included in the invoices that it submitted to DCI during the years 1983 and 1984 was based on certain requirements specified by FIG in order to enable FIG to identify the costs associated with the particular investiga- tive projects that it had assigned to DCI.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