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pay him $30,000. Mohney believed that payment of more than this
amount would have been unwise at a time when the company’s
viability was uncertain. The next payment occurred in July 1991.
The amount and form had been decided at some time during the
previous year by agreement between Mohney and Newlands. In
November 1990 Mohney discussed the accounting aspects of the
transaction with David Shindel (Shindel), an independent
certified public accountant who had been retained to oversee tax
compliance for several companies within the Mohney Group.
Hagerman, petitioner’s president and sole member of the board of
directors, had no part in the decision. Newlands, acting as
representative of petitioner’s shareholders, notified her that
petitioner was to transfer to Mohney $274,980 worth of precious
metals--Krugerrands and the like--that it had recently acquired
on Mohney’s instructions; the remaining $65,000 of precious
metals was to be distributed to the shareholders. An attorney
close to Mohney drafted a resolution of petitioner’s board of
directors authorizing the payment. The resolution acknowledged
that petitioner had “availed itself of the expertise, consulting
services and advisory assistance of HARRY V. MOHNEY * * * in
connection with the operation of this Corporation’s retail
business since 1985 * * * pursuant to and in accordance with
agreements reached between said HARRY V. MOHNEY and an authorized
representative of the shareholders.” It stated that the
conveyance of precious metals was “in full and final
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