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Baybrook opened the Sley Corporations’ mail. For those
bills that came into the office that were readily identifiable,
Baybrook prepared checks as payment; for those bills that she had
questions about, she asked petitioner. Petitioner told Baybrook
which of the Sley Corporations would pay a particular bill;
Baybrook used her own judgment to categorize the expenses on the
Sley Corporations’ books. Baybrook prepared the checks as
payment for bills that came in on a particular day, attached the
bills to the checks, then took the bills and checks to petitioner
so that he could review the bills and sign the checks.
Petitioner closely reviewed the checks that Baybrook prepared
against each underlying bill.
Petitioner usually signed the Sley Corporations checks
prepared by Baybrook. Betsy occasionally signed Sley
Corporations checks. Baybrook generally prepared about 12 Sley
Corporations checks per month as payments for dividends, rent,
telephone, payroll, and travel, although there was heavier
activity in some months. Petitioner signed more than 98 percent
of the Sley Corporations checks that were written from January 1,
1983, thought March 31, 1986.
The invoices that came into the Sley Corporations’ offices
from American Express discussed infra (under Travel and
Entertainment Expenses), were processed a bit differently. These
invoices were addressed primarily to petitioner at his home.
Petitioner usually brought these invoices to Baybrook and told
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