- 52 -
TYE June 30 Commissions Administration Fee Direct Costs
1987 1$210,675 $15,000 $166,829
1988 50,607 60,000 800
1989 272,411 60,000 - 0 -
1We have deducted from the amount of commissions, $225,675,
the amount of $15,000, which represents LTD's administration fees
and which has been recategorized under "Administration Fee" for
taxable year ended June 30, 1987.
f. Client Incorporation and Trust Creation
LTD offered its clients the option of establishing offshore
corporations and trusts to hold their investments. Each client
signed a discretionary authorization granting LTD the power to
invest the funds held by the client’s corporation or trust.
To establish an offshore corporation or trust for a client,
a promoter in Mexico completed a form listing the client’s choice
of jurisdiction, company name, and appointed directors. Such
form was then sent to INC, which passed the information to
outside lawyers or fiduciaries qualified to perform the necessary
paperwork in the chosen jurisdiction.
The incorporation package completed by the lawyers or
fiduciaries was then returned to INC, which returned the package
to the client in Mexico. LTD's role, through the promoters, was
to provide the counseling on the structure and features of the
various incorporation options. Board of directors meetings for
at least two companies incorporated by LTD clients were held at
INC’s offices in San Antonio. LTD's clients used as their
addresses the address of INC’s offices in San Antonio.
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