Haralampos Katerelos and Irene Katerelos - Page 49

                                                 - 49 -                                                   

            the mere failure to report income is not sufficient to establish                              
            fraud.  Petzoldt v. Commissioner, supra at 700.                                               
                  The record in this case establishes, inter alia, that                                   
            (1) Mr. Katerelos substantially underreported the gross receipts                              
            of NDV for each of the years 1987 through 1990; (2) he activated                              
            the Z or reset mode on the cash register more than once on a                                  
            number of days during each of those years, but reported the total                             
            sales from only one such Z reading on those days as the amount of                             
            gross receipts of NDV even though he knew he was required to                                  
            report the transaction totals of all sales made by NDV as gross                               
            receipts for those years; (3) during each of the years 1987                                   
            through 1990, Mr. Katerelos discarded the portions of the cash                                
            register tapes that he did not utilize to calculate the amounts                               
            of gross receipts that he recorded in the gross receipts journal                              
            for each such year; (4) Mr. Katerelos discarded all of the guest                              
            checks for the years 1987 through 1990; (5) Mr. Katerelos pro-                                
            vided his accountant with only the gross receipts journals and                                
            the portions of the cash register tapes that he saved and uti-                                
            lized to calculate the amounts of gross receipts that he recorded                             
            therein; (6) the pattern of missing transactions repeated itself                              
            on a regular basis during each of the years 1987 through 1990                                 
            until September 1990 when Mr. Phielix first confronted petition-                              
            ers concerning his analyses of the cash register tapes; (7) Mr.                               
            Katerelos provided implausible explanations as to the nature of                               
            the missing transactions and as to why the cash register tapes                                



Page:  Previous  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  Next

Last modified: May 25, 2011