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Lynch stole some of the estate's funds, petitioner relies mainly
on fragmentary and confusing evidence that Lynch acted without
lawful authority and converted to his own use assets and funds of
the estate. This evidence is insufficient, and we reject it.
Moreover, petitioner abandoned all efforts to collect refunds due
the estate from Lynch and Reardon.
Lynch was an attorney hired by the estate for the particular
task of locating and recovering securities stolen from Philip.
He enlisted Reardon to assist him in accomplishing the task
assigned, and they were successful in doing so.
Petitioner principally relies upon the proceedings before
the Orphans' Court to support its allegation of theft. We have
perused the entire record of the Orphans' Court litigation to
find any mention of "theft". There is none. Terms such as
"overreaching", "ethical considerations", "failure to keep
adequate records", and "noncooperation" are all indicia of
shortcomings on the part of Lynch, but they fall far short of
establishing the "thieving state of mind" required to establish
the crime of "theft" under Pennsylvania law.
Petitioner's attempt to convert a fee dispute into a
criminal act of theft in order to reduce its taxable estate is
unpersuasive. Therefore, we hold that petitioner's claimed theft
loss deduction must be denied.
Issue 2. Attorney's Fees
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