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In or after 1990, Willner, along with others, began to
suspect problems with respect to Hardin's activities. Willner
was aware of and believed that he was a beneficiary of the
Superior Court class action commenced against Hardin. During an
Internal Revenue Service (IRS) audit of his 1990 tax return,
Willner claimed and was allowed a theft loss from his involvement
with Hardin, which loss was applied towards tax due and owing for
earlier years.
Respondent's Oceanic Leasing
In 1988, the IRS commenced an audit of Janet Grove (Grove),
who had claimed on her 1986 individual income tax return
partnership losses under the name Oceanic Leasing XXXIII, with
the Sausalito address and EIN 94-2870681. The agent examining
Grove's return thereafter contacted Hardin and commenced an audit
of the Oceanic Leasing Form 1065 for 1986. The agent discovered
that Grove and others had claimed partnership losses based on
Schedules K-1 received from Hardin but not attached to the
Form 1065 filed by Hardin for Oceanic Leasing. Hardin admitted
to the revenue agent that the partnership in which Grove was
involved was a "hoax". Hardin continued to supply information to
the revenue agent. Hardin alternatively referred to Oceanic
Leasing as a single entity, sometimes using the term "Big Daddy",
and referred to separate Oceanic Leasing partnerships by number.
He advised the revenue agent that each partnership had a separate
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Last modified: May 25, 2011