- 14 -
petitioner's New York State criminal trial, was alleged to have
been embezzled by petitioner from his clients and the total
additional $1,375,000 that petitioner received through his check-
kiting scheme, by forging checks on the New Gold account, and as
loan proceeds from William Marion.
The schedule below reflects petitioner's Federal income tax
returns as filed as well as the adjustments determined by
respondent for each year:
1988 1989 1990
Tax Return Reported Losses ($ 1,650) ($ 2,651) ($ 94,292)
Respondent's Determinations:
$7,003,000 Embezzlement Income As
Alleged In State Court --
Gabrielle Votano 741,000
Marion Family Trusts 4,087,000
Ira Saferstein 975,900*
Judith Ripps 1,200,000
$1,375,000 In Additional Income
Adjustments --
Check Kiting 350,000
Bridgehampton Estates 575,000
William Marion 450,000
Total Adjustments To Income $741,000 $5,062,900 $2,575,000
* As indicated, respondent's notice of deficiency made an adjustment of
$975,900 with regard to petitioner's embezzlement from Saferstein.
Respondent has not explained the $900 difference between the $975,000
petitioner embezzled from Saferstein and the amount of the above
adjustment, and we treat the additional $900 reflected in respondent's
notice of deficiency as having been conceded by respondent.
OPINION
Collateral Estoppel And Petitioner's Embezzlement Income
It is well established that gross income under section 61(a)
includes income earned from illegal activity such as
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011