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petitioner with respect to Votano (namely, $741,000 for 1988),
with respect to the Marion Family Trusts (namely, $4,087,000 for
1989), with respect to Saferstein (namely, $975,000 for 19892),
and with respect to Ripps (namely, $1,200,000 for 1990). The
evidence indicates (by, among other things, petitioner's own
acknowledgment in the letter to his clients) that petitioner took
control of these funds and that petitioner, without permission of
his clients, misappropriated these funds and failed to repay his
clients. Petitioner has failed to satisfy his burden of proving
to the contrary. On the facts of this case, we sustain
respondent's determination that the above funds should be charged
to petitioner as taxable embezzlement income for each of the
years indicated.
Petitioner alleges constitutional defects in the State court
criminal trial leading up to his conviction, and petitioner
argues therefrom that, in spite of his conviction and the
restitution order, he should not be estopped in this proceeding
from disputing his receipt of embezzlement income. We disagree.
Petitioner has not established such fundamental flaws in his
State court conviction that the doctrine of collateral estoppel
should not apply to establish that petitioner embezzled funds
from clients. 28 U.S.C. sec. 1738 (1988); Kremer v. Chemical
2 As explained, with regard to Saferstein, the order of
restitution reflected $1 million and respondent's notice of
deficiency reflected $975,900. The amount stipulated by the
parties and that we use is $975,000.
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