Paul L. Tregre, Jr. - Page 18

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               The expenses used to offset the kickback payments are                  
          attributable to petitioner's alleged activity on behalf of Besco.           
          This is implicit by petitioner's use of the Schedule C to                   
          identify the income received from Besco and to claim the alleged            
          expenses as deductions against such income.  Respondent, however,           
          has established through the credible testimony of both Tubre and            
          Kahn that petitioner did essentially nothing on behalf of Besco             
          outside ASI during the years at issue.  Much the same can be said           
          with respect to petitioner's activity within ASI.  Aside from               
          causing the paint department to purchase chemicals from Besco,              
          petitioner did little else not required by his position.  At                
          best, the friendship between petitioner and Tubre facilitated               
          Tubre's activity throughout ASI by making access to the facility            
          easier than Tubre would have otherwise experienced absent such              
          friendship.  Further, respondent has shown that Besco did not               
          consider the payments it made to petitioner to be anything other            
          than kickbacks tied exclusively to the purchases of Besco                   
          products made by the paint department.  Petitioner's contention             
          otherwise is not convincing.  Tubre viewed the payments as                  
          kickbacks when he sought advice regarding such payments from                
          Besco's accountant.  In fact, that the payments would be                    
          considered kickbacks was his principal concern.  Besco,                     
          nonetheless, followed the accountant's advice and packaged the              
          payments in a disguise.  Yet simply disguising the payments as              
          commissions did not convert them into commissions.                          




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