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In January of 1986, Mr. Beretta invested $30,000 to open a
Peppertree Restaurant in Atascadero, California. Mr. Beretta's
partner in this venture was Garlo Enterprises, Inc., a wholly
owned corporation of Gary Longfellow. Although the Atascadero
Peppertree Restaurant was owned by Garlo Enterprises, Inc., Mr.
Beretta was the primary financial force behind the restaurant.
Garlo Enterprises, Inc., and Mr. Beretta formed a partnership to
operate the Atascadero Peppertree Restaurant. Mr. Beretta
assisted in the preparation of Garlo Enterprises, Inc.’s,
corporate tax returns (Forms 1120) for the years 1986 through
1992.
Mr. Beretta and Mr. Longfellow agreed to split the profits
from the Atascadero Peppertree Restaurant equally. Mr. Beretta
suggested to Mr. Longfellow that they "skim" money from the cash
register in order to avoid paying taxes on any profits from the
restaurant. Mr. Longfellow agreed, and he began removing between
$100 and $200 a day from the cash register, depending on the
restaurant's cash-flow. At the end of the day, Mr. Longfellow
would place Mr. Beretta's money in a bag for Mr. Beretta to come
by and retrieve.
In order to account for the skimmed proceeds, Mr. Longfellow
would make false overrings on the cash register and then remove
an amount of cash equal to the false overring. Therefore, the
skimmed profits were not reported on the restaurant's books.
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