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During 1990 and 1991, CDI wrote 3,863 and 4,088 checks,
respectively, for business expense disbursements. Either
petitioner or Mrs. Carlstedt, in petitioner's absence, signed all
of the checks, as petitioners had sole signature authority on
CDI's bank accounts. The checks were prepared by the accounting
department, and related invoices and payment vouchers were
attached thereto before the checks were presented for signature.
On occasion, petitioner returned checks to the accounting
department for further explanation before signing them. For
example, on or about February 12, 1991, petitioner returned a
check to the accounting department for an explanation concerning
an $88.25 expenditure.
Petitioner's Partnership Activities in 1990 and 1991
During 1990 and 1991, a number of Citimark tenants went
bankrupt, and other partnership tenants were dilatory in their
payment of rent. Moreover, the availability of long-term
refinancing in the real estate market had become increasingly
scarce during this period. These developments affected the
partnerships significantly. Approximately $500,000 of interest
payments were due each month on the short-term loans, and the
partnerships also faced the prospect of having to repay the
principal of $40 million in December 1991.
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