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manufacturers, it used a two-tier payment system only with Shin.
No other manufacturer ever requested that Eastimpex pay for goods
with two payments. In addition, none of the other manufacturers
provided an invoice for an amount less than the amount that
Eastimpex paid for goods.
The Coast and First Pacific accounts were subject to
periodic reconciliations by Eastimpex and Shin to ensure the
deposits were being made. However, Lily or Priscilla held the
passbooks from the Coast and First Pacific accounts, and no one
at Shin ever saw the passbooks. Shin never received any bank
statements concerning the accounts from Coast or First Pacific.
Shin did not record the deposited amounts as income on its books
and records although it recorded the invoice prices as income.
The Coast and First Pacific bank accounts were not listed as
assets on Shin's books and records. In addition, Shin reported
only the invoice price as income to the Taiwanese Government.
Petitioner husband knew that Shin did not report the deposited
amounts as income.
The Coast account was opened on August 6, 1986, in the name
of "Shin I Food Co."4 with Edward and Ken Chen, Shin's principal
accountant, as signatories. Coast bank was chosen by petitioner
husband because it was convenient to Eastimpex's office for
4 The account number for the Shin I Food Co. at the Coast
Savings and Loan in San Francisco changed twice after it opened
and became a term account. The signatories and account name
remained the same. The term "Coast account" refers to all of
these accounts.
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Last modified: May 25, 2011