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would endorse back to petitioner. Petitioner would give the
laborers cash in return for the checks. The checks were drawn on
different partnership accounts and were often left blank in
amount. Petitioner instructed his secretary to write a specified
dollar amount on the front of the checks that exceeded the amount
of cash paid to laborers. The checks were cashed on the
following day at BancOhio. Petitioner had an arrangement with
BancOhio whereby the checks could be cashed without his
endorsement.
Some of the checks drawn on the partnership accounts were
for services that were not performed by the persons who endorsed
the checks. For example, the record reflects notations on
several checks for "cleaning" services. The record further
reflects that these checks were actually yearend bonuses paid to
petitioner's secretaries. Some of the checks were in payment of
petitioner's personal expenditures. For example, petitioner
caused checks to be drawn from his partnership accounts to pay
for supplies for his Arabian horses. The checks, however,
reflect that payment was made for "duck feed" for a duck pond on
one of the partnership's properties.
The inflated checks written on partnership accounts and
other payments made from partnership accounts for personal
expenditures are part of the basis of the increased partnership
income determined by respondent and not disputed by petitioner.
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