John Devlin - Page 3

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          Prudential.2  The Prudential clients would write a check made               
          payable to petitioner, and in return the clients would receive an           
          installment note.  The installment note stated that it was for an           
          investment known as Neo Genesis Paradigm, Inc.3  Petitioner would           
          then convert the proceeds from this transaction to his own use.             
          Such transactions occurred on three different occasions from 1991           
          through 1992.  Each time, petitioner targeted an elderly client.            
               On May 6, 1992, petitioner was charged in Denver County                
          Court, Denver, Colorado, with theft from the elderly, fraud, and            
          selling securities without a license.  Petitioner pleaded guilty            
          to attempted fraud and deceit in offering securities, was placed            
          on probation for 16 years, and was ordered to pay restitution to            
          Prudential in the amount of $107,000.                                       
               In the notice of deficiency, respondent determined that                
          petitioner did not file returns for the taxable years 1990, 1991,           
          and 1992.  Respondent also determined that petitioner realized              
          gross income for those years in the amounts of $20,436, $107,301,           
          and $27,381, respectively.4  The gross income determined by                 
          respondent resulted in deficiencies of $2,269, $27,458, and                 

               2In fact, Prudential does not have any connection with                 
          Project Input, Inc., nor does the Colorado Secretary of State               
          have a record of it.                                                        
               3Respondent's first and second requests for admission refer            
          to Neo Genesis Paradigm, Inc. and Neo Genesis.  These are                   
          references to the same entity.                                              
               4Petitioner also did not file individual Federal income tax            
          returns for the tax years 1986-89.                                          




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