Michael J. Fitzpatrick - Page 6

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          the checking account of Rain & Shine (R&S), a Panamanian                    
          corporation.  The memo blank on each check reflected that it was            
          for "furniture, fixtures and equipment".  These notations were              
          fabrications designed to permit Landing to deduct these                     
          expenditures as business expenses.                                          
               The distribution of the $1 million deposit, of which                   
          $750,000 went to the general partners of Landing and the rest to            
          petitioner, violated the terms of Landing's construction loan               
          from the Bank.  Under the loan agreement, the first income earned           
          by Landing was to have been applied toward paying off the                   
          construction loan to the Bank.                                              
               Petitioner endorsed the $50,000 and $150,000 checks in 1981            
          and 1982, respectively.  Petitioner directed the Panamanian bank            
          to mail R&S's account records to him in the United States.  A               
          small quantity of temporary checks for R&S was mailed to                    
          petitioner at his home.   All checks on the R&S account were                
          drawn by petitioner, using either his name or the fictitious name           
          of Daniel Dunn.  In 1981, a check was drawn on the R&S account              
          payable to petitioner for $45,000.  This check was signed by                
          petitioner as an authorized signatory and was ultimately                    
          deposited to his New York City checking account.                            
               During 1982, disbursements totaling $143,075 were made from            
          the R&S account to the Hill Winery Associates checking account              
          (Hill account) at the Citizens First National Bank of New Jersey,           

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