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amounts transferred into the nursery bank account from the B&D
account totaled $187,000.
At various times during the years in issue, Mr. Gandy made
statements to petitioners’ employees, relatives, and friends to
the effect that he was "sticking it to Uncle Sam" and "going to
beat the government" and that "the only way to get ahead was to
steal from yourself and cheat the government, or not to show my
cash transactions, you know, in business."
The Lake House
At some point prior to January 1985, Mr. Gandy cosigned a
loan for Doug Christensen (Christensen). The security for this
loan was a property known as the lake house. Christensen failed
to make payments, and the bank foreclosed on the mortgage.
Petitioners borrowed $115,000 from Lindale State Bank on
January 10, 1985, and, of that amount, used $99,027.67 to redeem
the lake house; the remaining $15,972.33 went to pay off a loan
of $15,000 that Mr. Gandy had borrowed from Lindale State Bank on
January 16, 1984.
Petitioners made the following payments on the loan from
Lindale State Bank, all of which were made in cash:
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