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An aggregate of more than $4.1 million was deposited into
Kenmore’s Account during Kenmore’s fiscal 1981 and its fiscal
1982. Supra table 5. In addition to the $4.1 million of
deposits into Kenmore’s Account, there was some indeterminate
amount of cash that passed through Kenmore’s safe, and did not
show up in Kenmore’s Account. The one-write bookkeeping system
focused only on Kenmore’s Account. Both Gleave and Broskin used
Kenmore’s Account; the one-write system did not adequately
distinguish among Kenmore, Gleave, and Broskin transactions. As
Heintz and Bohn carried it out, the one-write system used a
miscellaneous column (Gleave account) for any transactions that
(1) they were aware of and (2) did not know how to classify. We
cannot deduce what happened to many of the Gleave account items,
except that we know that Heintz and Bohn put all the Broskin
items that they recognized into the Gleave account. Not only was
the currency in the safe (generally $2,000-$20,000) not recorded
in the one-write system, but also there was not a system to
enable Heintz or Bohn to know how much of the currency belonged
to Broskin and how much belonged to Kenmore or Gleave.
Kenmore’s operations were large enough and varied enough,
and the comingling of Kenmore’s, Broskin’s, and Gleave’s assets
was extensive enough, so that it was obvious that detailed
record-keeping was important. Failure to keep and supply
adequate records may be an indication of fraud. Bahoric v.
Commissioner, 363 F.2d 151, 154 (9th Cir. 1966), affg. T.C. Memo.
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