Carolyn M. Lee - Page 3

                                                -3-                                                   
                        with the Logistics Department, Food Subsistence                               
                        Section at Camp Lejeune, North Carolina.                                      
                  (b) In connection with her employment with the Food                                 
                        Service Division, petitioner was responsible for                              
                        collecting money from the mess or dining halls and                            
                        turning this money over to the Base Disbursing                                
                        Office.                                                                       
                  (c) During the taxable years 1988 and 1989, petitioner                              
                        also prepared cash collection vouchers which                                  
                        reflected the total amount of money she turned                                
                        over to the Base Disbursing Office.                                           
                  (d) During the taxable years 1988 and 1989, petitioner                              
                        did not turn all money collected from the mess or                             
                        dining halls to the Base Disbursing Office, but                               
                        instead petitioner misappropriated the amounts of                             
                        $152,513 and $186,094 during the taxable years                                
                        1988 and 1989, respectively, for her use or                                   
                        benefit.                                                                      
                  (e) Petitioner’s joint 1988 income tax return                                       
                        reflected adjusted gross income in the amount of                              
                        $23,632.15.  However, petitioner had unexplained                              
                        deposits to various bank accounts in an amount in                             
                        excess of $89,000 during the taxable year 1988,                               
                        all of which deposits were from the                                           
                        misappropriated funds.                                                        
                  (f) The petitioner and her husband purchased a Dodge                                
                        van in August 1988, for over $15,000 cash, as well                            
                        as real property in March 1988 for $5,500 cash,                               
                        all of which monies were sourced from the                                     
                        misappropriated funds.                                                        
                  (g) During the taxable year 1988, petitioner and her                                
                        husband also purchased two new Honda automobiles,                             
                        a computer, and a used truck, as well as added a                              
                        den to their trailer and vacationed in Germany.                               
                  (h) Petitioner's joint 1989 income tax return                                       
                        reflected adjusted gross income in the amount of                              
                        $20,783.36.  However, petitioner had unexplained                              
                        deposits to various bank accounts in an amount in                             
                        excess of $159,000 during the taxable year 1989,                              
                        all of which deposits were from the                                           
                        misappropriated funds.                                                        





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