Anthony J. Marzullo and Mary P. Marzullo - Page 8

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          responsible for designating whether a Form 1099 should be issued            
          for various payments by the College.  Ms. Grega noticed that the            
          payments Mr. Marzullo received had not been designated as requiring         
          issuance of a Form 1099.  She met with the business office manager          
          and the person responsible for payroll to discuss the matter.               
          Shortly after the meeting, Mr. Marzullo telephoned Ms. Grega and            
          asked why she was inquiring about the payments. Ms. Grega                   
          testified:                                                                  
               It seemed fairly obvious why I was doing it; I mean,                   
               those were the procedures that we had to follow.  I                    
               explained again what I was trying to do and asked him if               
               there was anyone at the college who met these criteria                 
               such that something should be reported for them, and he                
               said, no, I should not worry about that, that there were               
               no other benefits, no fringe benefits,  no  other                      
               compensation to report.  * * *  He seemed upset with me.               
               Mr. Marzullo was Ms. Grega's supervisor.  She issued the               
          College's tax information to the IRS for 1988 and certified its             
          accuracy, as he instructed her to do.  She was concerned, however,          
          about the omission of the payments to Mr. Marzullo, and in this             
          regard, spoke with Ms. Carapico, the College's staff accountant, in         
          March 1989.  Ms. Carapico believed the payments should be reported          
          to the IRS.  Ms. Grega and Ms. Carapico then took the matter up             
          with Sister Feeley.                                                         
               Sister Feeley instructed Mr. Marzullo to terminate the                 
          bifurcated salary arrangement in 1986 because no other employee was         
          being paid in that manner.  Moreover, another chief officer had             
          just been hired, and Sister Feeley wanted both Mr. Marzullo and the         





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