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newly hired chief officer to be treated equally. When Sister
Feeley learned from Ms. Grega and Ms. Carapico that Mr. Marzullo
was still taking payments from the accounts payable account, she
contacted Mr. Marzullo, who then terminated the arrangement. A
Form 1099 reporting payments Mr. Marzullo received from the account
was issued for 1989.
Mr. Marzullo knew that the payments from the accounts payable
account were taxable, and he deliberately did not have the omitted
income included in the payroll account and on his Form W-2.
Criminal charges were filed against Mr. Marzullo in 1992, and he
pleaded guilty to tax evasion for 1987 in the U.S. District Court
for the District of Maryland.
Video Production Business
Mrs. Marzullo started MPM, a video production business, in
January 1987. MPM was operated as a sole proprietorship until
August 31, 1987, when it was incorporated. Mrs. Marzullo received
51 percent of the stock and Mr. Marzullo received 49 percent,
although the business essentially belonged to, and was operated by,
Mrs. Marzullo.
Mrs. Marzullo had experience in the production of videos
before starting her own business. She made contacts with potential
customers and submitted proposals for video production jobs. She
determined the price to be charged for each contract. When she
acquired a contract, Mrs. Marzullo wrote the script, produced and
directed the video, and supervised every aspect of its preparation.
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