Big Hong Ng - Page 12

          which she partially owned in the United States.  The withdrawals            
          occurring  from  1986  through  1989  fall  into  three  general            
               * $491,752--transferred directly to Ms. Ng's personal bank             
          account in the United States or to American Express to pay her              
          personal American Express bills;                                            
               * $535,012--paid for the direct benefit of U.S. restaurants in         
          which Ms. Ng had an ownership interest; and                                 
               * $1,920,158--no information provided.                                 
               In February 1991, Ms. Ng resigned from her position at Ocean           
          City HK and transferred a portion of her stock ownership to her             
          son.  This was apparently done as a result of a controversy                 
          concerning her use of the tip account.  The managing director of            
          the restaurant, Jack Lee, also resigned and transferred ownership           
          of all of his stock to Ms. Ng's son in February 1991.  Ms. Ng and           
          Mr. Lee had been business partners since 1965.                              
               Sometime in 1990 or early 1991, Ocean City HK was reorganized          
          and new owners were brought into the business.  In May 1991, a              
          newly constituted board of directors decided to close the tip               
               The accounting firm of KPMG Peat Marwick (Peat Marwick) was            
          employed to conduct a financial audit of Ocean City HK for the year         
          ending March 31, 1991. James Arkoosh, Peat Marwick's Hong Kong              
          resident partner, testified that the tip account was included as an         
          asset of Ocean City HK on its balance sheet for the year ended              
          March 31, 1991.  He did not know whether the tip account had been           

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