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Funds Transferred
Taxable Year to Rubbik
1988 $1,135,745
1989 1,061,050
1990 763,790
1991 87,050
Total $3,047,635
Petitioner transferred the above funds to Rubbik pursuant to
five written “consulting” agreements between petitioner and
Rubbik under which Rubbik agreed to provide consulting services
to petitioner relating to the modifications to be made to
Gamesa's products to make them suitable for sale in the United
States. These agreements were signed by officers of petitioner
at the direction of de la Garza, and the agreements were not
negotiated at arm’s length.
The services mentioned in the above consulting agreements
were to be performed primarily by Gamesa employees in Mexico, not
by employees of Rubbik.
The funds transferred by petitioner to Rubbik were deposited
by de la Garza into Rubbik’s bank account with Citibank in
Houston, Texas. For the years in issue, de la Garza was Rubbik’s
only employee, and he held sole signature authority over Rubbik’s
bank account.
Most funds withdrawn from Rubbik’s bank account during the
years in issue were transferred to Koala Corp., Ltd. (Koala
Corp), a trust that was indirectly wholly owned by Santos de
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Last modified: May 25, 2011