James E. and Chung H. Peacock - Page 9

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          for 2 years thereafter.  She made about $35,000 a year working              
          for petitioners.                                                            
               Young Ju Lee (Young Ju Burnett) worked as a masseuse at the            
          Springfield Tokyo Sauna intermittently from 1978 or 1979 through            
          1983.  She made about $4,000 a month working for petitioners.               
          She is Kiye Oglesby's sister.                                               
               4.   Record Keeping                                                    
               Petitioner-husband brought the daily sheets to Tacoma and              
          gave them to Kil Lee.  Kil Lee reviewed them to see how many                
          masseuses were working, how much money each masseuse earned, and            
          the number of customers each masseuse had.  Kil Lee stored the              
          daily sheets in a file cabinet.  In 1986, petitioner-wife told              
          Kil Lee to burn the daily sheets he was storing.  Thereafter, Kil           
          Lee or petitioner-husband burned the daily sheets after reviewing           
          them.                                                                       
               Rheda Amoroso (Amoroso) worked for Kootz Accounting as a               
          bookkeeper during the years in issue.  She prepared monthly                 
          statements, profit and loss statements, and tax returns for                 
          petitioners.                                                                
               Petitioners prepared weekly receipt reports for each sauna             
          and sent them to Amoroso.  Petitioners did not send the daily               
          sheets to Amoroso.  Amoroso used the weekly receipt reports to              
          compute the Tokyo Saunas' annual revenue and to prepare                     
          petitioners' tax returns.  She did not know that the masseuses              






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