James E. and Chung H. Peacock - Page 41

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          reviewed any daily sheets, yet K.C. Urbon gave the sauna expense            
          records to petitioner-wife.  Petitioners contend that petitioner-           
          wife was too sick to run the business and that she did not visit            
          the saunas after 1982.  However, the masseuses testified that               
          petitioner-wife visited the saunas after 1982.  Petitioners'                
          claim that $400,000 of their cash on hand on December 31, 1982,             
          came from Wilma MacFarland, Tobey Peacock, and MacFarland is                
          implausible.                                                                
               Petitioner-wife admitted that she lied to U.S. immigration             
          officials so her relatives could enter the United States.                   
          Petitioner-husband testified that he made money in Vietnam on the           
          black market and by skimming cash from slot machines.                       
          Petitioner-husband testified that when his father died, he                  
          removed $50,000 from his stepmother's property without telling              
          her.  Both petitioners instructed the masseuses not to tell                 
          others of the correct amount of income they earned.  Petitioners'           
          testimony frequently was implausible, inconsistent, or showed               
          that they had a propensity for unscrupulous behavior.                       
               This badge of fraud applies to both petitioners for each               
          year in issue.                                                              
                    f.   Dealings in Cash and Cashier's Checks                        
               Petitioners dealt extensively in cash to avoid scrutiny of             
          their finances, a factor which can suggest fraud.  Bradford v.              
          Commissioner, 796 F.2d at 308.  Petitioner-husband used cashier's           






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