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business expenses) to be deposited in the First Citizens
accounts.
Only Mr. and Mrs. Reaves were authorized to sign checks and
make withdrawals from the First Citizens accounts. The Social
Security number on the signature card for the S&J account was not
that of Mr. or Mrs. Reaves.
Wright and Lawson knew about the First Citizens accounts.
They balanced the S&J account but not the George K. Reaves
account. During the years in issue, Mr. and Mrs. Reaves, Wright,
and Lawson (in 1988) signed Reaves Livestock account checks which
were deposited in the First Citizens accounts. Wright and Lawson
recorded those checks as purchases on Reaves Livestock's books.
Wright and Lawson stored the checkbooks, canceled checks,
and bank statements for the Reaves Livestock account and the
First Citizens accounts in a filing cabinet in the storage room
at Reaves Livestock's office. The filing cabinet doors were open
during the day.
The deposits in the First Citizens accounts totaled as
follows:
Reaves S&J
Year account account
1984 $29,010 $9,937
1985 27,744 110,041
1986 68,052 149,162
1987 105,541 238,185
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Last modified: May 25, 2011