- 5 -
provided trucking services. As a consultant for Walsh, Mr.
Streck was paid $500 per day for his services.
While serving as a consultant, Mr. Streck diverted funds
from Walsh. Respondent has determined, and petitioners concede,
that Mr. Streck received gross income of $384,750 in 1983,
$382,620 in 1984, and $825,548 in 1985 that petitioners failed to
report on their joint income tax returns for those years.
On June 23, 1988, Mr. Streck was indicted in the U.S.
District Court of New Jersey for violations of sections 1341,
1343, 1961, 1962, 1963, and 2314 of title 18 of the United States
Code in connection with his diversion of funds from Walsh. On
February 27, 1991, Mr. Streck pleaded guilty to fraud under count
11 of the indictment. On November 3, 1988, Mr. Streck was
indicted in the U.S. District Court, Southern District of Ohio,
for tax evasion under section 7201 for the years 1983, 1984, and
1985 and bankruptcy fraud under section 152 of title 18 of the
United States Code. In November 1989, Mr. Streck was convicted
on all tax evasion counts and acquitted on all counts of
bankruptcy fraud. As a result of these convictions, Mr. Streck
was incarcerated from December 8, 1989, to April 15, 1991.8
8Subsequent to Mr. Streck's release from prison, and while
he remained on probation, petitioners moved to Knoxville,
Tennessee. In connection with the refinancing of a house they
purchased in Knoxville, Mr. Streck prepared a false document
purporting to be a release of a Federal tax lien. On July 3,
1996, in the Criminal/Circuit Court of Knox County Tennessee, Mr.
Streck pleaded guilty to a theft in excess of $60,000 from his
(continued...)
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