Robert E. Iles and Monica M. Iles - Page 13

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          respectively.7  By memorandum dated September 13, 1982, SSI’s               
          controller, Tom Basti, hereinafter sometimes referred to as                 
          Basti, listed petitioners’ income from SSI for 1981 and for the             
          first 6 months of 1982 as $206,336.60 and $437,592.15,                      
          respectively.                                                               
               SSI’s principal bank account was in Central Trust Co.; it              
          was used primarily as a depository for Chartered Representative             
          Fees and SSI client funds.  SSI also had accounts in other banks.           
          In 1981, 37 checks and 1 wire transfer, totaling $129,285.67,               
          were drawn on SSI’s Southern Ohio Bank account to petitioners or            
          to third parties on petitioners’ behalf; the entire amount was              
          1981 income to petitioners.8                                                

               7    Monica’s memorandum states that the report was prepared           
          on a cash basis.  This one-page memorandum was introduced through           
          Monica on direct examination by respondent.  Later the same day,            
          on cross-examination by Robert, Monica testified that SSI used an           
          accrual method of accounting; we have so found.  The parties have           
          stipulated, and we have found, infra, that SSI prepared and                 
          maintained substantially all of its books and records                       
          contemporaneously.  We have not found in the record an                      
          explanation of why Monica would have produced a cash basis report           
          while contemporaneously maintaining, or overseeing the                      
          maintenance of, accrual basis records.                                      
               8    The parties’ stipulation lists 40 checks and 1 wire               
          transfer.  Respondent’s proposed finding omits three of the                 
          checks.  We treat this as respondent’s implicit concession of the           
          $8,797.39 total of these three checks.                                      
               Respondent’s proposed finding lists each of the remaining 37           
          checks and 1 wire transfer, but incorrectly shows the total                 
          amount as $120,285.67.  The parties stipulated to the amount of             
          each check and wire transfer.  The $9,000 error in the total                
          probably stems from a transposition of two digits during the                
                                                             (continued...)           




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