Edward Nathan Levine - Page 20

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               Petitioner and Logan agreed to meet at a restaurant in                 
          Emoryville, California, to further discuss the transaction.                 
          Logan brought an undercover DEA agent who was posing as a drug              
          distributor with him to the meeting.  Petitioner met with Logan;            
          however, he did not agree to purchase the marijuana, because he             
          recognized immediately that Logan's confederate was a Government            
          agent.                                                                      
               Petitioner argues that the fact that he did not purchase the           
          marijuana is proof he was not involved in the business of buying            
          and selling illegal drugs.  We disagree.  In the recordings,                
          petitioner's response to Logan's initial offer to sell him the              
          marijuana was, "I've got people bugging me about that exact                 
          material right now and I ain't got a line on it."  Petitioner's             
          statement indicates that he had an existing customer base that              
          depended on him as a source for marijuana.  Thus, the evidence              
          supports a finding that although petitioner was in the business             
          of buying and selling marijuana, he was not interested in buying            
          it from a DEA agent posing as a drug distributor.                           
               We have stated that we doubt petitioner's credibility and              
          that we find his story of the source of the unreported income               
          implausible.  Furthermore, we find that the evidence supports               
          respondent's contentions that the likely source of petitioner's             
          unreported income was the sale of illegal drugs.  Accordingly, we           
          find that respondent has met his burden of proving an                       
          underpayment by clear and convincing evidence.                              




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