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household expenses, such as groceries, the cleaners, and the
gardeners. Mr. Gherman made weekly deposits into the Joan
Gherman No. 1 account. Ms. Walters recorded $500 in the check
registrar as the weekly deposit amount regardless of the amount
that Mr. Gherman actually deposited into the account. For the
years in issue, Ms. Walters wrote and signed all but one of the
checks issued from the Joan Gherman No. 1 account. Mr. Gherman
or an FIP employee, however, generally balanced the bank
statements for the Joan Gherman No. 1 account, and the bank
statements were mailed directly to FIP's business address. Most
of Ms. Walters' personal expenditures were paid for by major
credit cards. Mr. Gherman paid the credit card bills from a
checking account other than the Joan Gherman No. 1 account.
All of the money in the Joan Gherman No. 1 account and the
Joan Gherman No. 2 account came directly or indirectly from FIP.
Ms. Walters had little interest in or awareness of the
financial dealings that Mr. Gherman carried out in her name. She
had absolute faith in Mr. Gherman's business judgment and
followed his instructions without question. She would and did
sign any document that he asked her to sign.
The Embezzlement
During August 1988, Mr. Gherman, suddenly and without any
warning, abandoned his family and fled the United States to
Taiwan. Until he was arrested, Ms. Walters did not know his
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