AJF Transportation Consultants, Inc., et al. - Page 9

                                        - 9 -9                                        

               Year                Amount Cashed by Ferrentino                        
               1988                $26,457.17                                         
               1989                26,163.56                                          
               1990                148.34                                             

               AJF maintained a cash disbursements journal which tracked,             
          among other things, fuel expenses, but the journal did not                  
          account for fuel reimbursements from J.C. Penney.  Employees of             
          AJF would prepare an invoice entitled Fuel Billing which would be           
          sent to J.C. Penney for fuel reimbursement.  These Fuel Billings            
          also included amounts for tolls and truck repairs.  AJF's                   
          accountants would use the cash disbursements journal to prepare             
          AJF's tax returns and financial statements.                                 
               AJF claimed deductions for "gas, oil and tires" expenses in            
          1988 and 1989 in the amounts of $184,621 and $183,651,                      
          respectively.  In 1990, AJF claimed a deduction for fuel expenses           
          of $195,035.  AJF did not include any amounts relating to fuel              
          reimbursements in gross income.                                             
          Ferrentino's Cash Hoard                                                     
               AJF maintained a business operating account at Manufacturers           
          Hanover Trust Co. (subsequently purchased by Fleet Bank).                   
          Ferrentino cashed checks on approximately a weekly basis, usually           
          averaging $7,000 to $9,000 per transaction and paid in $100                 









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