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meeting of the board of directors of American Silver, the
transfer of the jewelry from Khalaf to American Silver is
referred to as a transfer “for sale by consignment” of jewelry
with “a value of $671,413”.
The trial record does not reflect any further sales or other
disposition by American Silver of the jewelry inventory it
received from Khalaf, nor does it reflect that Khalaf received
any payment from American Silver for the jewelry American Silver
received from Khalaf. The record herein does not contain any
written inventory, documentation, cost records, or other
description or list of the specific items of jewelry that during
the years in issue were bought and sold by Al Zuni, by Khalaf,
and by American Silver, nor of the items of jewelry that were
transferred on September 15 and 24, 1992, respectively, from Al
Zuni to Khalaf and from Khalaf to American Silver.
Twice a year, Khalaf would take a physical inventory of Al
Zuni’s jewelry on hand. Khalaf would provide to Murray Peck
(Peck), the certified public accountant who prepared Al Zuni’s
corporate Federal income tax returns and Khalaf’s individual
Federal income tax returns, information regarding the physical
inventory of Al Zuni’s jewelry that Khalaf had taken and of the
cost of jewelry that each year he had purchased with cash on
behalf of Al Zuni. Each year, Peck would use that information to
compute Al Zuni’s cost of goods sold.
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Last modified: May 25, 2011