Jerry L. Crabtree - Page 37

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             they would withdraw cash from their personal savings                     
             account at AmSouth and would use the money at Justins to                 
             cash customers’ payroll checks.  Petitioners would deposit               
             the customers’ paychecks into Crabtree Investments’                      
             business account at First Union, write a check for cash in               
             that amount, and start the process at Justins over again.                
             Eventually, they would redeposit the original amount of                  
             money into their personal savings account at AmSouth.                    
                  As mentioned above, virtually all of Crabtree                       
             Investments’ original records were destroyed by fire.  As                
             a result, we cannot fully evaluate petitioners’ assertion                
             that they used cash from their personal accounts in the                  
             bar.  Our analysis of the statements from petitioners’                   
             individual checking accounts tends to support petitioners’               
             explanation.  Furthermore, the bank account statements                   
             suggest that the individual petitioners were losing money                
             during the years in issue.  In 1994, they deposited the                  
             “surrender proceeds” from shares in “The Growth Fund” in                 
             the aggregate amount of $41,584.87, and Mr. Eddie Crabtree               
             deposited a check for $25,790.65, apparently the proceeds                
             from the sale of real property.  Nevertheless, during the                
             years in issue, the balance in the account went from                     
             $82,284.35 to $9,274.19.  Respondent does not assert that                
             the withdrawals from the joint bank accounts increased the               

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Last modified: May 25, 2011