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Approximately one-half of this money that was deposited in
the Cayman Islands account was from activities related to leasing
aircraft to persons engaged in the smuggling of marijuana.
The funds petitioner deposited into the Bank of Nova Scotia
were used to purchase interest-bearing certificates of deposit.
During 1978, 1979, 1980, 1981, 1982, and 1983, these certificates
of deposit earned interest in the amounts of $90,891, $294,835,
$403,607, $588,847, $401,337, and $160,502, respectively.
Petitioner intentionally omitted the interest earned on his
money on deposit in the Cayman Islands account from his 1978
through 1983 Federal income tax returns.
Cayman Islands Corporations
Cayman Aviation Finance was a Cayman Islands corporation
that petitioner used to buy and trade airplanes. Cayman Aviation
Finance owned a Mercedes Benz that petitioner drove and a
condominium in North Carolina. Petitioner also had $486,000 in
an account at the Bank of Nova Scotia titled in the name of
Cayman Aviation Finance which he considered his money.
Kompas Corp. was another Cayman Islands corporation used by
petitioner. Kompas Corp. owned a house located at 3060 N.E. 40th
Street in Fort Lauderdale, Florida. Petitioner acquired this
house in 1981 or 1982. Petitioner purchased the stock of Kompas
Corp. and left the title to the house in the corporation's name.
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