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alternative, respondent asserts that, if any of the payments
related to the Prudential and Travelers transactions are not
taxable to Ballard and Lisle, the payments are taxable 100
percent to Kanter.
Respondent maintains that Kanter, in carrying out the
Prudential and Travelers schemes, routed the kickback payments
through IRA and Holding Co., two entities that he controlled, to
conceal from Prudential and Travelers (Ballard's and Lisle's
employers) the fact that Ballard and Lisle were receiving
kickbacks. As a further part of the Prudential kickback scheme,
respondent argues, Kanter later directed and allocated much of
the kickbacks IRA received from the Five to IRA's subsidiaries,
Carlco, TMT, and BWK, Inc., roughly in accordance with the
respective 45-45-10-percent split agreed to by Ballard, Lisle,
and Kanter. In doing this, respondent claims that Ballard,
Lisle, and Kanter each then controlled and managed his respective
share of the kickbacks from the Prudential scheme. Although
Ballard's and Lisle's purported shares of the kickbacks were not
immediately paid to them, respondent asserts that substantial
funds eventually were either paid out or provided to them and
their families through "loans" and "consulting payments" to their
children.
Respondent argues that IRA, its subsidiaries Carlco, TMT,
and BWK, Inc., and Holding Co. were sham or dummy corporations
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