Investment Research Associates - Page 198




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         preferences, we find the preferences reflected on the                         
         certificates to be ambiguous.  Petitioners failed to produce any              
         corporate resolution.  We can only infer that the resolutions                 
         contradict petitioners' assertions.  Finally, the record                      
         establishes that Kanter was not restrained by corporate                       
         formalities including preferences, stock ownership, asset                     
         ownership, etc.                                                               
              Kanter claims that Carlco's preferred stock was issued to                
         Lisle's family trust to give Lisle more control and discretion                
         with respect to Carlco's investments.  We fail to see how stock               
         that does not have voting control could provide such control or               
         discretion with respect to the assets of the corporations.                    
         Lisle, Ballard, and Kanter, respectively, had unrestricted                    
         control of the assets of Carlco, TMT, and BWK, Inc.  We think                 
         that fact is a strong indicator of the true owners of the assets.             
              On the basis of the record before us, we conclude that                   
         Kanter personally diverted payments of compensation, including                
         those made by the Five for his, Ballard's, and Lisle's services               
         and influence, through IRA, Holding Co., and their subsidiaries.              
         Petitioners formed and utilized all the corporations as a way to              
         conceal their true income for the years at issue.  The record is              
         clear that petitioners used all of these accounts as parts of                 
         incorporated or unincorporated pocketbooks.  The corporations                 








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