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Eulich, Frey, Schnitzer, and Schaffel (members of the Five
who were involved in the transactions and who testified as
witnesses in these cases) each confirmed that they entered into
the arrangements in exchange for Kanter's using his business
connections and influence to direct business to them. There is
no doubt that the payments were made for Kanter's services and,
therefore, are income to him. The record clearly shows that out
of the payments made to IRA, Kanter agreed to pay (and did pay)
to each of Ballard and Lisle 45 percent of the payments related
to the Prudential transactions, and that he did not share any of
the payments unrelated to the Prudential transactions with
Ballard and Lisle or anyone else.
Furthermore, the record establishes beyond any doubt that
Ballard and Lisle received the benefit of the payments related to
the Prudential transactions. Some of those payments were
distributed to them directly or indirectly through their family
members and their family trusts. Some of the payments were
distributed to Ballard and Lisle through various Kanter-created
"sham" entities and were recorded as loan receivables. Others
were payments characterized as consulting fees made to their
adult children by KWJ Corp. and KWJ Co. partnership.
Kanter entities made the following "loans" to Ballard, his
family members, and entities established for the benefit of
Ballard's family members:
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