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See United States v. Jackson, 983 F.2d 757 (7th Cir. 1993).
Commingling of the kickbacks in the accounts of the conduit
entities, together with other unrelated income, was a device to
hide the kickbacks from Prudential and the IRS, and is evidence
of fraud. See Maddas v. Commissioner, 114 F.2d 548 (3d Cir.
1940).
There is fraud where there is a scheme to "thwart the
effective functioning of the IRS" and where there is an attempt
to disguise the source of income. See United States v. Browning,
723 F.2d 1544, 1547 (11th Cir. 1984). Lisle plainly attempted to
disguise the source of the kickback funds by the manner employed
in sending the moneys through a roundabout method over a period
of many years through Kanter's conduit entities. To be sure, the
movement of the moneys had no legitimate business purpose, as
demonstrated by the evidence.
The use of nominees, placing money or property in the name
of another, is indicative of fraud. See United States v.
Peterson, 338 F.2d 595 (7th Cir. 1964); Furnish v. Commissioner,
supra, where the Court of Appeals stated that "Concealment by
itself is indicative of a willful intent to evade income taxes."
Lisle used IRA and later Carlco as a nominee to receive and hold
and conceal the kickback payments he received for his services.
Failure to cooperate with revenue agents during an audit
examination is indicative of fraud. See Bradford v.
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