Investment Research Associates - Page 236




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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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