Investment Research Associates - Page 250




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         two highly successful businessmen conspired to conceal millions               
         of dollars of kickbacks, using a multitude of entities with                   
         friends and employees serving as officers of convenience, in an               
         attempt to defraud the employers of Ballard and Lisle and evade               
         taxes properly owed to the Government.                                        
              As each layer of Kanter's complex organization is removed,               
         and the flow of the money is followed, the magnitude of the fraud             
         is revealed.  Kanter's explanations are mere platitudes and                   
         rationalized rhetoric intended to obfuscate the true character of             
         the transactions and his wrongdoing.                                          
         F.   Summary and Conclusions as to Fraud                                      
              The addition to tax or penalty in the case of fraud is a                 
         civil sanction provided primarily as a safeguard for the                      
         protection of the revenue and to reimburse the Government for the             
         heavy expense of investigation and the loss resulting from the                
         taxpayer's fraud.  Helvering v. Mitchell, 303 U.S. 391, 401                   
         (1938).  The facts, as we have found in detail, clearly show that             
         Kanter, Ballard, and Lisle, through the use of various conduit                
         entities, devised a multifaceted scheme to shield kickback                    
         payments they received from transactions involving the Five.                  
         Their fraud resulted in the Federal Government not being paid                 
         several millions in income taxes due and owing.  Clearly, the                 
         Government incurred great expense investigating petitioners'                  








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