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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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