- 13 -
inconsistent explanations of behavior, concealment of income or
assets, filing false documents, engaging in illegal activities,
and attempting to conceal illegal activities. Niedringhaus v.
Commissioner, supra at 211. The sophistication, education, and
intelligence of petitioner are also relevant in determining
fraudulent intent. Id. A willingness to defraud another in a
business transaction may point to a willingness to defraud the
Government. Solomon v. Commissioner, 732 F.2d 1459, 1462 (6th
Cir. 1984), affg. per curiam T.C. Memo. 1982-603. Although no
single factor is necessarily sufficient to establish fraud, the
existence of several indicia is persuasive circumstantial
evidence of fraud. Beaver v. Commissioner, supra at 93.
The record in this case is replete with evidence of these
"badges of fraud". Petitioner was a knowledgeable taxpayer but
understated, in substantial amount, his gross income for 1989.
He embezzled HUD funds and attempted to cloak his activities with
a protracted and integrated course of actions designed to conceal
the embezzlement income. Specifically, petitioner forged
numerous documents, received embezzled funds, and embezzled more
money to repay the previous embezzlement. Petitioner disguised
his participation in HUD loans by using false identities,
including those of Rand, American Products, Cortez, Johnson
McGee, and HRW. Moreover, petitioner's explanation of the
transactions is implausible, and his testimony regarding his
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011