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use Dealer Books, MQ-79, of the Company for his
own personal gain. Roberts became involved with
numerous other bogus dealers and/or legitimate
dealers to defraud the U.S. Department of Agri-
culture by selling excess quota or nonexistent
quota. The bogus dealers and/or legitimate
dealers conspired to create nonexistent quota by
entering false purchases on the bogus dealer's
MQ-79 dealer books. The participants then
secured tobacco inventory directly from farmers
who had produced excess farm quota. These were
cash transactions. With the actual receipt of
new tobacco and a MQ-79 dealer book reflecting
legitimate purchases the various bogus and
legitimate dealers were able to sell excess
quota and profit there from [sic].
Respondent admitted that Mr. Roberts engaged in the above
"illegal scheme" but denied that he did so "for his own
personal gain."
In order to describe the scheme further, petitioner
introduced into evidence the report of an agent of the
Internal Revenue Service who audited Mr. Wells' returns
for 1988 through 1991. That report describes the scheme
as follows:
Wells is believed to be a key figure in a
fraudulent scheme within the tobacco industry.
The source of the omitted income is excess
tobacco which is sold via a tobacco dealer card.
Because tobacco is a highly regulated commodity,
the sales of excess tobacco (without imposition
of penalty on the farmer's subsequent year quota)
are illegal. Wells uses individuals and
corporate entities as nominees and/or alter egos.
No one in the conspiracy reports the receipts.
Essentially, the fraud is perpetrated by
fictitious purchases on the tobacco dealer's
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