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For Simco’s June 30, 1991 fiscal year, the review and compilation
was prepared by Judy Zaremba and Jane Brodsky. Ms. Brodsky
discussed the review and compilation with Mr. Boyer. In
addition, because she was aware that firms with operations
similar to Simco’s commonly have scrap metal sales, she raised
the question of scrap metal sales with Mr. Boyer. Ms. Zaremba
prepared a checklist, dated October 10, 1991, explaining some of
the reporting requirements used in the review and compilation.
Ms. Brodsky added the following handwritten note to the
checklist: “Scrap sales will be looked into by Wayne’s client”.
However, following the review and compilation, Mr. Boyer did not
raise the issue of scrap metal sales with anyone associated with
Simco.
Dix Scrap was audited by the Internal Revenue Service (IRS)
beginning sometime in 1992 and ending in October of the same
year. While the audit was taking place, Mr. Brooks called
individuals from whom he had purchased scrap metal for cash,
including John, and advised them that the IRS was auditing Dix
Scrap and examining documentation with respect to Dix Scrap’s
cash purchases. After receiving the call from Mr. Brooks, John
called Mr. Boyer sometime between April and July of 1992, to
inform Mr. Boyer about the scrap metal sales that he had been
3(...continued)
to ensure records are being kept properly.
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