- 38 -
Neither does the Court believe these and other accounting
deficiencies were inadvertent and attributable to a lack of
proper accounting training on the part of Jay Hoyt and other
individuals preparing these records. Several former Hoyt
organization workers testified that, over the years, substantial
fictitious cattle information was created and entered in the Hoyt
organization’s computerized cattle records. These witnesses
included: (1) Robert Baker, who was hired by Jay Hoyt in June
1984 to design a computerized cattle record keeping system for
the Hoyt organization and then established and managed the Hoyt
organization’s computerized cattle record keeping system from
about 1985 through 1987,21 (2) Terry Hawkins (Mr. Hawkins), who
20(...continued)
partnerships. These “warranty obligations” apparently were never
satisfied.
21Mr. Baker testified that, because of the Bales case
litigation, he had been given a May 1985 deadline to establish
the Hoyt organization’s computerized cattle records. See Bales
v. Commissioner, T.C. Memo. 1989-568. As a result, he began by
entering information and generating computer records “capturing”
the Hoyt family’s and Hoyt organization’s past 32 years of cattle
operations. He related that Jay Hoyt had also furnished him with
a list of random sires to use in assigning specific sires to many
individual cattle whose sires, in fact, were unknown. He added
that he had been instructed by Jay Hoyt to follow a similar
procedure in “capturing” the Hoyt organization’s subsequent
“cattle inventories” and in registering large numbers of cattle
with the ASA. He stated that he attempted to match and attribute
each calf to a “random sire” that had the same matching physical
characteristics. He further acknowledged that the Hoyt
organization’s registering of calves from unknown sires as being
offspring of known sires violated the ASA’s registration rules,
as the random sires he assigned to calves, in many cases, were
(continued...)
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