Durham Farms #1 - Page 38




                                       - 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...)           





Page:  Previous  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  47  Next

Last modified: May 25, 2011