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He pleaded guilty to each, in connection with which he admitted
the following:
I provided my accountant with false information
regarding my 1987 income which caused him to prepare a
false return that substantially underreported my income
for that year. I signed the return and then filed it
with the IRS. I also structured a transaction in which
I bought real estate * * * by purchasing 13 cashiers
[sic] checks from various banks each less than
$3,000.00 to avoid the reporting requirements under
Federal law.
Arcade Operations
Banner would often rent out the arcade on weekend mornings
for children’s private parties in which participants were allowed
unlimited play on the games for 1 to 2 hours for a set fee. To
supply the participants with tokens, Mr. Karcho would unlock the
token machines and trigger a switch that caused the release of
tokens. Mr. Karcho would then hand out tokens to the
participants on an as needed basis. Mr. Karcho kept the keys to
the token machines; when he was not present for private parties,
he would provide an employee with cash for the purpose of
obtaining tokens from the token machines to distribute.
Mr. Karcho employed part-time help at the arcade whom he
paid with cash that was not reported on Banner's returns.
Banner claimed deductions for “salaries and wages” on its returns
for the fiscal years ended February 28, 1987, and February 29,
1988, but not on its returns for the years ended February 28,
1989 and 1990.
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