Evelyn M. Martin - Page 16




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          involvement or knowledge, Mr. Martin and certain professionals              
          devised this complex and somewhat devious transaction consisting            
          of a series of steps and involving several entities.  The                   
          transaction was primarily intended to deceive State insurance               
          regulators into believing that the asset position or picture of             
          Mr. Martin’s insurance company was improved.  The transaction was           
          further complicated because it was structured for tax purposes to           
          appear that the transfer of property to the corporation(s) was a            
          nontaxable event under section 351.  Ultimately, the desired                
          results were not achieved, Mr. Martin was incarcerated due to his           
          fraudulent deceptions, and petitioner was left penniless and                
          bankrupt.                                                                   
               Petitioner knew that Mr. Martin intended to contribute                 
          shares in Primera to another corporation, but she had no actual             
          knowledge of the myriad and complex steps or entities involved in           
          the transaction.  Petitioner’s uncontroverted testimony revealed            
          that she was, at most, superficially aware of only a small                  
          portion of the details in these complex transactions.  Because              
          petitioner had only a superficial awareness of the transaction,             
          petitioner did not have actual knowledge of the amount of the               
          financial gain that was misreported, nor of the underlying facts            
          that gave rise to the gain.  Based on the facts pertaining to the           
          transactions available to petitioner, she would not have known              
          that the stock transfer was not a section 351 transaction or that           






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Last modified: May 25, 2011