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The illegal nature of petitioner's activities and his
concealment of these illegal activities are additional badges of
fraud. See United States v. Palmer, 809 F.2d 1504, 1505-1506
(11th Cir. 1987); Davis v. Commissioner, T.C. Memo. 1991-333
(embezzler who issued checks for less than $10,000 in order to
avoid detection liable for fraud penalty). Petitioner went to
great lengths to conceal his embezzlement activities. In order
to hide his theft, petitioner caused Mrs. Millyard to write
checks to accounts controlled by him or his wife in amounts less
than $10,000. On three occasions he caused Mrs. Millyard to
write on 1 day several checks for his benefit that totaled over
$10,000. During the period April 1993 through April 1994, Mrs.
Millyard withdrew substantial amounts from her trust. On the
report to the bank, petitioner reported that Mrs. Millyard
withdrew merely $23,500 from the trust. The bank would have been
concerned had it seen that approximately $100,000 had been taken
from the trust. By incorrectly reporting the amounts withdrawn
from the trust, petitioner attempted to conceal his embezzlement
activities.
Petitioner's receipt of embezzlement income by defrauding an
elderly client of her funds was the underpinning of virtually
every count in the indictment against him, including bank fraud,
money laundering, embezzlement, and the filing of false income
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