Lucian T. Baldwin, III - Page 14

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          1990, Granot Loma’s caretaker and his wife experimented with some           
          maple syrup equipment they found on the property to tap some of             
          the maple trees growing on the property and process the sap into            
          syrup.  They ceased the experiment, however, after the                      
          caretaker’s wife received burns as a result of their activity.              
               In February 1989, petitioner hired Joseph Ketter as                    
          caretaker and property manager for Granot Loma.  When Mr. Ketter            
          was hired, he was informed that petitioner intended to use Granot           
          Loma as a business retreat.  At some point after he was hired,              
          Mr. Ketter was instructed to issue an invoice in LFI’s name to              
          one of petitioner’s other corporations each time petitioners, a             
          member of their family, or one of their friends, business                   
          associates, or guests visited Granot Loma.  For example, the                
          first invoice for $420, dated March 7, 1989, was addressed to BAC           
          and covered three nights for two pilots at a rate of $70 per                
          person per night.  Another invoice, dated August 9, 1989, for               
          $5,530 was addressed to BCC, reflecting the overnight stays of              
          petitioner’s employees during the 1989 employee weekend, at the             
          same rate.   One invoice for $123,285, dated April 23, 1990,6 was           
          addressed to BCC and retroactively billed BCC for visits by                 
          petitioner, his family, and their guests during 1988, 1989, and             

               6Petitioner’s accountant, Mr. DiMaggio, was first contacted            
          by a representative of the Internal Revenue Service regarding the           
          examination at issue in this case in April 1990.                            

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