- 5 - Saliterman was not aware of, and McGraw and Butler did not inform Saliterman about, the diversion schemes. During the years in issue, McGraw supervised the preparation of Metro’s Forms W-2, Wage and Tax Statement, and Forms 1099-MISC, Miscellaneous Income, which he knew did not reflect the funds diverted to Butler, and signed Metro’s tax returns, which he knew did not accurately reflect Metro’s income and deductions. McGraw did not know the total amount of cash Butler kept for himself or, with the exception of Butler’s payments to Miller, how the diverted cash was spent. In 1990, respondent audited Metro’s 1988 and 1989 tax years. McGraw failed to disclose to the auditor that there were income omissions and fictitious subcontract expenses. McGraw subsequently consulted with Attorney Peter Thompson (Thompson), who insisted that Metro properly classify all its income and expense items and not file another false tax return. On September 14, 1990, Saliterman sent McGraw Metro’s 1990 Federal and State income tax returns. Shortly before Metro filed its 1990 returns on March 19, 1991, McGraw, acting pursuant to the advice of Thompson, called Saliterman and instructed them to reduce the expense for subcontract services by $400,873 and report that amount as officer’s compensation. Despite Thompson’s advice, McGraw did not instruct Saliterman to include on the 1990Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
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