James J. Coyle - Page 21

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          Federal income tax returns for 1992 and 1993.  We review this               
          record further to consider whether the underpayments of tax by              
          Mr. Coyle are due to fraud within the meaning of section 6663.              
               When asked at trial how he kept his records on sales of                
          wheels and axles, Mr. Coyle responded as follows:                           
               Q    So you get the cash.  Are you – you’re not                        
               recording it anywhere or booking it anywhere?                          
               A    Yes.  I would keep my records, you know,                          
               basically, you know, to justify my income.  Yes.                       
               Q    And what kind of records would you keep?                          
               A    I’d basically make notations, you know, on a                      
               monthly basis and then accumulate it at the end of the                 
               year and then give it to Herman for my income.                         
               Q    So –                                                              
               A    Which, you know, is not the best way in the world                 
               to do it, you know.  But, you know, that’s the way I                   
               was doing it.                                                          
               Q    You would book each receipt of cash from wheel                    
               and axle income -                                                      
               A    Right.                                                            
               Q    – to your own records, not the records of Regal?                  
               A    Right.                                                            
               Q    To your own records?                                              
               A    Yes.  Because I was getting the benefit of it at                  
               that particular time.                                                  
               Q    And where are those records?                                      
               A    I don’t know now.                                                 
          Mr. Coyle did not provide Mr. Herman with information or receipts           
          reflecting income from sales of wheels and axles.                           
               Testimony from Mr. Roach, Mrs. Roach, and Mr. Gibson lead us           
          to the conclusion that it was the practice of their respective              
          businesses not only to keep records for themselves of cash                  
          purchases of wheels and axles from Regal, but also to provide               
          Regal or Mr. Coyle with copies of the receipts.  As stated                  
          previously, we found Mr. Roach, Mrs. Roach, and Mr. Gibson to be            

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