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was fraudulent.2 Concerning the same circumstances that gave
rise to respondent’s determination, the State of California
indicted Mr. Hambarian on the following charges: Grand theft,
presenting false claims, commercial bribery, breach of fiduciary
duty, receipt of corporate property, filing false State income
tax returns with intent to defraud, and money laundering. The
criminal prosecution has been delayed for approximately 2 years
due to a formal conflict of interest inquiry. The inquiry
involves the contention that the Orange County District
Attorney’s Office should be removed from the case because that
office was assisted by an accountant who was employed by the City
of Orange, the same entity that Mr. Hambarian allegedly
defrauded.
Petitioners contend that respondent is on an overreaching
“fishing expedition” in an attempt to bolster an inadequate
determination. Petitioners allege that respondent had based his
deficiency determination on newspaper articles and a summary of
2 Petitioners resided in Anaheim Hill, California, at the
times their petitions were filed in these consolidated cases.
Respondent determined that the fraud penalty applied to both
petitioners. Petitioner Virginia Hambarian has contended that
she was not involved in her husband’s (Jeffrey Hambarian)
criminal matter and that, in any event, she is not authorized to
require the turnover of document or materials in the possession
of her husband’s criminal defense attorney. This Court has not
addressed the merits of Virginia Hambarian’s claim that she is
not liable for the income tax deficiencies or penalties.
Accordingly, we are not able, at this time, to determine whether
the documents would be relevant as to her.
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Last modified: May 25, 2011