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to those corporations after January 1, 1988, and then to the
amounts owed for ticket stock issued before that date. Belofsky
further advised Northwest that he would have petitioner deposit
with Belofsky the proceeds of the “‘Gerber’ account”, which he
would then hold until he received appropriate documentation from
Northwest.
At the time this letter was written, the Gerber stock
proceeds, as well as numerous other assets, including the Pan Am
stock, had been transferred to one of petitioner’s personal
accounts, P.B. No. 2.15 On May 26, 1988, petitioner transferred
$271,836 in cash from P-B No. 2 to account No. 14196956 (ANB No.
2), a client trust account with American National Bank (American
National), which Belofsky had established for petitioner.
Northwest did not accept Belofsky’s proposal.
Northwest’s Litigation Against Petitioner and His Corporations
On June 16, 1988, Northwest advised Belofsky that
Northwest’s analysis of petitioner’s corporations’ consolidator
activities showed that petitioner and his corporations owed
15 As previously noted, the Gerber stock was transferred by
petitioner from one of the corporate accounts (Merrill Lynch No.
1) to petitioner’s personal account, Chung No. 1, on Oct. 13,
1987. The stock was sold for $335,563 on Dec. 24, 1987, and the
proceeds were held in Chung No. 1 until Feb. 24, 1988, when all
assets in that account were transferred to another personal
account of petitioner’s, Chung No. 3. On Mar. 9, 1988,
petitioner transferred the assets in Chung No. 3 to another
personal account, P.B. No. 2.
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