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Recordation of ANB Accounts in IL NA Tours’ Workpapers
In August 1988, in connection with the preparation of
financial statements for IL NA Tours covering the period January
1 through June 30, 1988, Chung prepared workpapers that recorded
the balances in the ANB accounts at that time as assets of IL NA
Tours. Chung obtained information for this purpose from
Belofsky.
Northwest’s Conclusions From Its Audit
Northwest’s auditors completed the audit of petitioner’s
corporations’ consolidator activities on or about August 31,
1988. Northwest concluded that, as of August 31, 1988, after
crediting the letters of credit exercised and the commissions
Northwest owed petitioner’s corporations, petitioner and his
corporations owed Northwest approximately $15,439,468.
Petitioner did not agree with Northwest’s calculation of the
amount owed.
As a result of the audit, Northwest’s auditors concluded on
the basis of the information then available to Northwest that
during 1987 and 1988 petitioner had transferred $15,096,879 of
the proceeds from the sale of Northwest’s ticket stock into
brokerage accounts of which Northwest then had knowledge
(contested accounts), he had transferred $4,102,049 from the
contested accounts into various other accounts, he had withdrawn
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