- 67 -
effectively forfeiting their ability to do business with
Northwest. We also conclude that it was reasonably foreseeable
by petitioner that his actions would have this result; we do not
believe petitioner could have thought otherwise, in view of his
conduct and the response it engendered in Northwest in the months
leading up to and following the filing of Northwest’s lawsuit.
We are satisfied from the record that petitioner’s intentions by
mid-1988 were to keep for himself whatever ticket proceeds he
could hide from Northwest’s auditors. With the exception of ANB
No. 2, the funds in the ANB accounts subject to the TRO were
transferred there despite petitioner’s best efforts. Although
petitioner tried to thwart Northwest’s discovery of the ticket
proceeds, by not cooperating in disclosing financial information
despite his obligation to do so under the Interim Agreement and
then the TRO, Northwest’s auditors were able to trace and
identify the funds, thereby forcing petitioner to transfer them
to custodial accounts.
Because of petitioner’s efforts to keep the funds hidden, we
find petitioner’s remaining evidence of agency, namely, that
Chung recorded the funds in the ANB accounts as assets of IL NA
Tours in workpapers for the corporation’s June 30, 1988,
financial statement and on its 1988 return, unpersuasive. To the
extent these funds were so recorded, those compilations occurred
Page: Previous 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 NextLast modified: May 25, 2011