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9.9 percent to 13.25 percent–-as being inconsistent with having a
cash hoard.
When asked why he financed the cars, Michael replied:
The reason why I finance everything is because,
listening to Mike Sanderson that’s so successful was –-
his big thing was use other people’s money and put down
as little as possible or nothing, and that’s what I was
doing.
On answering brief, petitioners assert that “This strategy is not
an uncommon one as many ‘financial gurus’ explain at seminars
that this is one way to make money.” While we do not doubt that
“this is one way to make money”, we strongly doubt Michael
intended to do so by paying high interest rates while earning no
interest income on the alleged cash hoard. Moreover, in response
to the Court’s question whether Michael had noticed that, during
the early 1980s, banks were advertising interest rates of 10
percent or higher on savings deposits, Michael stated: “I’ve
never been one to look at anything like that to –- no concern.”
We cannot reconcile this statement with Michael’s alleged desire
to make money in the manner that Sanderson allegedly did. We
believe Michael’s testimony on this point was incredible.
Michael’s incredible explanations of his behavior constitute an
additional “badge of fraud”. Bradford v. Commissioner, 796 F.2d
at 307; Boyett v. Commissioner, 204 F.2d at 208.
In addition, between May 30, 1994, and March 21, 1995,
petitioners took a total of $10,500 in cash advances.
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