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The Withdrawal Authorizations
During the audit years, petitioner signed withdrawal
authorizations (for the most part, printed forms entitled “Tip
Authorization Voucher” or “Guest Check”) (the WAs) that
authorized the expenditure of amounts charged to 2618's general
ledger account entitled “Business Promotion/Travel”. The WAs
totaled $70,159 for 1989, and $26,345 through November 1990, when
the operation of the club was taken over by JKP.
Petitioner signed the WAs by writing either “PAYNE” or, in
some cases, “Jerry”, or “Jerry Payne”, or “JSP”. The WAs also
set forth a specific date and dollar amount, and they contained
the notation “ProMo”, all in the same handwriting. One of the
1990 WAs was prepared and signed by Virginia Sanders and
contained the words “Jerry S. Payne Promotional Expense” and
“paid out”. On the forms entitled “Tip Authorization Voucher”,
petitioner’s initials appeared on a signature line directly above
the words “I hereby authorize the above tip.”9 Petitioner’s
initials also appeared at the bottom of the “Guest Check” forms.
A number of the WAs contained the words “paid out”, and on one
9 Petitioner testified that the tip authorization vouchers
were originally designed to enable customers to pay the dancers
by means of a credit card rather than in cash. The club’s
customers utilized the vouchers to specify the credit card tip
amount to be allocated to a particular dancer. Petitioner
adapted the vouchers to his own use as authorizations for payment
of the amounts specified thereon. Only the voucher amounts
authorized by petitioner were charged to 2618's general ledger
account entitled “Business Promotion/Travel”.
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