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assert that the indictment in the criminal case provides
sufficient facts to establish the existence of a theft for
purposes of a theft loss. As previously mentioned, under TEFRA
we have no jurisdiction in this partnership level proceeding over
nonpartnership items, which can only be determined at the
individual partner level. See sec. 6226; Affiliated Equip.
Leasing II v. Commissioner, supra at 576. Accordingly, we
analyze each of the crimes Jay Hoyt was convicted of committing
to determine whether the partnerships are entitled to a theft
loss deduction.
Jay Hoyt was convicted of one count of conspiracy to commit
mail fraud and multiple counts of mail fraud, but these criminal
acts were perpetrated against prospective and current partners,
not the partnerships. Nothing in the indictment indicates that
the partnerships were the victims of the conspiracy or mail fraud
committed by Jay Hoyt, nor was any restitution awarded to the
partnerships. Clearly, the victims of these crimes for which Jay
Hoyt was convicted and ordered to pay restitution were
exclusively individual investors. Crimes perpetrated on the
partnerships simply were not the nature or focus of the Federal
conspiracy and mail fraud investigation and prosecution.
Jay Hoyt was convicted of 31 counts of mail fraud for using
the USPS to execute his intentional scheme to defraud and to
obtain money through false promises and false pretenses. Each of
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