River City Ranches #1 Ltd., Leon Shepard, Tax Matters Partner - Page 65

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               Jay Hoyt was also convicted of money laundering for                     
          concealing from the bankruptcy trustee over $1,600,000 in funds              
          received from investors after June 5, 1997, that were deposited              
          into First Security Bank and later withdrawn in varying                      
          increments.  The 17 money laundering counts for which Jay Hoyt               
          was convicted each represent individual checks drawn on the First            
          Security Bank account that were each (1) made payable to Hoyt                
          related partnerships or individuals, and (2) of a value greater              
          than $10,000.  The dates for each of these 17 checks range from              
          on or about June 30, 1997, through January 15, 1998.                         
          Accordingly, the money laundering conviction, which was based on             
          activities that commenced in 1997, cannot possibly be used as                
          evidence to establish a theft prior to that date.  Since 1996 is             
          the last year at issue for all of the nine sheep partnerships,               
          the money laundering conviction in no way establishes a theft                
          from any of the sheep partnerships for any of the years at issue.            
               Rejecting the arguments advanced by petitioners, the Court              
          holds that none of the Federal crimes committed by Jay Hoyt                  
          establish that a section 165 theft was perpetrated on the                    
          partnerships for any of the years at issue.  Accordingly, a theft            
          from each partnership of partnership property must be proven                 
          under another theory for petitioners to establish that the                   
          partnerships were the victims of theft.                                      








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