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Mr. Sowards purportedly assigned certificates of beneficial
interest in WPA to his wife, Ms. Sowards, and their six
children.8 Mr. Sowards did not inform his wife or children of
their purported beneficial interests in WPA.
Mr. Sowards opened and maintained a bank account under the
WPA name at the Bank of Milipitas, account No. 1109898 (WPA’s
bank account). He had sole signatory authority over WPA’s bank
account. During the relevant years, Mr. Sowards controlled and
made all day-to-day decisions regarding WPA. Ms. Vera Morris
(Ms. Morris) was named sole trustee of WPA. Ms. Morris was an
employee of STL and the mother-in-law of Mr. Strong. WPA did not
file Federal income tax returns for 1995, 1996, or 1997.
For the tax years at issue, STL issued checks to WPA
approximately every week. On an approximately weekly basis, Mr.
Sowards submitted statements to STL for the WPA payments he
received. The dated statements read “To: System Two Limited,”
“From: WPA,” “For: Legal Compliance” and list an amount “Due”.
The statements for 1996 and 1997 list total amounts due to WPA
from STL of $131,700 and $46,853.52, respectively.
8Mr. Sowards purportedly assigned the following percentages
of beneficial interest in WPA to the following members of his
family, 25 percent to his wife and 12.5 percent to each of his
six children: Jared V. Sowards, Benjamin J. Sowards, Rachel H.
Sowards, Emily M. Sowards, Nicolas L. Sowards, and Julie A.
Sowards.
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