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During both charters involving PSA, petitioner and Mrs. Magassy
were on board the Feadship, and during one of those charters,
petitioners’ two sons were on board.
For the 1996 charter boat season, petitioner’s Feadship was
not listed in the Charter Databank International Listings, an
important multiple listing service for a successful charter boat
operation.
From the time of purchase in 1990 and through 1995, the
first year of chartering the Feadship, petitioner kept invoices
and copies of checks relating to payment of the restoration costs
of the Feadship. During this period, however, petitioner’s books
and records relating to the Feadship were not complete.
Between 1990 and 1994, petitioner incurred more than
$334,000 in interest expenses relating to the $1 million and the
$300,000 loans petitioner obtained to purchase the Feadship.
Before 1996, incomplete books and records were maintained
relating to petitioner’s and SMSM’s costs and expenses for the
restoration work on the Feadship and for the charter of the
Feadship.
In 1996, Midge McKee Hopkins (Hopkins), the longtime
bookkeeper for PSA, began maintaining computerized books and
records relating to the Feadship and to write the checks to pay
the bills relating to the Feadship. Each month, Hopkins received
an envelope of bills, bank registers, and bank statements from
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