Linda K. Haltom - Page 3

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          their clients in various ways.  Jerry Haltom was one of these               
          eighteen.  As described by the Fifth Circuit,                               
                    Haltom exploited his position by perpetuating a                   
               false invoice scheme against his clients, the                          
               manufacturers. In simple terms, he claimed a greater                   
               amount in promotional funds than was owed the                          
               wholesalers and retailers, and he pocketed the                         
               difference. Unsurprisingly, he failed to report this                   
               illicit income on his federal income tax returns.                      
               Haltom stipulated that he misappropriated $766,618                     
               from the food manufacturers and cheated the government                 
               of $100,838 in taxes for 1989, 1990, 1991, and 1992.                   
          United States v. Haltom, 113 F.3d 43, 44 (5th Cir. 1997).                   
               In October 1994, federal investigators raided the Taylor               
          Company’s offices.  In February 1996, Jerry was charged by                  
          information with one count of mail fraud and four counts of tax             
          evasion.  In June 1996, he pled guilty and was sentenced in                 
          district court to serve 26 months in prison, followed by three              
          years of probation.                                                         
               The criminal investigation triggered an audit of the                   
          Haltoms' tax returns for 1989-94.  Besides discovering that the             
          Haltoms had not reported Jerry's embezzlement income, the IRS               
          also discovered that during those years Linda had earned $4,104             
          under the name "Dela's Demos"--sporadic employment passing out              
          samples to customers in local supermarkets.  The Haltoms reported           
          neither the gross receipts nor calculated the net taxable income            
          from Dela’s Demos on their returns.  Linda testified that she               
          believed it was not enough income to report, but this was true              
          only of 1991.  She should have reported additional net taxable              

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