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On May 5, 1998, Ahmed formed K & M Luxor (KML) as a
California corporation. A relative of Ahmed was identified as
the sole shareholder of KML. Ahmed then caused Macca to transfer
to KML, without consideration, some of the real properties Macca
nominally owned.6
Ahmed’s stated reason for incorporating KML and for
transferring properties from Macca to KML was that Macca had
taken over from ARL some aspects of the ownership and operation
of the medical lab and that Ahmed did not want Macca’s properties
to be subject to any claims against Macca relating to the lab.
Additional Questionable Business
Practices and Diversion of Business Income
In the course of operating his controlled businesses and
nominee entities, Ahmed entered into additional questionable
business practices.
Ahmed often would deposit proceeds of one of his controlled
entities or businesses into a bank account of another of his
controlled entities or businesses or into one of his personal
bank accounts. For example, Medi-Cal checks received in
connection with services rendered at Ahmed’s medical clinics
often were deposited into bank accounts of K & M.
6For reasons not in the record, K & M Luxor has not been
treated by respondent as a nominee entity of Ahmed.
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