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At some point, because Ahmed fraudulently billed Medi-Cal,
the Federal Health Care Finance Administration took action
against Ahmed, prohibiting Ahmed and some of his associates and
nominee entities from owning or operating a medical lab.
Apparently, Ahmed and his wife were divorced in 1999.
Tax Returns
Ahmed’s accountant Saghir prepared Ahmed’s 1995, 1996, 1997,
and 1998 individual Federal income tax returns, the latter of
which, as indicated, was filed after respondent’s notice of
deficiency was issued to Ahmed. Saghir also prepared the
corporate Federal income tax returns for the same years for
Ahmed’s nominee entities. On a monthly basis, Saghir would
collect bank statements and canceled checks relating to the
nominee entities, and he would use bank records to prepare a
general ledger for each entity. Ahmed would assist Saghir in
classifying the receipts and the expenses, and Saghir would
prepare the nominee entity corporate Federal income tax returns
based on the information reflected in the respective general
ledger.
Generally, Ahmed did not inform Saghir of the cash and
checks that the nominee entities received and that Ahmed did not
deposit into the nominee entity bank accounts. As a result,
certain cash proceeds were reflected neither in the general
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