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McNamara hired Michael Kapusta and John D’Ambrosio to handle the
day-to-day operation of the beauty salon. Gian Franco Faces
maintained a business checking account at First Pennsylvania
Bank, and Mr. Kapusta was authorized to sign checks drawn on that
account.
In 1988, petitioner and Ms. McNamara relocated the beauty
shop. Petitioner and Ms. McNamara agreed to pay for the
renovations to the beauty shop with the understanding that
Messrs. Kapusta and D’Ambrosio would reimburse them for
renovation expenses. Petitioner and Ms. McNamara used the
corporation’s funds to pay for the renovations to the beauty
shop. The beauty shop renovation costs were $60,202.97 for
third-party vendor expenses and $38,472 for labor performed by
the corporation’s employees.
In 1989, petitioner and Ms. McNamara requested that Messrs.
Kapusta and D’Ambrosio start making payments to reimburse
petitioner and Ms. McNamara for the renovation costs. After
paying petitioner and Ms. McNamara $100,337, Messrs. Kapusta and
D’Ambrosio became 50-percent owners of the beauty salon business.
Initially, petitioner asked Mr. Kapusta to make the
reimbursement payments in cash or by check drawn on the business
account of the beauty shop. Mr. Kapusta issued checks from Gian
Franco Faces’ business checking account to reimburse petitioner
and Ms. McNamara. Mr. Kapusta issued only one reimbursement
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Last modified: May 25, 2011