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books. To make these expenses appear legitimate, petitioner, or
a family member at his direction, altered the canceled checks and
created false invoices.
Petitioner concealed assets. Petitioner devised a scheme
whereby he or another employee of the corporation (1) deposited
checks issued to the corporation into petitioner’s personal bank
account, or (2) cashed these checks and gave the proceeds to
petitioner or Ms. McNamara. Petitioner attempted to conceal
these assets by failing to: (1) Record the proceeds in the
corporation’s books; (2) inform Mr. Agresto that the corporation
received these funds; and (3) report these amounts on the
corporation’s Federal income tax returns and his joint Federal
income tax returns.
Petitioner also concealed the fact that beauty shop checks
were deposited in his personal joint checking account.
Petitioner directed Mr. Kapusta to issue checks drawn on the
beauty shop account and to make them payable to “Clairol”.
Petitioner attempted to conceal the receipt of these checks by
creating the appearance that these funds were spent on deductible
business supplies.
Petitioner failed to inform his return preparer, Mr.
Agresto, that petitioner had diverted corporate funds for
personal use. Mr. Agresto specifically asked petitioner and Ms.
McNamara how, on the basis of their income, they could sustain
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