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over these funds and that he failed to prove that these funds
were used for corporate purposes.
We find that Mr. Kong diverted corporate funds from Sam Kong
Fashions for his personal use. The parties have stipulated that
checks issued by Style Setters and Half Moon Bay were deposited
into Mr. Kong’s personal checking account maintained at Mellon
Bank in 1994 and 1995. Style Setter and Half Moon Bay issued
these checks as compensation for sewing services performed by Sam
Kong Fashions. In 1994, Mr. Kong deposited 18 checks totaling
$218,097.15 into his checking account maintained at Mellon Bank.
In 1995, Mr. Kong also deposited 18 checks totaling $212,388.40
into his Mellon Bank account. Mr. Kong received checks that were
payments to Sam Kong Fashions for sewing service and deposited
these funds into his personal checking account. Furthermore,
these amounts were not recorded as gross receipts by Sam Kong
Fashions, nor was the receipt of these checks disclosed to
petitioners’ accountant. We find that Mr. Kong diverted
corporate funds for his own personal use and that these funds
constitute a corporate distribution to Mr. Kong.
We are also convinced that Mr. Kong did have control over
the funds deposited into the Corestates Bank account by Mr. Wen.
The record reveals that Mr. Kong had control over this account.
Even though Mr. Wen deposited checks issued to Sam Kong Fashions
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