Bennett Geiger - Page 15

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               Moreover, Ms. Clark’s testimony lacks credibility.  For                
          years, Ms. Clark maintained that she did not embezzle from BBTS,            
          including in an affidavit and on her application for a real                 
          estate license.  Furthermore, during February 2006, petitioner              
          threatened Ms. Clark with libel, after which she first admitted             
          to the embezzlement.  Additionally, Ms. Clark’s admission to the            
          embezzlement during the testimony at trial was made after                   
          receiving legal advice from petitioner’s counsel that she could             
          no longer be prosecuted criminally or be liable for additional              
          taxes from the alleged embezzlement.  Also at trial, Ms. Clark              
          could not explain why she continued to carry a credit card                  
          balance while allegedly embezzling from BBTS.  Likewise, she did            
          not provide convincing testimony regarding the amount of the                
          embezzlement or what she did with the money.  Finally, it is                
          implausible to us that Ms. Ellis would recruit Ms. Clark to                 
          embezzle from BBTS, knowing Ms. Clark was formerly married to               
          petitioner and was in a relationship with him at the time.  On              
          the basis of the record, we hold that petitioner has failed to              
          prove that he is entitled to any embezzlement deduction beyond              
          the amount respondent allowed in the notice of deficiency.                  

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