- 21 -
indicate that Mr. Mumford prepared it in order to substantiate a
charitable contribution for tax purposes.
Around December 20, 1999, Mr. Kaplan contacted Betty Schadle
(Ms. Schadle), who at that time was a tax principal with Ernst &
Young, LLP (Ernst & Young), for tax advice regarding a proposed
contribution that KQC was contemplating making to a tax-exempt
organization of a building that such tax-exempt organization was
leasing from KQC (leased building). Mr. Kaplan advised Ms.
Schadle that the tax-exempt organization had made improvements
totaling about $800,000 to the leased building5 and that KQC had
made no adjustments because of such improvements to the rent that
it was charging the tax-exempt organization with respect to such
building. Mr. Kaplan also informed Ms. Schadle that the improve-
ments that the lessee made to the leased building were owned by
KQC. Mr. Kaplan did not inform Ms. Schadle, and she was not
otherwise aware, that, in addition to the leased building,
including the improvements to that building, that KQC contem-
plated giving to the tax-exempt organization, there was a new
building located on KQC’s land that the tax-exempt organization
had constructed with HHS’s funds. Nor did Mr. Kaplan inform Ms.
Schadle, nor was she otherwise aware, that on May 15, 1998, a
notice of Federal interest with respect to the improved property
5Mr. Kaplan did not advise Ms. Schadle, and she was not
otherwise aware, that the tax-exempt organization had used HHS’s
funds to make improvements to the leased building.
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011