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proceeding, petitioner has never denied that he fraudulently
misappropriated money from the Kieffers and that it was wrong to
do so, although he alleges that these misdeeds were an isolated
aberration in his conduct. Petitioner maintains that he always
intended to repay the Kieffers with interest for their
“investments”, and that he eventually did so, with liquidated
damages, albeit pursuant to a consent judgment. (He alleges
that he would have repaid the Kieffers sooner but lacked the
resources, having gambled himself into bankruptcy and being
legally unable to withdraw funds from his Government retirement
program.5) Although it betrays a sore lack of judgment (perhaps
aggravated by a gambling compulsion) and does nothing to absolve
him of wrongdoing, petitioner’s testimony in this regard did not
strike us as being dishonest or devious.6
Petitioner testified that when he filed his tax returns for
1995 and 1996, he believed that he was not required to report
the Kieffers’ payments to him as taxable income, “Because I
5 Petitioner alleges that he did not list the Kieffers on
his bankruptcy petition because he intended to repay them in full
and did not seek to have his obligations to them discharged in
bankruptcy.
6 We are mindful that in sentencing petitioner for mail
fraud, the presiding judge in the U.S. District Court of New
Jersey stated: “It’s clear to me that that unfortunate
circumstance [of petitioner’s defrauding the Kieffers] was the
result of a gambling compulsion, which doesn’t excuse it, however
you have made complete restitution to the Kiefers [sic], you have
come forward and accepted responsibility and in an extraordinary
way”.
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Last modified: May 25, 2011