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identified specifics of the suspected wrongdoing, and Steelman
was fired after Trent’s report to petitioner. Trent was then
engaged to perform records reconstruction and to assist
petitioners in preparation of their income tax returns for the
years in issue. Trent also assisted law enforcement, including
the Federal Bureau of Investigation, with the criminal
investigation of Steelman.
During an audit interview, Trent, representing petitioners,
told the examining agent that Steelman embezzled funds three
ways: Additional weekly payroll checks that Steelman tricked
Mrs. Haney into signing by showing her a check stub payable to
one entity and then making the check itself payable to a
different person, credits posted to Steelman’s personal credit
card account from Flair Enterprises’ credit card machine, and a
pension and profit sharing plan benefiting Steelman that she
created without authorization and enhanced using company assets
for her own benefit. Trent also represented to the examining
agent that Flair Enterprises kept no cash on hand and that there
was no petty cash fund set up at the company.
Steelman utilized several means to embezzle funds from Flair
Enterprises, including writing additional unauthorized payroll
checks to herself and depositing unauthorized funds from the
company into a section 401(k) account in her name. However,
Steelman did not embezzle cash funds from the company.
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Last modified: November 10, 2007