-6-
C. Other Means Used To Transfer Funds for the
Benefit of Ballard, Lisle, Kanter, and Their
Respective Families ................ 191
1. Payments From IRA, KWJ Corp., and KWJ
Partnership .................. 191
a. IRA Payments to Ballard and
Lisle in 1982 .............. 191
b. Consulting Fees Paid by KWJ Corp.
and KWJ Partnership to Ballard’s
and Lisle’s Adult Children ........ 192
2. Additional Loans ............... 194
a. IRA Loans to Kanter ........... 194
b. Loans to Ballard, Lisle, Their Family
Members, and Their Trusts ....... 194
(i). Ballard’s Grantor Trusts .... 194
(ii). Lisle’s Grantor Trusts ..... 195
(iii). International Films, Inc. .... 196
(iv). Harbor Exchange Lending Operation 196
(v). Loans to Lisle and His Trusts. . 197
(vi). Loans to the Ballards and
Their Trusts .......... 197
(vii). Writeoff of Loans and Claimed
Losses. ............. 197
(viii). Loans to Lisle’s RWL Cinema
Trust During 1988 to 1990 .... 205
D. Summary of Funds Paid by The Five to IRA and
Disposition of Those Funds for the Benefit of
Kanter, Ballard, Lisle, and Their Families .... 205
E. Payments Made by The Five to THC and Its
Subsidiaries During 1981 Through 1989 ....... 207
F. Distribution of Funds From THC to Kanter ..... 208
G. The Flow of Funds From Four Ponds and One River
Through FPC Subventure to Kanter and Lisle .... 211
V. Additional Findings of Fact Regarding the Examination
Process and Summons Enforcement Proceedings ....... 213
A. Failure To Cooperate During the Audit ....... 213
B. IRS Summonses ................... 214
C. Summons Enforcement ................ 215
D. Requests for Production of Documents ....... 219
OPINION
A. The Parties’ Positions .............. 222
B. The Assignment of Income Doctrine ......... 224
C. Errors in the STJ Report ............. 228
1. The STJ Report Reflects a Misunderstanding of
Respondent’s Theory Regarding the Kickback
Scheme .................... 229
2. Discussion Regarding Assignment of Income .. 231
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