-184-
S corporation, TMT could not own stock in the company. LaRue,
Transcr. at 3587. Nevertheless, TMT’s adjusting journal entries
identified the property that was transferred to Ballard as
“Fairfield Planting Company” (Exh. 9014, at 34), while TMT’s
general ledger identified the asset that was transferred to
Ballard as land (not shares of stock). Exh. 96, at 4.97
Gallenberger could not explain the Fairfield transaction at
all, and Ballard’s testimony regarding the matter was
inconsistent with TMT’s general ledger entries. Ballard’s
explanation suggests that (1) Ballard received a TMT asset worth
considerably more than the amount recorded on TMT’s books, and
(2) Ballard issued a promissory note to TMT that he never
intended to repay.
(iv). Investment in Melinda Ballard’s Company
Ficom International, Inc. (Ficom), was a corporation
organized by Ballard’s daughter, Melinda Ballard, in 1983.
Melinda Ballard, Transcr. at 3721, 3724. In 1986, TMT
transferred $4,000 to Ficom as a loan. Exhs. 9014, 614. In
1988, TMT recorded in its trial balance ledger a $15,000
97 TMT’s general ledger reflected an additional transaction
involving what appears to be separate property in St. Francis
County, Ark., identified as land valued at $424,800, along with a
building ($25,200), and building improvements ($10,925). Exh.
95, at 4.
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