-217-
documents after receipt of the IRS summons. United States v.
Administration Co., supra; Exh. 9047--Mem. Op. and Ord. of May
20, 1994.
The District Court concluded that none of the summoned
documents were produced and the Kanters and the four Kanter-
related entities acted in bad faith in failing to comply with and
blocking enforcement of the summonses. The District Court
ordered Gallenberger, on behalf of PSAC, to appear before the IRS
by May 24, 1994, and produce the records sought by the summonses.
United States v. Administration Co., supra; Exh. 9047--Mem. Op.
and Ord. of May 20, 1994.
Although Gallenberger appeared before the IRS and testified
and produced some documents on May 24, 1994, she did not search
all of the records in her possession but instead looked in every
fifth, sixth, or seventh file. On June 10, 1994, the Government
filed with the District Court a motion to hold Gallenberger in
contempt. On June 22, 1994, the District Court held a further
hearing. The District Court noted that PSAC operated much like a
registered agent and a document repository primarily for the
benefit of Kanter-related entities, and most of PSAC’s over 2000
files related to Kanter. United States v. Administration Co., 74
AFTR 2d 94-5256, 94-2 USTC par. 50,480 (N.D. Ill. 1994), affd. 46
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