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Kanter, Ballard, and Lisle did not participate in a kickback
scheme, is directly contradicted by the overwhelming objective
evidence in these cases and thus is manifestly unreasonable.
As outlined below, the STJ report reflects a fundamental
misunderstanding regarding respondent’s theory as to the means
and manner by which Kanter, Ballard, and Lisle conducted the
kickback scheme. Further, the analysis in the STJ report is
based on the misconception that respondent conceded IRA, THC, and
other Kanter-related entities were not shams. As a result, the
question of the validity of these entities was never broached.
These errors and others are explored in greater detail below.
1. The STJ Report Reflects a Misunderstanding of
Respondent’s Theory Regarding the Kickback Scheme
In rejecting respondent’s assertion that Kanter, Ballard,
and Lisle earned, received, shared, and failed to report as
income a substantial amount of kickback payments, the STJ report,
at 72-77, repeatedly emphasizes that Frey, Schaffel, Schnitzer,
and Eulich uniformly denied that their payments to IRA, THC, and
other Kanter-related entities were intended to compensate Ballard
or Lisle in any way. These statements reveal the STJ report is
based on a fundamental misunderstanding of respondent’s theory
regarding the organization and operation of the kickback scheme.
Respondent argued that Kanter, Ballard, and Lisle did not
disclose their scheme to Schaffel, Frey, Schnitzer, and Eulich.
Respondent’s Opening Brief at 568-567, quoted supra p. 71,
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