-239-
report to the effect that Kanter, Ballard, and Lisle testified
credibly they were not engaged in a kickback scheme during the
years at issue are manifestly unreasonable.
We have often emphasized that fraud may be proved by
circumstantial evidence because direct evidence of fraud
generally is not available. See, e.g., Niedringhaus v.
Commissioner, 99 T.C. 202, 210 (1992). More often than not (and
as is certainly the case here), fraud can be established only
through circumstantial evidence and the inferences to be drawn
therefrom. See, e.g., DiLeo v. Commissioner, 96 T.C. 858, 874
(1991).
There is direct evidence the payments from The Five to IRA
and THC represented income earned by Kanter. The transactions in
question in these cases, however, were carried out in such a way
that respondent must rely on circumstantial evidence in support
of his determination that Ballard and Lisle earned substantial
portions of the payments from The Five. There is no direct
evidence that Kanter, Ballard, and Lisle agreed to share the
payments from The Five, nor is there much in the way of direct
evidence that Ballard and Lisle used their influence to steer
Prudential or Travelers business to The Five. As explained
below, however, there is plenty of evidence that Kanter, Ballard,
and Lisle had the opportunity and wherewithal to carry out the
alleged scheme. Ballard and Lisle certainly were in a position
Page: Previous 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 NextLast modified: May 25, 2011