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from The Five. With regard to the transactions with The Five,
Kanter was not an agent, officer, or employee of IRA or its
subsidiaries during the years at issue, except in 1989 after the
IRS began its investigation. Kanter was not controlled by IRA.
To the contrary, Kanter controlled IRA.
The payments from The Five were distributed by various means
either directly to Ballard, Lisle, and Kanter or indirectly
through loans, investments, or consulting payments to them, their
family members, or trusts and/or other entities established for
the benefit of their families. To conceal Ballard’s and Lisle’s
involvement in the scheme, and in an attempt to avoid having to
report the amounts earned from the scheme on their individual tax
returns, Kanter established TMT to serve as Ballard’s alter ego,
and Carlco to serve as Lisle’s alter ego. The funds that Kanter
transferred to TMT and Carlco were Ballard’s and Lisle’s shares
of the fees and profits earned on the transactions with The Five.
Ballard and Lisle owned TMT and Carlco, respectively, and they
had unfettered use and enjoyment of the assets held nominally by
those corporations. FPC Subventure Partnership was a conduit
through which Kanter passed to Lisle his share of fees paid to
Kanter by Schaffel in regard to Travelers transactions.
2. The Hyatt Transaction
Kanter first met Lisle in the late 1960s, and he met Ballard
no later than the early 1970s, in connection with the
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