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a 45/45/10 percent split. KWJ Partnership was also used as a
conduit to transfer funds to Ballard’s and Lisle’s adult children
in the form of so-called consulting payments.
Kanter, Ballard, and Lisle earned the income associated with
the portion of the Hyatt Corp. payments that were routed through
IRA and KWJ Partnership. Kanter, Ballard, and Lisle attempted to
assign that income to IRA and later to KWJ Partnership and its
partners, Carlco, TMT, and BWK. Kanter, Ballard, and Lisle
failed to report this income on their own tax returns.
Through the Hyatt transaction, Kanter, Ballard, and Lisle
came to realize that Kanter’s skills as an attorney, his client
list, and his business contacts in the commercial real estate
industry neatly complemented Ballard’s and Lisle’s ability to
influence Prudential’s business decisions pertaining to its large
commercial real estate holdings throughout the country. The
Hyatt transaction set the stage for Kanter’s, Ballard’s and
Lisle’s dealings with Schaffel, Frey, Schnitzer, and Eulich,
summarized below.
3. Schaffel
In the late summer of 1979, Schaffel met Kanter, Ballard,
and Lisle for dinner in New York. Lisle understood that Kanter
arranged the dinner in part to see whether Schaffel might be able
to do business with Prudential. Shortly thereafter, Schaffel
agreed to share with Kanter any fees he might earn on
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