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Ballard’s and Lisle’s shares of the fees that Schaffel paid to
IRA to them through TMT and Carlco, and he received his own share
through BWK.
Kanter and Lisle attempted to assign income that they earned
on Travelers transactions to THC, and they failed to report that
income on their individual returns. There is insufficient
evidence to demonstrate that funds that Schaffel paid to THC were
distributed directly to Lisle. Nevertheless, as discussed in the
flow-of-funds analysis below, Kanter transferred at least a
portion of Lisle’s share of Travelers fees to Lisle through FPC
Subventure Partnership.
4. Frey
Frey was a real estate developer engaged in condominium
conversion projects. Condominium conversion projects generally
were capital intensive enterprises. Kanter told Frey that he
could bring investors with substantial capital to Frey’s
condominium conversion projects but that he would only do so if
Frey provided Kanter with an equal share of any development and
management fees generated by the conversion projects. Frey
orally agreed to this arrangement. Although he remitted Kanter’s
share of development and management fees to THC as directed by
Kanter, Frey understood that it was Kanter who would bring the
deep-pocket investors to his projects.
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