-287-
In addition, TMT owned a 45-percent partnership interest in
KWJ Partnership. IRA made substantial loans to KWJ Partnership
which in turn KWJ Partnership used to make so-called consulting
payments to Ballard’s and Lisle’s adult children during the
period 1983 to 1989. Ballard was aware of and acquiesced in
these payments, and he was aware that the children were not
providing any meaningful services in exchange for the payments.
Ballard made loans to himself and his family members from
TMT’s assets with no intention of repaying those loans, and he
transferred property acquired by TMT to himself in exchange for
an illusory promissory note. We conclude Ballard owned TMT and
all of its assets, and Ballard used TMT as a conduit for
receiving his share of the payments from The Five.
(iii). BWK
During 1984 through 1989, Kanter and his son, Joshua Kanter,
received salaries from BWK totaling $210,000 and $26,000,
respectively. However, Kanter admitted that he never had the
time to manage BWK’s investments.
In April 1985, BWK lent $400,000 to Kanter. By the end of
1987, the $400,000 loan had not been repaid. In 1988 and 1989,
the $400,000 loan was reduced by approximately $30,000 each year.
Adjusting journal entries treated these loan reductions as salary
that otherwise would have been paid to Kanter. There is no
evidence that Kanter paid any interest on the $400,000 loan.
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