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and Ballard failed to report substantial amounts of income for
successive years that they earned in the form of payments from
The Five.
B. Concealment of the True Nature of the Income and the
Identity of the Earners of the Income
Kanter created a complex structure of corporations,
partnerships, and trusts (including, among others, IRA, THC,
Carlco, TMT, BWK, KWJ Corp., KWJ Partnership, Essex Partnership,
Zeus, Zion, IFI, HELO, TACI, and PSAC) to receive, distribute,
and conceal the income that Kanter, Ballard, and Lisle earned
during the years at issue. Payments from The Five that Kanter,
Ballard, and Lisle earned and secretly agreed to share were
remitted to IRA and THC or one of their subsidiaries. The
payments were commingled with funds from other entities in TACI’s
accounts and later PSAC’s accounts. Large amounts of money were
distributed to various entities and individuals, including
Kanter, Ballard, and Lisle, through IRA, THC, HELO, and IFI. The
distributions were disguised as loans and recorded as
receivables. Kanter’s use of the various sham entities, and
Ballard’s complicity in that scheme, made it difficult and
sometimes impossible to trace the flow of the money and are
substantial evidence of their intent to evade tax.
C. Use of Sham, Conduit, and Nominee Entities
Kanter used sham, conduit, and nominee entities to conceal
the income that he and Ballard earned from The Five. As
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