-72-
Thus, respondent argued in his posttrial briefs that Schaffel,
Frey, Schnitzer, and Eulich generally were unaware Ballard and
Lisle were using their influence at Prudential to steer business
opportunities to them, and they generally believed they were
compensating Kanter for his influence. As discussed in greater
detail, see infra pp. 229-235, in the light of respondent’s
theory the STJ report gave undue weight to testimony by The Five
that they did not participate in a kickback scheme.
The STJ report also incorrectly stated: “respondent’s claim
of fraud is not based, per se, on the payments by The Five to
Kanter or any of the other entities to which such payments were
directed.” Respondent clearly asserted in his opening brief that
Kanter’s, Ballard’s, and Lisle’s actions were fraudulent because
(1) they knew all the payments from The Five to IRA and THC
represented income that was taxable to each of them individually,
and (2) Kanter, Ballard, and Lisle intentionally used IRA and THC
to (a) shelter the payments from The Five from taxation, and (b)
to channel the payments to themselves disguised as capital
contributions, loans, and payments to family members.
Respondent’s Opening Brief at 556-557.
In addition, the statement in the STJ report limiting
respondent’s theory of fraud to the failure of Kanter, Ballard,
and Lisle to report as income amounts “dropped down” to them in
the form of loans is inaccurate and incomplete. In fact,
Page: Previous 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 NextLast modified: May 25, 2011