Francis M. Gagliardi - Page 21




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              Mr. Gagliardi and his brother assisted Mr. Hunner in                    
         preparing:  (1) The gambling calendars showing most of Mr.                   
         Gagliardi’s gambling activities for 1999 through 2001, (2)                   
         summaries of Mr. Gagliardi’s living expenses for 1999 through                
         2001, and (3) net worth analyses of Mr. Gagliardi for 1999                   
         through 2001 (based on records from those years).  Mr. Gagliardi             
         reviewed the summaries of living expenses and net worth                      
         statements to ensure they were complete and accurate.                        
              Mr. Gagliardi and his brother assisted Mr. Hunner in                    
         preparing a cashflow analysis with supporting documents for each             
         line item, including a related summary of living expenses for Mr.            
         Gagliardi, for 1999, 2000, and 2001 using records from the                   
         respective tax years (cashflow analysis).  The cashflow analysis             
         showed the following:                                                        
                                    1999      2000      2001        Total             
          California lottery      $666,500  $666,500   $666,500  $1,999,500           
          Less:  Federal income tax(186,621)  (186,623) (183,431)  (556,675)            
                                  479,879   479,877    483,069   1,442,825            
          Sale of America funds   160,014   330,000    191,198   681,212              
          Interest and dividends  1,420     688        639      2,747                 
          Prior year Federal income153,669   104,655     none     258,324              
          tax refund                                   received                       
          Form W-2G cash (casinos)127,073   270,052    631,629   1,028,754            
          Net cash available       922,055  1,185,272  1,306,535 3,413,862            
          Living expenses        (331,341)  (251,943)   (210,334)(793,618)            
          Gambling losses claimed(502,433)  (802,921) (1,170,140) (2,475,494)         
          Cash remaining           88,281    130,408    (73,939)   144,750            







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