In a criminal tax case, Max Mogul was charged with several counts of tax evasion and filing a false income tax returns, stemming from his diversion of funds from Boca Grande Enterprises, Inc. (BGE), a closely held corporation of which he was president, founder, and controlling shareholder. At trial, the U.S. sought to establish that Mogul had received taxable income by systematically diverting funds from BGE to support a lavish lifestyle. Mogul gave millions of dollars of BGE money to his mistress and millions of dollars to his wife, without reporting any of this money on his personal income tax returns. Mogul siphoned off this money primarily by writing checks to his employees and friends and having them return the cash to him, by diverting payments by BGE customers, by submitting fraudulent invoices to BGE and by laundering BGE money through companies in Panama and St Kitts-Nevis. In his defense, Mogul sought to introduce evidence that BGE had no retained or current earnings and profited in the relevant taxable years.