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When Ernest J. Primm owned the Monterey Club, a poker house in Gardena, California (a Los Angeles suburb), he claimed on his state income taxes the losses of his shills, up to $500 ($4,500 today) a month, as expenses or losses — illegitimate deductions.
Seven years later, it caught up with him. The state’s Franchise Tax Board assessed him $1,589 ($13,000 today) for that year when his enterprise grossed $1.3 million ($11.7 million today).
(Primm also owned the Embassy Club and Rainbow Clubs in Gardena and Club Primadonna in Reno, Nevada.)