As Iannis said; there was no incorporation, so it's not embezzlement. The only hick up in his plan is that a single donation of 35k exceeds the 13k limit on gifts, but more than likely the giver will be responsible since a money manager is doing it. However, he could just say that the money was for some kind of service (With Brad as the sole proprietor); and then Brad can cancel it out with wage losses, or he might not even need to do that depending on his deductible obligations. The point is, it's not much and he can claim it numerous ways without taxation (And since a trust fund manager is handling it, I assume this is being done). Long and short, since the funding is all split up--it's gifts. They are HIS gifts, because it never went towards an incorporated business, to.
What I can't believe is that he thinks 55k is three months salary for a start up. I know Frenzic said he thinks he got that wrong, but if that's the actual amount that's shocking even for how bad this is.
Naa; the only money that even needs to be reported is the 35k, and he doesn't have any other income, that's so easy to zero out a child could do it. Also, if it's a straight up gift, the giver is probably going to take responsibility for the taxes because of certain record keeping needs.
