Tax fraud question

[webtracker]

I know of a Corporation that is purchasing a product from another country. He imports said product and resells nationwide. Recently he created several DBA's under the same Corporation and has started selling said product, at a hugely inflated price, to one of his DBA's. He then dumps said product on Ebay at a huge loss (but at a loss greater than what he purchased from originally overseas). Can anyone explain what he is doing and tell me if it's "legal"? Is he trying to create a loss on paper while actually making a profit? He has created 3 such DBA's that he uses to push his product on Ebay.

 

[Michael Wechsler]

I have no idea what he is doing. I'm wondering why he has set these entities up as DBA's. Perhaps it could be to give the impression to others that he is selling the items below cost and passing this off as "truth." E.g. - Selling item at 70% below cost!!!!! That grabs the attention of ebay viewers and he then thinks he can justify this lie by showing it's not really a "lie." But it is a fraudulent business practice in my humble opinion. But as I said, I have no idea what the real situation is and we can guess all day long.