Albert R. and Phyllis F. Dworkin - Page 9

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            and Roberts were general partners together in other investments                                
            and maintained an office together in New York City.  During 1981                               
            Roberts served as second vice chairman of the Mountain Ridge                                   
            State Bank (Mountain Ridge) in West Orange, New Jersey.                                        
                  As general partner, Roberts was personally responsible for                               
            the full amount due on the Northeast partnership lease.                                        
            Petitioner contacted Roberts to discuss the Northeast                                          
            transaction.  Petitioner was provided a copy of Roberts'                                       
            individual financial statement dated August 20, 1981.  The                                     
            financial statement showed a net worth for Roberts in the amount                               
            of $3,830,000.  Petitioner asked his banker, Joseph Dowding                                    
            (Dowding), to run a background check on Roberts and Mountain                                   
            Ridge.  Dowding reported that Mountain Ridge was a small bank and                              
            that its president had told him that Roberts had a fine business                               
            reputation.  Also, a financial statement for Mountain Ridge was                                
            forwarded to petitioner.                                                                       
                  Petitioner was provided a copy of the offering memorandum                                
            for Northeast.  The offering memorandum summarized the Northeast                               
            transaction and detailed the tax risk factors, business risk                                   
            factors, and the business of the partnership, inter alia.  The                                 
            offering memorandum unambiguously disclosed that both Grant and                                
            Roberts were promoters of Northeast.  Appendices to the                                        
            memorandum include reports of F & G's evaluators, Stanley M.                                   
            Ulanoff and Samuel Z. Burstein, and a draft letter of counsel                                  
            regarding the tax risks associated with Northeast.  Petitioner                                 




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