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(1985); Flowers v. Commissioner, 80 T.C. 914 (1983); Steerman v.
Commissioner, T.C. Memo. 1993-447.
In his capacity as attorney, Kravitz dealt with Roberts or
Grant in three real estate ventures during the period 1978 to
1981. Roberts was the general partner in the first venture in
1978. With respect to the latter two ventures, Kravitz could not
recall at trial whether Roberts or Grant was the general partner;
he knew only that it was one or the other. Kravitz testified
that each of the real estate ventures closed without incident; he
found the offering materials for each venture to be appropriate
and correct with respect to the real estate aspects of the
transaction.
Cohn testified that the significant feature to him in any
offering was the performance and reputation of the general
partner. Triemstra testified that among the factors that induced
him to invest in Northeast was his reliance on Kravitz'
"investigation" and prior dealings with Roberts, and the
Government's supposed encouragement of this type of investment.
There is no indication in the record that Cohn or Triemstra ever
had any contact with Roberts or Grant. They knew only what
Kravitz told them, and relied upon his impressions of Roberts and
Grant.
Kravitz had no indication that either Roberts or Grant had
any background in plastics or plastics recycling. Kravitz knew
that Roberts' background was in banking and that Grant was a
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