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securities lawyer. Kravitz also knew that Roberts and Grant were
both insiders in the Northeast transaction. Roberts was a 9-
percent shareholder in F & G in addition to being the general
partner in Northeast. Grant was the 100-percent owner of ECI.
The Northeast offering memorandum stated that both Roberts and
Grant were promoters. While Roberts waived his commission for
petitioners, he still received a general partners' fee and
percentage interest. This fee and the percentage interest were
unambiguously disclosed in the Northeast offering memorandum.
Similarly, Grant's position as sole shareholder of the "seller"
(ECI) and the profitable nature of that position were disclosed
in the offering memorandum.
We find that petitioners' reliance on Roberts and Grant, two
promoters of Northeast, was not reasonable, not in good faith,
nor based upon full disclosure. See Vojticek v. Commissioner,
T.C. Memo. 1995-444, to the effect that advice from such persons
"is better classified as sales promotion." The record does not
show that either Grant or Roberts possessed any special
qualifications or professional skills in the recycling or
plastics industries. While Kravitz did, in his capacity as an
attorney, deal with Roberts or Grant in three real estate
ventures, the record does not convince us that these prior
dealings, strictly limited to the real estate area in which
Kravitz was experienced, provided any reasonable basis for his
apparent blind faith in Roberts and Grant in plunging into a tax-
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