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included a description of the Clearwater transaction, and
discussed that with Wilson by telephone. Paulson served as
Wilson's offeree representative as to EI, and he discussed the
investment with Wilson by telephone. Wilson explained that the
conference was by telephone since he was in New Orleans and
Paulson was in Indiana in 1981. As noted above, Morton Efron was
the general partner in EI and had a substantial financial
interest in the partnership and in its management. Wayne Paulson
had introduced Wilson to Efron. See Paulson v. Commissioner,
T.C. Memo. 1995-387, concerning Wayne Paulson's brother, as to
the relationship between Efron and Paulson.
Efron was also Sorey's attorney and agent for his football
contracts in 1981. Efron had represented Sorey since he began
playing professional football in 1975. In 1981, Sorey was 26
years old. Sorey testified that Efron was involved in all of his
business decisions. Sorey learned of EI through the original
offering memorandum, which Efron sent to him. Prior to 1981,
Sorey's only investments were real estate investments in which
Efron was involved and "some land deals" with his family.
Sorey's offeree representative with respect to EI was Norman
Diamond, his accountant, who had been introduced to Sorey early
in his career by Efron. The record does not indicate that
Diamond made any extensive investigation of EI for Sorey's
benefit. Sorey also discussed EI with Cassaday, the banker who,
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