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but relied upon Bruce to look after his interests.
Moreover, the dealings between Fred or Bruce and the
partners reveal no explanation of Machise's financial position
and prospects, as well as a conspicuous failure of the partners
to ask about those prospects, as would have been appropriate if
there was any actual expectation that Machise would eventually
pay its deferred obligations to the partnerships. Fred has
insisted that the partners were kept fully aware of all that went
on with respect to the partnerships. The record shows otherwise.
We accept the investors' testimony that they only met
infrequently with BBPA and knew very little about what was going
on in their partnerships.
There is thus no credible evidence of arm's-length
negotiations. The evidence instead demonstrates that Fred, with
Bruce’s help, ran the whole show. Fred and Bruce induced their
clients to participate in the employee leasing arrangements with
the promise of substantial tax advantages. The participants--
Bucci, Machise, the investors and the partnerships--did as they
were told by Fred and Bruce and accepted the figures provided in
memoranda from BBPA. They understood that Fred and Bruce would
attend to the details, but Fred, and to some extent Bruce, were
the only persons who understood those details.
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