Barry B. Bealor and Nancy L. Bealor, et al. - Page 77

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          of $443,415.  This note was a partial payment of the compensation           
          fee and 10-percent late charges due under the employee leasing              
          agreement.  Like earlier similar notes from Machise, this note              
          bore endorsements reflecting that it had been deemed distributed            
          to the MIT 80 partners and then credited to their obligations on            
          their notes to Intercoastal.                                                
               The following illustration depicts the purported                       
          transactions and flows of funds to which MIT 80 was a party.                
                           Purported Transactions--MIT 80                             
          A.  Investment Phase                                                        
               1.   Partners execute 10-percent notes aggregating $2.4                
                    million to Intercoastal.                                          
               2.   Intercoastal draws checks aggregating $2.4 million to             
                    investors.                                                        
               3.   Investors endorse the checks to MIT 80 as capital                 
                    investment in MIT 80.                                             
               4.   Bookkeeping entries indicate the $2.4 million in                  
                    Intercoastal checks endorsed to Intercoastal, although            
                    checks are neither endorsed nor otherwise enter banking           
                    channels.                                                         
          B.  Payroll Phase                                                           
               5.   During 1980, Machise makes weekly transfers totaling              
                    $2,243,495.73 to MIT 80 payroll account.                          
               6.   Employees and independent contractors are paid from the           
                    amounts transferred to the MIT 80 payroll account with            
                    checks signed by officers of Machise.                             
          C.  Repayment Phase                                                         
               7.   In 1984, repayment begins.  Repayments take the form of           
                    Machise demand notes of $443,415 in compensation fees             
                    and late charges issued to MIT 80.  (Although the 1984            





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