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percent demand note dated July 1, 1984. Qulart then lent
$3,035,000 to the 21 investors in MIT 84. The MIT 84 partners
then allegedly directed Qulart to pay the $3,035,000 that they
had borrowed from Qulart directly to MIT 84. MIT 84 completed
the investment circle by endorsing the $3,035,000 Machise zero-
percent demand note back to Machise. Because Machise had its own
note back, that note was retired.
In addition to the notes, the investors were required to put
up, in the aggregate, $303,500 in cash as the other one-eleventh
of their capital investment in MIT 84. None of the investors in
MIT 84 initially paid this one-eleventh in cash to MIT 84.
Instead, they issued short-term notes to BBPA, which had set up a
line-of-credit arrangement with MIT 84. The investors’ short-
term notes to BBPA were dated January 1, 1984, and were payable
July 1, 1984, with interest at the annual rate of 15 percent.
The investors fully paid these notes to BBPA in 1984. During
1984, BBPA advanced $182,100 of this amount to Machise, pursuant
to a second line-of-credit note, executed by Machise in favor of
BBPA.
During 1984, Machise made transfers totaling $4,183,049 to
the MIT 84 payroll account. The employees and independent
contractors were paid with checks on this account that were
signed by Bucci.
In addition to the payroll costs, on December 21, 1984, MIT
84 issued a check to MITA, in the amount of $400,000, as the
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