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respect to leveraged tax shelters. Becker described a leveraged
tax shelter as "a transaction where * * * [the ratio of] the
effective * * * [tax] writeoff, which includes the value of the
tax credit, * * * [to the amount invested] exceeds one to one."
Becker Co. specialized in tax-advantaged investments. From 1980
to 1982, approximately 60 percent of the work done by Becker Co.
involved tax sheltered and private investments. Becker has owned
minority interests in general partners of numerous limited
partnerships. Prior to organizing the SAB Recycling
Partnerships, Becker owned 5 percent of the general partner of
partnerships involved in approximately 14 transactions concerning
river transportation (such as barges, tow boats, and grain
elevators).
Although investment counseling was related to his firm's
line of business, Becker did not consider himself in the business
of providing investment advice. Becker did not normally hire
other professionals for consultation or advice. In circumstances
where he believed there was a need for outside advice, he would
so advise the client. Between 30 and 40 of Becker's clients
invested in the Plastics Recycling transactions.
Becker learned of the Plastics Recycling transactions when a
prospective client presented him with an offering memorandum
concerning the transactions in August or September 1981. Becker
reviewed the offering memorandum and spoke to Miller, one of the
key figures in the transactions and an acquaintance of Becker's.
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