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Bank of Whittier, National Bank of Southern California (NBSC),
Southern Pacific Thrift and Loan (Southern Pacific), and
Concordia Federal Bank for Savings (Concordia Bank). Each of
these entities lent funds to petitioners and their corporations.
Mr. Bowden was personally involved in the negotiations and
arrangements for the loan transactions. Petitioners were
involved in about 200 lawsuits involving their corporations,
vending and water purifier activity, and loans.
1. Ocean Leasing
In 1983, petitioners, through their proprietorship, Vista
Vending, entered into an agreement to lease two vending machines
from Ocean Leasing. Originally, AVC sold the vending machines to
Ocean Leasing. Petitioners claimed a $6,996 depreciation
deduction for the vending machines on their Schedule C for Vista
Vending on the 1984 and 1985 tax returns.
2. MDFC
On September 12, 1984, AIC and Septech, petitioners’
corporations, entered into a transaction with a company, MDFC.
This transaction involved 10 vending machines. On the same date,
MDFC paid $167,000 to Septech for the 10 vending machines, and
then leased them to AIC for a 60-month period. At the end of the
lease, AIC had the option to purchase the machines for fair
market value. Prior to the MDFC lease, Septech sold the 10
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