- 11 -
August 1980 through July 1981. On August 8, 1980, ABL agreed
with CAI to buy the same oil at the same price plus a commission
of 25 cents per barrel. Ashland arranged the terms for shipping
the oil, it nominated the vessels used for lifting the oil, and
it set the mode of payment for the oil. Petitioner and Dr. Young
arranged for ABL's purchase of the oil, and ABL paid them for
their services by paying CAI the spread between the back-to-back
contracts. Commissions for the shipments under the August
contracts totaled $1,064,424. The last shipment under the August
contracts was on March 3, 1981.
On January 1, 1981, CAI and ABL entered into a contract for
the monthly purchase and sale of approximately 70,000 metric tons
of oil for the 7-month period ended July 31, 1981. ABL paid the
set price directly to SNH, and ABL took delivery of the oil
directly from SNH.11 ABL paid the per-barrel commissions
directly to CAI. Petitioner and Dr. Young arranged for ABL's
purchase of the oil, and ABL paid them for their services by
paying CAI the spread between the back-to-back contracts.
ABL paid commissions to CAI by check.12 All of these checks
were payable to CAI and deposited into CAI's checking account
(the C account) at N.T. Butterfield & Son Bank (Bank) in Bermuda.
11 ABL put a provision in the back-to-back contracts that
allowed it to pay SNH directly for the oil to ensure itself that
the oil was paid for.
12 All of the commissions were due to the efforts of
petitioner and Dr. Young.
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