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recyclers. Burstein owns a 2.605-percent interest in Empire
Associates and a 5.82-percent interest in Jefferson Recycling
Associates, also partnerships that leased Sentinel recyclers.
Burstein also was a client and business associate of Elliot I.
Miller (Miller), the corporate counsel to PI.
Each of the offering memoranda for Clearwater and Poly
Reclamation states that the general partner will receive fees
from the partnership in the amount of $60,000. In addition, each
of the offering memoranda provides that the general partner "may
retain as additional compensation all amounts not paid as sales
commissions or offeree representative fees". According to the
offering memoranda, 10 percent of the proceeds from each offering
were allocated to the payment of sales commissions and offeree
representative fees.
The offering memoranda list significant business and tax
risk factors associated with investments in the Partnerships.
Specifically, the offering memoranda state: (1) There is a
substantial likelihood of audit by the Internal Revenue Service
(IRS) and the purchase price paid by F & G Corp. to ECI Corp.
probably will be challenged as being in excess of fair market
value; (2) the Partnerships have no prior operating history; (3)
the general partner has no prior experience in marketing
recycling or similar equipment; (4) the limited partners have no
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Last modified: May 25, 2011