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from those partnerships in the respective amounts of $97,800,
$97,375, and $110,000. SAB Management received fees of
approximately $500,000 as the general partner of the SAB
Recycling Partnerships. In addition, Becker Co. prepared the
partnership returns and Forms K-1 for all of the SAB Recycling
Partnerships and received fees for those services.
The offering memoranda for the Partnerships also allocate
7.5 percent of the proceeds from each offering to the payment of
sales commissions and offeree representative fees. In addition,
the offering memoranda provide that the respective general
partners "may retain as additional compensation all amounts not
paid as sales commissions or offeree representative fees."
However, neither SAB Management nor Becker retained or received
any sales commissions or offeree representative fees. Instead,
after the closing of each SAB Recycling Partnership, Becker
rebated to each investor whose investment was not subject to a
sales commission or offeree representative fee an amount equal to
7.5 percent of such investor's original investment.
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)
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