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Wells, Rich, Greene. Fredericks hired an attorney, Robert
Stephen Cohen (Cohen), to negotiate a settlement of his contract,
and Cohen enlisted the assistance of Becker. The Fredericks and
Cohen met with Becker, and they determined that his contract was
worth between $3.5 million and $4 million. Cohen then negotiated
a settlement package that had a present value, at that time, of
approximately $1,750,000. Under the terms of the settlement,
Fredericks was to continue as a consultant to Wells, Rich, Greene
for a 4-year period at $250,000 a year, and thereafter he would
receive $30,000 a year for life.
Cohen told Fredericks that Becker could give Fredericks and
his wife Stephanie financial advice, investment advice, and tax
advice. Fredericks was familiar with one of Becker's earlier
investment ventures, a physicians' leisure magazine in which
Fredericks had placed advertisements for clients. He and Becker
entered into a retainer agreement for tax services. Becker Co.
agreed to provide income tax planning and tax return preparation
services for 1982, in addition to recommending tax-oriented
investments. The agreement provided:
[Becker Co.] will perform an analysis of your past and
present tax status in order to properly reflect on your
current and future tax shelter needs. [Becker Co.]
will continually seek such tax sheltered investments
which are appropriate for you and which make sense from
an economic point of view.
Robert Steele (Steele) of Becker Co. handled the Fredericks'
account. Fredericks dealt with Steele on a regular basis and met
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