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petitioner, would not have an ownership interest in the Sley
Corporations.
Investments
In 1978, after Harry died, Ben started to become interested
in learning about investments and began going to seminars and
reading financial publications. In 1979, Ben began taking an
active role in the investment decisions of the Sley Corporations.
Ben devised investment strategies for the Sley Corporations. On
September 20, 1979, Ben bought 1,750 Krugerrands at a cost of
about $700,000 for the Sley Corporations. On October 3, 1979,
Ben sold the 1,750 Krugerrands at a profit of about $40,000 for
the Sley Corporations. On October 4, 1979, Ben bought 38
diamonds at a cost of $2,369,190 for the Sley Corporations. On
October 9, 1979, Ben bought another 1,750 Krugerrands at a cost
of about $700,000 for the Sley Corporations. At some later date,
Ben and petitioner traveled to New York to receive the diamonds.
Each of them wore a money belt that contained more than $1
million worth of diamonds, which they carried to Washington,
D.C., and then put into the Sley Corporations’ safe deposit box
in a Washington, D.C., bank. Ben received a Gemological
Institute of America (hereinafter sometimes referred to as GIA)
certificate for each diamond. A GIA certificate is a written
description of a diamond’s physical characteristics. At various
other dates, Ben bought (in 1979 and 1980) and sold (in 1980)
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