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Hardin executed or caused to be executed various agreements
identifying partnerships by the name "Oceanic Leasing", followed
by Roman numerals, such as "Oceanic Leasing IV", "Oceanic Leasing
VI", and "Oceanic Leasing XXXV". The agreements named Hardin and
one or more other individuals as partners. In most cases, the
capital contribution of Hardin shown in the partnership agreement
was $1.00, while contributions to be made by other partners were
typically in the thousands of dollars. As Hardin secured
additional investors, he used the funds of those investors to
make payments to earlier investors, thus operating the activity
as a so-called "Ponzi" scheme. In this regard, he created or
caused to be created various fictitious equipment leases,
fabricating or forging the identities of various businesses.
In or about October 1987, Hardin prepared and caused to be
filed a Form 1065, U.S. Partnership Return of Income, in the name
of Oceanic Leasing for 1986. The Form 1065 showed the address of
Oceanic Leasing as 3020 Bridgeway, Sausalito, California 94965
(the Sausalito address), and its employer identification number
(EIN) as 94-2870681. The return reported a loss of $454,383,
allegedly arising out of equipment leasing transactions. The
Form 1065 attached copies of 21 Schedules K-1 for various
investors, reporting alleged distributable shares of ordinary
loss and tax credits. The persons shown as partners on the
Schedules K-1 attached to the Form 1065 were only a few of the
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