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Mr. Premji did not obtain cash for any of the above-listed
checks. He voluntarily returned the September 23 and October 1,
1990, principal and interest checks to M&L to maintain and
increase his investment.7 He attempted to cash the October 9,
1990, principal and interest checks after he learned that M&L had
filed its bankruptcy petition. He was unable to do so.
Mr. Premji did not report the $6,444 and $7,088 checks as
interest income on his 1990 Federal income tax return.
Mr. Premji learned of M&L's bankruptcy filing on October 5,
1990, from Mr. Brayer. His remarks as to the status of
investors' funds struck Mr. Premji as "sketchy", and he
understood that it would be some time before the payments would
resume, if at all. Mr. Premji did not consult an attorney,
accountant, or financial analyst in 1990 after he learned that
M&L had filed the bankruptcy petition.
Mr. Premji met with Karen Marx, another M&L investor, on or
about October 9, 1990, but he did not state the content of their
conversation.
In 1990, Mr. Premji attempted to review M&L's bankruptcy
file but was unable to do so. He attended the first meeting of
M&L creditors held on or about November 30, 1990. There is no
7 By returning the larger checks representing his total
investment Mr. Premji chose not to liquidate the investment. By
returning the smaller checks, he increased the total principal
advanced to M&L.
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