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investment. Reimann purportedly relied on Bachmann because his
father's company relied on and trusted Bachmann.
Although Reimann read the Scarborough offering memorandum
and the appended evaluations, he did not focus on or pay heed to
the risks and caveats raised therein. Reimann noticed the
warning that there might be an IRS audit, but claims that he did
not notice the warning that the IRS might challenge the value of
the recyclers. Reimann did not conduct an independent valuation
of the recyclers, nor did he determine if the recyclers had been
placed with end-users prior to his making the investment. He did
nothing more than ask Bachmann some questions about the offering
memorandum. Reimann claims he did not know whether Bachmann,
Schwartz was being compensated in any manner with respect to the
Scarborough partnership investment, nor did he ask if they were
receiving compensation of any sort.
2. Edward Brodie and Estate of Alana Brodie, Docket No. 35003-86
Petitioners Edward Brodie and his wife, Alana, resided in
Englewood Cliffs, New Jersey, at the time their petition was
filed. During 1981, Edward Brodie (Brodie) was a salesman at his
family's business, M & M Luggage Co., Inc. (M & M Luggage).
Alana Brodie was not employed outside the home. On their 1981
Federal income tax return, the Brodies reported total income from
wages, interest, dividends, capital gains, and other sources in
the amount of $123,308. Consequently, in the absence of
significant deductions or credits, they were subject to payment
of Federal income taxes in substantial amounts.
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