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Becker also had a financial interest in SAB Reclamation and
SAB Recovery. He received fees in excess of $500,000 with
respect to the SAB Recycling Partnerships, more than $200,000 of
which was derived from SAB Reclamation and SAB Recycling. Becker
also received fees from individual investors for investment
advice. In addition, Becker Co. received fees from the SAB
Recycling Partnerships for preparing their partnership returns.
As Becker himself testified, petitioners could not have read the
offering materials and been ignorant of the financial benefits
accruing to him.
We find that petitioners' purported reliance on Becker was
not reasonable, not in good faith, nor based upon full
disclosure. Becker's expertise was in taxation, not plastics
materials or plastics recycling, and his investigation and
analysis of the Plastics Recycling transactions reflected this
circumstance. Selvin and David knew Becker was not expert in
plastics materials or plastics recycling, and the Zenkels and
Blount had no reason to believe otherwise. Becker testified that
he was very careful not to mislead any of his clients regarding
the particulars of his investigation. As he put it: "I don't
recall saying to a client I did due diligence * * * [Rather,] I
told [my clients] precisely what I had done to investigate or
analyze the transaction. I didn't just say I did due diligence,
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