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general partner, to make short-term or GAP loans to the limited
partnerships at an interest rate of 2 percent above the prime
rate. The GAP sheets purport to record that petitioner made such
loans and that the limited partnerships paid interest to
petitioner. The record does not reflect that the limited
partnerships made payments of principal to petitioner.
Petitioner caused checks to be issued from the partnerships
payable to himself, bearing the notation "second mortgage
interest". The second mortgage interest is attributable to
second mortgage loans purportedly made by petitioner to the
partnerships. The record does not reflect the terms of any
second mortgage loans. Furthermore, there is no evidence that
petitioner transferred any funds to the partnerships in
accordance with the purported second mortgage loans.
Petitioner also caused the partnerships to pool funds to
purchase jumbo certificates of deposit during the years at issue.
A jumbo certificate of deposit is a certificate of deposit in the
amount of $100,000 or more.
Petitioner owned rental properties in the Ohio State
University and other Columbus, Ohio, areas. During the years in
issue, petitioner owned from 31 to 79 such rental properties.
Petitioner hired several independent contractors (the laborers)
to clean and repair the rental units. Petitioner would present
the laborers with their weekly paychecks which they, in turn,
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