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Corp. In addition, the offering memorandum disclosed that Miller
"will receive substantial additional compensation for
representing PI and FMEC in connection with this transaction."
Petitioner understood that the law firm that authored the
tax opinion appended to the offering memorandum had a good
reputation. He also recognized the name of a former tax
professor from the NYU Law School in the firm's letterhead.
Petitioner says he assumed that the law firm had performed
significant due diligence.
After reviewing the offering memorandum, petitioner asked
his certified public accountant, Robert Hefter (Hefter) of Mac
Albert Bank & Co. CPA's, to review it as well. Petitioner
testified that Hefter told him that "it appeared to be sound",
that the tax opinion "appeared to be accurate", and that "it
appeared to be a valid investment based on the documents."
Petitioner proceeded to invest in Resource without further
investigation. He could not recall whether he discussed the
investment with his wife Robin, or even when she became aware of
it. Petitioner could only suggest that his wife "would have been
aware" of the investment sometime prior to signing their 1981 tax
return, which was prepared by Hefter.
Petitioner and his wife Robin do not have any education or
experience in plastics materials or plastics recycling. He did
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