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amounts of money, and the funds from Mr. Hemmings' account were
used to satisfy that need in part.
The Hemmingses' Federal income tax returns were prepared by
Mr. Harris, whose firm was in Atlanta. Mr. Harris was also the
accountant for Brown Transport and for Mrs. Hemmings' father. If
Mrs. Hemmings was not available when the returns were due, Mr.
Hemmings would sign the returns for her with her consent. At
some time during this period, Mr. Hemmings explained that the
ACLI and ELMS losses were to defer income to a later period.
Mrs. Hemmings had faith in Mr. Harris, and she did not question
the tax returns. Mr. Hemmings did not explain to her the
mechanics of the transactions because he did not understand the
mechanics of the transactions himself.
Prior to 1981, Messrs. Brown and Hemmings had traded with
E.F. Hutton & Co. In approximately 1981, they opened
discretionary trading accounts with ContiCommodities, Inc.
(Conti). Mr. Hemmings traded with Conti until 1984 when Conti
liquidated their accounts creating substantial losses. In 1985
Conti sued Messrs. Brown and Hemmings, and they counterclaimed
against Conti. Between 1985 and 1994, the Hemmingses paid
approximately $8,000,000 in litigation fees in connection with
the Conti litigation. The Conti litigation was ultimately
settled in 1993. The terms of the settlement were placed under
seal and cannot be publicly disclosed. But, as a result of the
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