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memberships in the club. They directed their marketing
efforts toward individuals who were the principals of
"small to medium-size Texas corporations that were
expanding their business activities into the Southern
California area." Mr. Dixon and petitioner caused the
promotional booklet described above to be prepared, and
they drew up a list of prospective buyers. They sent
letters and copies of the promotional booklet to the
prospective buyers on the list, and shortly thereafter
they made followup contacts with those persons.
During the period from May or June of 1985 through the
end of that year, Mr. Dixon, petitioner, and Mr. Armstrong
encouraged a number of prospective buyers to fly from Texas
to Southern California to visit the project. Vernon paid
for their airfare to California, and the joint venture paid
for their expenses in California. An individual who was
employed by the club to manage the project, Mr. Michael
Osuna, was responsible for attending to the needs of the
prospective buyers while they were staying at the project.
On September 19, 1985, the joint venture transferred
to the beach club the portion of the Moonlight Beach
Property which included the six condominium units. The
deed for the transfer was recorded by the club on
December 3, 1985. The club took title to the Moonlight
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