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were placed with end-users that did not have sufficient amounts
of scrap ever to pay off the notes on the machines. There is no
evidence that FMEC Corp. ever made payments to end-users although
on occasion PI made some payments for scrap produced by end-
users.
Although the offering memorandum represented that the
Sentinel EPE recycler was a unique machine, it was not.
Specially designed systems for densifying polyethylene and
polystyrene were commercially available prior to 1981 from such
companies as Cumberland Engineering Division of John Brown
Plastics Machinery and the NRM Corp. Ranging in price from
$20,000 to $200,000, other plastics recycling machines available
during 1981 included the Foremost Densilator, Nelmor/Weiss
Densification System (Regenolux), Buss-Condux Plastcompactor, and
Cumberland Granulator. See Provizer v. Commissioner, T.C. Memo.
1992-177. The Regenolux, for example, was fully capable of
recycling expanded polyethylene or polystyrene, and worked better
than either the Sentinel EPE or EPS recycler. It sold for
$38,000 in 1981.
C. Richard Roberts
Roberts is a businessman and the general partner in
Northeast and many other limited partnerships that leased and
licensed Sentinel EPE recyclers. He also is a 9-percent
shareholder in F & G Corp., the corporation that leased the
recyclers to Northeast. From 1982 through 1985, Roberts
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