David D. Parrish - Page 4

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          petitioner used to lease a Cadillac, M&L made monthly payments of           
          $6,000 to petitioner.  Petitioner routinely reinvested portions             
          of these funds, and he borrowed funds from banks to make                    
          additional investments in M&L.  During his tenure with M&L,                 
          petitioner made numerous solicitations to potential investors               
          (i.e., associates, friends, and relatives).  These solicitations            
          resulted in over $1 million of investments in M&L.  In return for           
          these investments, brokers, investors, and M&L paid petitioner              
          finder's fees of varying amounts.                                           
               In October of 1990, M&L filed a bankruptcy petition with the           
          U.S. Bankruptcy Court for the District of Colorado.  On December            
          18, 1990, the bankruptcy court removed M&L as debtor in                     
          possession and appointed a trustee.  The trustee began a 3-month            
          investigation of M&L's financial activities that revealed M&L (1)           
          was operating ponzi and check-kiting schemes and (2) had no                 
          inventory from which creditors' claims could be satisfied.  On              
          July 17, 1991, petitioner filed a bankruptcy petition with the              
          U.S. Bankruptcy Court for the District of Colorado.                         
               To recover funds for M&L creditors, the trustee commenced              
          adversarial proceedings against M&L investors and officers and              
          alleged that these investors and officers had received                      
          preferential transfers or fraudulent conveyances.  In August of             
          1991, the bankruptcy court assigned the accounting firm of                  
          Patten, MacPhee & Associates, Inc. (the firm) to assist the                 





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