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employed by the U.S. Treasury Department in the Office of Tax
Legislative Counsel, and then as a full-time member of the
faculty of the NYU Law School and editor in chief of the Tax Law
Review. Over the years, Maxfield and Taggart exchanged
information concerning investment opportunities that they
considered interesting. Taggart owned a 6.66-percent interest in
a second-tier Plastics Recycling partnership. Maxfield did not
consider Taggart to be an expert in engineering or plastics
recycling.
Maxfield estimates that in 1981 he spent 50 to 75 or more
hours investigating the Plastics Recycling transactions. His
investigation involved reading the offering memorandum and
questioning Roberts and Taggart. Scheduling conflicts prevented
him from visiting PI until 1982. However, another attorney at
Sann & Howe, Roger Wible (Wible), visited PI in 1981 and reported
his observations to Maxfield. Maxfield was told by Roberts and
persons at PI that competitive machines were not as efficient as
the Sentinel EPE recycler and that the owners of the other
machines had trouble placing them with end-users.
Maxfield was concerned with various aspects of the Plastics
Recycling transactions, such as how Roberts, as a promoter, would
profit from the transactions. In Maxfield's experience,
oftentimes promoters of tax advantaged investments were highly
compensated regardless of the success of the investment.
Maxfield understood from Roberts that the source of Roberts'
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