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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
by this reference. At the time the petition was filed,
petitioner resided in Plainview, New York.
In 1985 petitioner was hired to conduct title closings for
East Coast Abstracts, Inc., a title abstract agency located in
Mineola, New York. Petitioner worked as an independent
contractor. Steven Lieter (Lieter) and Stanley Levine (Levine)
were the agency's officers and shareholders.
At some time during 1985, Lieter and Levine organized
Consumer Equities Associates (CEA), a company whose business
initially was to broker first mortgage loans from Citibank. At
petitioner's suggestion, in early 1986 CEA entered the business
of arranging second mortgages. Acting on CEA's behalf,
petitioner would secure funds from investors to finance second
mortgage loans for borrowers with a poor credit history. An
investor's funds would be set aside in an interest-bearing
account until CEA paid them to a borrower as a second mortgage
loan and assigned the loan to the investor. In time the
borrower's credit record would improve, thereby creating the
opportunity to refinance on a first mortgage basis, and the
investor would be repaid. Petitioner, Lieter, Levine, and
Richard Cohen, the manager of CEA, each had signature authority
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