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partnerships.1 Petitioner and Osserman controlled the activities
of the S-J partnerships.
For purposes of attracting investors in the S-J
partnerships, petitioner and Osserman were responsible for
preparation of an offering memorandum (OM) that was distributed
to prospective investors.
In the OM, a number of misrepresentations and omissions of
material facts were made regarding the S-J partnerships, and
significant aspects of the S-J partnerships' activities were not
consistent with representations made in the OM.
In the OM, it was noted that the S-J partnerships would
lease an 11,000-acre tract of property in Campbell County,
Wyoming (the property), which lease would include the right to
mine for coal on 500 acres and a conditional right of access to
the additional 10,500 acres if additional leases to mine coal
could be obtained from the Federal Government, which owned the
coal reserves on the 10,500 acres. It was suggested in the OM
that leases to mine coal on the remaining 10,500 acres could be
readily obtained from the Federal Government.
It was also represented in the OM that the S-J partnerships
intended to enter into agreements with experienced mining
contractors to mine for coal on the property.
1 The S-J partnerships include S-J Mineral Associates, L.P.,
S-J Mineral Associates II, L.P., S-J Mineral Associates III,
L.P., International Associates, L.P., and G & O Associates.
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