Robert E. Iles and Monica M. Iles - Page 24

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          were the only authorized signatories on the partnership's                   
          checking account at Central Trust.                                          
               On December 1, 1978, Robert Iles, et al., acquired the                 
          assets and business of Computing and Accounting Group, Inc.,                
          hereinafter sometimes referred to as CAGI.12  Before this                   
          transfer, CAGI offered computer services, computer programming              
          and design, computer installation, and other related computer               
          services.                                                                   
               In February 1979, Robert Iles, et al., bought a computer,              
          peripherals, and software from Monitor Information Systems for              
          $166,500.  This purchase was financed in part by a loan from                
          Central Trust.  Under the financing agreement, Central Trust                
          acquired a security interest in the computer and in all the                 
          fixtures and equipment located at petitioners' personal residence           
          and their business offices, in Cincinnati.  Petitioners,                    
          McCormick, and McCormick's wife were personally liable on the               
          loan.  McCormick stopped being associated with Robert Iles, et              
          al., in 1980 or later.                                                      



               12   The stipulated Dec. 1, 1978, agreement between Robert             
          Iles, et al., and CAGI states that the only two partners in                 
          Robert Iles, et al., are Robert and Peter J. Reil.  Yet, both the           
          stipulated partnership agreement of Nov. 18, 1978, and the                  
          stipulated partnership 1979 income tax return show Robert and               
          McCormick as the only two partners in Robert Iles, et al.  It               
          appears that Reil and Robert were supposed to create this                   
          partnership.  Reil decided not to participate.  McCormick learned           
          of this development and stepped in.                                         




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