M.J. Wood Associates, Inc. - Page 4

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            Christensen was also found guilty of conspiracy, obstruction of                             
            justice, and mail fraud.  The corporation was found guilty of                               
            conspiracy and aiding and assisting in the preparation of a false                           
            corporate tax return for the fiscal year ending September 30,                               
                  On October 29, 1997, the U.S. District Court for the                                  
            District of Nevada (District Court) pronounced sentence on                                  
            petitioners.  Petitioners were ordered to pay fines and make                                
            restitution of civil tax liabilities to the Internal Revenue                                
            Service for the tax years 1972 through 1993 (which years included                           
            the years in issue before this Court).  Specifically, the                                   
            District Court ordered the following criminal monetary penalties                            
            and restitution of civil tax liability:                                                     

            Lonnie C. Christensen                      M.J. Wood                                        
            Fine:  $150,000                            Fine:  $1,000,000                                
            Restitution:  $3,794,773 (IRS)1            Restitution:  $3,794,773 (IRS)                   
                  1This figure represents $1,707,573 in income tax                                      
            deficiencies and $2,087,200 in interest.  The restitution figures                           
            were expressed as a total amount jointly and severally due by the                           
            individual and corporate defendants.  The District Court did not                            
            specify whether the amounts are attributable to a particular                                
            defendant/taxpayer or taxable year.                                                         

            The District Court further held that the defendants were jointly                            
            and severally liable for restitution, but each defendant was                                
            individually liable for the fine.                                                           

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