Charles F. Sutter and Cheryl Sutter - Page 8

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          Investors (DDI).  In turn, a check in the same amount was issued            
          from petitioners' personal checking account (signed by Cheryl               
          Sutter), payable to Columbus.  Charles Sutter signed a "Promisary           
          [sic] Note (Interest)" payable to DDI.  Except for the date,                
          maker, holder, and amount, the note he signed in connection with            
          his Columbus policy is substantially identical to the note signed           
          by his wife in connection with her Columbus policy.  Charles                
          Sutter allowed his Columbus policy to lapse after the initial               
          period of coverage, as was his option.  He never paid any other             
          premium on the policy.  Shortly after being executed, the note to           
          DDI was repaid by SBTA, a Wyoming corporation controlled by                 
          Daniel Schwab and Vance Schwab.  Charles Sutter never signed a              
          note payable to SBTA, or made any payments to SBTA, in connection           
          with this transaction.                                                      
               DDI is an unincorporated business owned and controlled by              
          Evan and Marie Walton.  Through DDI, the Waltons provided funds             
          to customers or clients of the Daniel Schwab Agency under                   
          circumstances similar to those described above.  The Waltons                
          dealt directly with one of the Schwabs and not with either                  
          petitioner, or similarly situated individuals.  In this case, and           
          in numerous similar transactions, the Waltons were repaid by                
          SBTA, as expected and in accordance with their arrangements with            
          the Schwabs.                                                                







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