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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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Last modified: May 25, 2011