Jerry and Patricia A. Dixon, et al - Page 267




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          reconciling Mr. Thompson's Bauspar account because Earl LeMond,             
          Mr. Kersting's son-in-law and the manager of the Bauspar program,           
          did not keep reliable records.  Nonetheless, Mr. Kersting                   
          prepared an accounting of Mr. Thompson's Bauspar account                    
          indicating that Mr. Thompson had paid $90,769.72 under the                  
          program and had received nontaxable dividends of $27,000 and                
          Federal tax and State income tax savings (presumably from                   
          interest deductions) of $36,307.79 and $9,000, respectively.                
          Mr. Kersting further indicated that, in light of Mr. Thompson's             
          apparent dissatisfaction, he would waive the normal requirement             
          that the Bauspar program run for a 10-year period, allow                    
          Mr. Thompson to terminate the program prematurely, and pay                  
          Mr. Thompson $27,000 reflecting 3 years of "equity build-up" in             
          the program.  On the basis of his accounting, Mr. Kersting                  
          concluded that Mr. Thompson would realize a net gain of $8,538.07           
          from the Bauspar program.  Mr. Kersting advised Mr. Thompson to             
          check his accounting carefully, and that, if necessary, Mr.                 
          Kersting would make adjustments in Mr. Thompson's favor to avoid            
          a legal dispute.                                                            
               On March 31, 1986, Mr. Kersting wrote a second letter to               
          Mr. Thompson stating that the Thompsons owed a total of $11,844             
          to Avalon Acceptance Corp., Aztec Acceptance Corp., Mahalo                  
          Acceptance Corp., Lombard Acceptance Corp., and Candace, for                
          interest due on leverage notes during 1983 and 1984.                        
          Mr. Kersting's letter states in pertinent part:                             



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