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$80,000 to Mr. Kersting's subchapter S leasing corporations in
the 1970's.
In 1977, Mr. Alexander, a minority shareholder of First
Savings, met with Mr. Kersting to discuss the possible
acquisition of the company. Mr. Alexander participated in the
acquisition of First Savings and added to his First Savings stock
holdings in the process. Mr. Alexander participated in certain
Kersting programs at issue in Dixon II during the taxable years
1974 through 1977.
In 1980, Mr. Alexander brought suit against Mr. Kersting
in Hawaii State court seeking the repayment or return of
approximately $450,000 that Mr. Alexander claimed he had lent to
or invested with Mr. Kersting. Mr. Kozak initially represented
Mr. Alexander in this litigation. Mr. Kersting and/or his
companies eventually filed counterclaims in excess of $4 million
against Mr. Alexander. Mr. Moseley represented Mr. Kersting in
the Alexander litigation.
In March 1982, Mr. Alexander received a telephone call from
Internal Revenue Service Special Agents George Scott and Mike
Duncan, who were interested in questioning Mr. Alexander
regarding Mr. Kersting's various programs. The record does not
reflect whether Mr. Alexander ever agreed to be questioned by the
agents.
The Alexander/Kersting litigation eventually was submitted
to arbitration during a week-long proceeding in July 1987.
During the arbitration proceeding, Mr. Kersting discovered that
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