Investment Research Associates - Page 166




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         Schaffel 1 percent of the gross amount of the contract price of               
         any construction contract that Schaffel helped obtain for their               
         companies.  Schaffel then executed a letter agreement to pay 50               
         percent of the fees he received for construction jobs in which                
         Kanter or his "associates" had been instrumental or helpful in                
         obtaining for Torcivia or Walters.  Although the letter agreement             
         is addressed to IRA, it is clear that the agreement was with                  
         Kanter and the reference to associates was to Ballard and Lisle.              
              As a result of the introduction to Ballard and Lisle,                    
         Schaffel began doing millions of dollars of business with                     
         Prudential, including construction contracts and financing for                
         Torcivia and Walters, as well as others.  From 1979 to 1983,                  
         Schaffel paid IRA $1,184,876 from these Prudential transactions.              
              After Ballard and Lisle left Prudential, Schaffel stopped                
         negotiating contracts with Prudential.  Instead, he began                     
         negotiating contracts for Torcivia and Walters with Lisle at                  
         Travelers.  Schaffel paid IRA $213,750 from the first Travelers               
         transaction.  After that payment, however, Schaffel stopped                   
         paying IRA a share of the fees he earned on Travelers                         
         transactions.  When Kanter contacted Schaffel and inquired as to              
         why Schaffel was not remitting half the fees from Travelers                   
         transactions to IRA, Schaffel claimed that the prior agreement                
         related to Prudential transactions did not apply to Travelers                 
         transactions.  In the August 28, 1984, letter to Schaffel, Kanter             






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