Investment Research Associates - Page 178




                                       - 252 -                                         
         Eulich-Management and Gateway Corp.  From 1982 to 1989, Essex                 
         distributed $788,452 to IRA, $645,028 to Holding Co., $150,899 to             
         Connolly, and $1,433,551 to Eulich-Management.                                
              IRA accumulated the money paid to it by Essex until 1983.                
         In 1983, IRA began distributing the money to Ballard, Lisle, and              
         Kanter through Carlco, TMT, and BWK, Inc., in the 45-45-10 ratio.             
         On December 31, 1984, IRA transferred its partnership interest in             
         Essex to Carlco, TMT, and BWK, Inc., in the 45-45-10 ratio.  IRA              
         did not inform the Essex partnership of the transfer and                      
         continued to receive the payments from Essex and then transferred             
         the payments to Carlco, TMT, and BWK, Inc.                                    
              Essex had no real business purpose.  It had no office,                   
         equipment, or employees and did not perform any services under                
         the "Representation and Marketing" agreements with Eulich-                    
         Management and Gateway Corp.                                                  
              Eulich's relationship with Ballard, Lisle, and Kanter was                
         longstanding.  Lisle's son was employed by one of Eulich's                    
         Vantage companies.  The Court is convinced that Eulich agreed                 
         that Eulich-Management would participate in the Essex arrangement             
         and provide services to Gateway Corp. as payment to Kanter,                   
         Lisle, and Ballard for their influence with respect to other                  
         business directed to Eulich and his corporations.  Eulich                     
         testified at trial that he caused Eulich-Management to                        
         participate in the Essex partnership because he expected that                 






Page:  Previous  242  243  244  245  246  247  248  249  250  251  252  253  254  255  256  257  258  259  260  261  Next

Last modified: May 25, 2011