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instead to focus on more conservative investments.
Petitioner then took the offering memorandum to his
accountant and return preparer, Gerald Kabeck (Kabeck), a C.P.A.,
who read it and thought that the investment was reasonable. At
the time, Kabeck had no specialized knowledge or experience in
plastics materials or plastics recycling and no specialized
knowledge in valuing plastics recycling machines such as the
Sentinel EPS recycler. Petitioner did not pay Kabeck for his
advice.
In December 1982, petitioner signed a subscription
agreement and purchased one limited partnership unit (a 5.5-
percent interest) in Dickinson for $50,000. In signing the
subscription agreement, petitioner assumed that the purchaser
representative was Gordon.
Petitioner did not, before signing the subscription
agreement and investing in Dickinson, make any independent
investigation of the fair market value of the Sentinel EPS
recycler, nor did he seek the advice of any expert in the
plastics industry. Petitioner was influenced to sign the
subscription agreement because he assumed that Krickstein and
other medical colleagues were investing in Dickinson. However,
petitioner did not have any specific conversations with his
colleagues about either Dickinson or plastics recycling before
making the investment. Petitioner did not think that his medical
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