Daniel L. and Ingrid N. Carroll - Page 10




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          to 1981.  Miller recommended that Roberts employ Taggert and his            
          firm as counsel to the general partner of Hyannis Recycling                 
          Associates, the initial plastics recycling partnership.  Taggert            
          and other members of his firm, Windels, Marx, Davies & Ives                 
          (WMDI), prepared private offering memoranda, tax opinions, and              
          other legal documents for Clearwater and over 15 other plastics             
          recycling partnerships.  Taggert acquired a 6.66-percent interest           
          in a second-tier Plastics Recycling partnership but only after              
          his representation of Clearwater and other recycling partnerships           
          had ended.                                                                  
               Robert Gottsegen (Gottsegen) was a businessman active in the           
          plastics industry and a long-time business associate of Bambara.            
          Miller represented Gottsegen and Bambara in several business                
          transactions.                                                               
          C.   The Private Offering Memorandum                                        
               Clearwater distributed to potential limited partners a                 
          private placement memorandum dated November 17, 1981.  The                  
          offering memorandum listed significant business and tax risk                
          factors associated with an investment in Clearwater.                        
          Specifically, the offering memorandum stated: (1) There was a               
          substantial likelihood of audit by the Internal Revenue Service             
          (IRS), and the purchase price paid by F&G to ECI probably would             
          be challenged as being in excess of fair market value; (2) the              
          partnership had no prior operating history; (3) the general                 





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