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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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