Crop Associates-1986, Frederick H. Behrens, Tax Matters Partner - Page 11




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          individuals with a connection to AMCOR.  The following are                  
          pertinent aspects of those examinations and investigations.                 
               Investigation of Paul Hays                                             
               In May 1988, George Martin was a special agent working in              
          respondent’s Criminal Investigation Division (CID) and assigned             
          to respondent’s Dallas, Texas, district, with post of duty in               
          Amarillo, Texas.  In May 1988, Mr. Martin was assigned the case             
          of Paul Hays, a farmer, who, acting through his attorney, Wendell           
          Davies, had approached the Internal Revenue Service with                    
          information to disclose concerning a tax shelter scheme in which            
          Mr. Hays and several other farmers had participated.  Mr. Martin            
          investigated Mr. Hays’ information, and that information led him            
          to AMCOR and certain employees and agents of AMCOR.  On June 6              
          and June 14, 1988, with the consent of Mr. Hays and Steve                   
          Sterquell, an accountant employed by Mr. Hays, Mr. Martin                   
          monitored and recorded conversations concerning AMCOR among Ted             
          Frame, an attorney representing AMCOR, and Messrs. Hays,                    
          Sterquell, and Schreiber.  Mr. Martin came to suspect that AMCOR            
          was operating an “illegal tax shelter” and that others, including           
          Mr. Frame, had committed crimes in connection therewith.  On                
          June 6, 1988, Mr. Martin learned that a civil examination of                
          AMCOR had been undertaken by personnel assigned to respondent’s             
          Examination Division in Laguna Niguel, California (the Laguna               








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