- 65 -
However, as the Court previously determined, the stated
purchase prices for a partnership’s “breeding cattle” greatly
exceeded those cattle’s fair market value. Neither were these
arm’s-length transactions. Jay Hoyt, as managing general
partner, represented each partnership in these transactions and
other Hoyt organization entities “sold” and then “managed” the
“breeding cattle” that a partnership had purportedly purchased.
The Hoyt organization greatly inflated the stated purchase prices
in order to increase the potential tax benefits for investors.
In addition, as was noted earlier, the Hoyt organization
well before 1987 could never properly account for all the
specific individual breeding cattle that purportedly were
“purchased and owned” by the numerous cattle-breeding
partnerships it organized and operated over the years. This
manifested itself in the many accounting deficiencies and
irregularities in the Hoyt organization’s cattle management and
record-keeping practices. Indeed, petitioners have been unable
to establish that breeding cattle existed from 1987 through 1992
in numbers corresponding to those purportedly purchased and owned
by all of the cattle-breeding partnerships.
The Hoyt organization further allowed a number of defaulting
investors to walk away from their partnership’s alleged recourse
37(...continued)
of the seized documents.
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