Richard J. and Melodie D. McKeever - Page 7




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            advised petitioners not to obtain veterinary examinations of any                           
            horses purchased from him or through him.  Petitioners did not                             
            have a veterinarian examine any of the horses purchased from Mr.                           
            Minter either prior to or immediately after their purchase.                                
                  During 1991, Mrs. McKeever hired Diego Palacio as a trainer                          
            for petitioners’ horses.  Mr. Palacio introduced petitioners to                            
            Carlos Cortelezzi, D.V.M., who became petitioners’ mentor and                              
            principal adviser concerning their horse activity.  Dr.                                    
            Cortelezzi first saw petitioners’ horses in 1993, and since then,                          
            he has given petitioners general advice on improving the quality                           
            of their herd.5  He also advised them to purchase several mares                            
            in 1994 from a third party.  Several younger horses, including El                          
            Ni�o Cisco de Norco, were purchased with the mares.  The total                             
            purchase price of the horses purchased in 1994 was $25,000.                                
            Breeding Activities                                                                        
                  Since the acquisition of their first mare in 1987,                                   
            petitioners have attempted to expand their herd through breeding,                          
            with mixed results.  A number of setbacks have hampered                                    
            petitioners’ attempts to breed their horses.                                               



                  5Petitioners generally have followed Dr. Cortelezzi’s                                
            advice.  However, when Dr. Cortelezzi was out of the country for                           
            3 years, petitioners made their own decisions regarding which                              
            animals to use for breeding.  Petitioners have negotiated with                             
            Dr. Cortelezzi regarding purchases of breedings from his                                   
            stallion, and Dr. Cortelezzi co-owns at least one of petitioners’                          
            horses.                                                                                    





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