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contributions when they were made, because she received in
connection with services property not subject to a substantial
risk of forfeiture under section 83.
VI. The Lakewood Plan
Mr. Cohen introduced Drs. Hirshkowitz and Desai to the SC
VEBA in 1990. Drs. Hirshkowitz and Desai both knew that the
premiums paid on the C-group product were more expensive than the
cost of term life insurance. They caused Lakewood to invest in
the SC VEBA anyway because, as they understood it, the SC VEBA
ultimately allowed Lakewood’s principals to withdraw the excess
premiums from the plan tax free by way of policy loans. All of
Lakewood’s principals are physicians, and Dr. Hirshkowitz, on the
basis of his conversations with Mr. Cohen, understood that the SC
VEBA allowed policyholders to convert their C-group term policies
to individual policies which allowed the withdrawal of the cash
value at no additional expense. Dr. Desai, on the basis of his
conversations with Mr. Cohen, understood that premiums on the C-
group product covered both term insurance and conversion credits,
and, in his capacity as a member of Lakewood’s board of
directors, would have spoken against the SC VEBA had the
conversion credits not been available. Drs. Hirshkowitz and
Desai both relied on the word of Mr. Cohen as to the validity of
the SC VEBA, seeking no independent competent professional advice
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