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memorandum specifically warned potential investors not to rely on
the reports contained in it.
Subsequently, Keith and Mejia spoke with Gerald Grande
(Grande), a certified public accountant (C.P.A.) who had
previously given tax advice to Keith and had prepared Keith’s
income tax returns. Pursuant to this conversation, Grande had
one of his firm’s staff members review the offering memorandum.
Based upon the staff person’s review, Grande concluded that the
Hamilton transaction met the criteria for the energy tax credit
and that the offering memorandum was properly prepared. However,
Grande did not review Hamilton’s nontax business aspects. At
trial, Keith testified as follows: “Mr. Grande was not asked,
nor did he give an opinion on the investment. He was only asked
to review the document to see if it met the criteria for the
energy tax credit.” Neither Grande nor the staff person who
reviewed the offering memorandum had any experience or education
with plastics or plastics recycling. Moreover, Grande did not
contact any expert in the plastics or plastics recycling field as
part of his review. Grande also testified that he probably
referred to Hamilton as a tax shelter during his discussions with
Keith and Mejia.
Keith does not have any education or experience with the
plastics or plastics recycling industries. Keith also did not
consult with anyone who had any expertise with plastics or
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