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profitable, petitioners were left with increasing amounts of
discretionary income. Clothier began providing petitioners with
investment advice, meeting with petitioner several times each
year.
In 1981 or 1982, Clothier was introduced to the Whitman tax
shelter by Ed Margolin (Margolin), a marketer of Whitman. After
speaking with Margolin, Clothier contacted an attorney connected
with the tax shelter. The identity of the attorney is unclear,
but the parties have stipulated that the attorney was either the
attorney for Samuel Winer (general partner and tax matters
partner of Whitman) or the attorney who wrote the legal opinion
contained in the offering memorandum for Whitman. Clothier also
asked one of his other clients, Lee Connel (Connel), an engineer,
to discuss the equipment with Winer. At trial, Clothier
testified that he thought Margolin later told him: “he had gone
down and met with Mr. Winer personally and done some personal
investigation of the investment.” At that point, Clothier
proposed the investment to petitioner. Prior to these
conversations, Clothier had no knowledge of or experience in the
plastics recycling industry.
At trial, Clothier had difficulty remembering how much
information he had given petitioner before petitioner decided to
invest in Whitman. Clothier recalled telling petitioner that he
had contacted the attorney who wrote the legal opinion, that the
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