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Financial Services (CFS). CFS was involved with Utah I as well
as some other endeavors. Petitioner assumed Mr. Jones received a
commission on every transaction he did for petitioner.
Petitioner did not know whether Mr. Jones had a college education
or a background in agriculture or research and development
endeavors.
For 2 or 3 years prior to petitioners' investment in Utah I,
Mr. Jones acted as financial manager and adviser on investments
for petitioner's medical practice pension plan. Mr. Jones
advised petitioner to invest in stocks, bonds, and mutual funds,
as well as in CFS investments. One of the CFS investments was in
a real estate investment trust. Mr. Jones also prepared an
estate plan for petitioners and showed them how their investments
would grow. Petitioners received a rate of return between 10 and
20 percent on their investments during the first 2 or 3 years
while using Mr. Jones as their financial adviser. Petitioner
considered Mr. Jones a trusted adviser who gave sound advice.
Mr. Jones approached petitioner in early November 1982 about
the investment in Utah I. Petitioner was aware that there was a
substantial tax advantage from the Utah I investment in the first
year. Petitioner did not read the materials provided by the
partnership very carefully. He read an article about jojoba that
explained that there were many potential uses for it, that the
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Last modified: May 25, 2011