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engaged, either directly or indirectly, in the conduct of any
research or experimentation. Rather, the partnership was merely
a passive investor seeking royalty returns pursuant to the
licensing agreement. Any experienced attorney capable of reading
and understanding the subject documents should have understood
the legal ramifications of the licensing agreement canceling out
the R & D agreement. However, petitioner's tax attorney, Mr.
McDevitt, obviously failed to review diligently the offering
prior to advising petitioner to invest in Blythe I. It is also
clear from the record that petitioner failed to scrutinize
carefully the offering himself.
Secondly, in making his investment in Blythe I, petitioner
relied on the advice of his certified public accountant and tax
attorney, Mr. McDevitt, and Mr. Moore, who was a promoter for the
partnership. Mr. McDevitt made only a cursory review of the
offering and made no objection to petitioner's investment in
Blythe I. When asked at trial whether he endorsed the
investment, Mr. McDevitt stated that "endorse might be too strong
a word." Mr. McDevitt did not give petitioner a written opinion
about the investment, nor did he conduct any independent research
or consult any type of agricultural or jojoba plant expert about
the investment. Instead, he relied solely on the representations
made in the offering.
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