Julian O. Von Kalinowski and Penelope J. Von Kalinowski - Page 8

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          the local Rotary club, Mr. Tanaka was represented to be a member            
          of the board of governors of the Federal Reserve Bank of San                
          Francisco.  Mr. Tanaka in turn introduced Mr. Von Kalinowski to             
          Philip Siriani, a businessman who had contacts with a local bank            
          willing to finance the investment in the partnerships.  Mr.                 
          Tanaka’s position in the community and Mr. Siriani’s apparent               
          business and political contacts supplied a measure of credence to           
          the financial benefits and tax advantages purportedly offered by            
          the partnerships.  Mr. Von Kalinowski was further assured of the            
          partnerships’ legitimacy when informed that a former U.S. senator           
          was also investing.6                                                        
               Near the end of 1981, Mr. Von Kalinowski purchased limited             
          partnership interests in the partnerships.  He financed the                 
          investment through a $140,000 bank loan secured by the couple’s             
          residence.  Although the residence was titled in Mr. Von                    
          Kalinowski’s individual name and constituted his separate                   
          property, both Mr. Von Kalinowski and petitioner executed the               
          deed of trust in favor of the bank.7                                        
               Petitioner had limited, if any, knowledge of her husband’s             

               6  Former U.S. Senator S.I. Hayakawa is listed as a limited            
          partner on Capricorn’s certificate of limited partnership.                  
               7  Presumably, the bank required petitioner’s signature on             
          the deed of trust to protect its security interest from any                 
          spousal claims which petitioner may have had against the property           
          under California property law.                                              

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