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what was to become the purported research and development
contractor to the partnership, U.S. Agri Research & Development
Corp.
In all, Mr. Trimboli sold investments in the partnership to
approximately seven of his clients. He received commissions for
selling these interests in the partnership, similar to the
commissions he received for selling other types of investments.
Mr. Trimboli was retained by Arid Land to prepare the 1983 tax
return for the partnership as well as to prepare the Schedules
K-1, Partner’s Share of Income, Credits, Deductions, etc., sent
to the individual investors reflecting their share of the losses
claimed by the partnership on its own return. In preparing the
return and the schedules, Mr. Trimboli relied on financial
information provided by Mr. Cole and on the opinion letter given
to Mr. Cole by outside counsel, discussed below. Mr. Trimboli
subsequently prepared tax returns for individual clients,
claiming the losses reflected on the Schedules K-1 as deductions.
Mr. Trimboli had no experience in farming or in research and
development ventures. He could not recall the exact nature of
Mr. Cole’s experience which would be relevant to operating a
jojoba operation, other than the fact that he knew that “there
was some experience.”
A private placement memorandum for investments in the
partnership, dated December 1, 1983, was distributed to each of
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