James J. Coyle - Page 6

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               Regal sold new mobile homes either from inventory located at           
          its business premises or from orders placed with mobile home                
          manufacturers.  Regal also sold and traded used mobile homes.               
          Mobile homes are transported on detachable wheels and axles.                
          Upon the sale of a mobile home, a set-up crew provided by Regal             
          installed the mobile home and removed the wheels and axles.  The            
          wheels and axles were then returned to Regal.                               
               Mr. Coyle has been the president and a stockholder of Regal            
          since its incorporation in 1983.  In addition to preparing                  
          customer purchase orders for Regal, Mr. Coyle has been a salesman           
          for Regal, and he hired and fired Regal’s employees.  During the            
          years at issue, Mr. Coyle was at the Regal worksite on most                 
          workdays.  Mr. Coyle was a majority shareholder with control over           
          Regal.  He acted on behalf of Regal, and Regal acted through him.           
          Mr. Coyle signed Regal’s Federal income tax returns.                        
               After the sale of a mobile home and the return of the wheels           
          and axles to Regal, Regal sold them to various purchasers                   
          including Marilyn and Robert Roach (Mr. and Mrs. Roach), who                
          owned and operated Bob Roach Mobile Home Services, Inc. (Roach              
          Mobile Home), Jerry Lee Gibson (Mr. Gibson), and Mr. Charles                
          Vernon Pearce.  Roach Mobile Home began purchasing wheels and               
          axles from Regal in April 1991.  Regal sold the wheels and axles            
          for cash, which is the industry custom.  All of Regal’s employees           
          were authorized to sell the wheels and axles in exchange for cash           

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Last modified: May 25, 2011