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PI plant in Hyannis, see or test a recycler, or see or test any
of the output from a recycler or the recycled resin pellets after
further processing. According to Becker, Canno endorsed the
Plastics Recycling transactions after reviewing the memorandum.
When asked whether Canno had performed any type of comparables
analysis, Becker replied: “I don’t know what Mr. Canno did.”
Becker visited the PI plant in Hyannis, toured the facility,
viewed a recycler in operation, and saw products that were
produced from recycled plastic. Becker claims that PI personnel
told him that the recycler was the only machine of its type. In
fact, the recycler was not unique; instead, as we have found in
many cases involving substantially similar machines, several
comparable machines were available in 1981 and 1982 ranging in
price from $20,000 to $200,000. See, e.g., Provizer v.
Commissioner, T.C. Memo. 1992-177.
Becker was also told that PI had put an enormous amount of
research and development (i.e., 10 to 12 years’ worth) into the
creation and production of the recyclers. When he asked to see
the cost records for some kind of independent verification,
however, his request was denied. Becker was informed that such
information was proprietary and secret, and that he would just
have to take PI’s representations as true. Becker decided to
accept PI’s representations after speaking with Miller (corporate
counsel to PI), Canno (who had never been to PI’s plant or seen a
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