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B. Alleged Experts
Petitioners contend that Dooskin and Sacco provided the
requisite independent analysis of the investment. We disagree.
Dooskin and Sacco, neither of whom had any knowledge of the
plastics recycling industry, reviewed the memorandum for, at
most, 7 hours combined. Their only knowledge of SAB Foam came
from the memorandum (i.e., promotional material) and from what
petitioner told them. Dooskin testified that he informed
petitioner the investment “passed muster”, but that the economics
of the investment “was dependent upon the valuation of the
equipment”. Petitioners, however, failed to undertake the
necessary due diligence and seek a thorough and independent
analysis of the value of the recyclers despite Dooskin’s warning.
We are not convinced that Dooskin’s and Sacco’s review of the
memorandum was any more than a very limited inquiry. Neither
petitioner nor his partners made any separate payment for
professional services by Dooskin and Sacco, and consequently they
could not expect the accountants to do more than read the
memorandum for form and apparent professionalism, potential
benefits, and obvious dangers.
C. Petitioners’ Relationship With Miller and Becker
Regardless of the foregoing, petitioners contend that
petitioner’s alleged “deep and longstanding professional
relationship” with his advisers justified his reliance on them.
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