John Marretta - Page 3

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          incorporated herein by this reference.  At the time the petition            
          was filed in this case, petitioner resided in Lavallette, New               
          Jersey.                                                                     
               In November 1991, petitioner became an investor in CNC                 
          Trading Company of Marlton, New Jersey (CNC).  CNC was owned and            
          primarily operated by Charles N. Cugliari (Cugliari).  CNC was              
          purportedly a food broker and distributor.  Cugliari and CNC                
          salespeople sold “investments” in CNC “contracts” for                       
          approximately $25,000 each.  Contracts were also sold in half               
          shares for approximately $12,500 each.  Cugliari and CNC                    
          salespeople told investors who purchased contracts that CNC used            
          their money to purchase food products each month for subsequent             
          sale to food wholesalers and supermarket chains.  CNC had                   
          approximately 2,800 investors.                                              
               CNC sent cash or checks to its investors consisting of a               
          fixed amount of money each month that was represented to be half            
          of the profits made by CNC on its sales of food products.  Unless           
          an investor specified otherwise, CNC would retain the investor’s            
          principal investment and continue paying that investor monthly              
          cash or checks.  An investor could obtain the investor’s                    
          principal investment back from CNC upon request.                            
               CNC was operated so as to permit investors to evade the                
          payment of Federal income tax on the income they received from              
          CNC.  CNC did not report to the Internal Revenue Service (IRS)              






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