Albert M. Graham and Martha A. Graham - Page 10

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          the preamble and signature page of the partnership agreement and            
          listed petitioners’ two children as partners with a combined                
          interest in the partnership of 22.375 percent.                              
               Petitioner attended partnership meetings.  Smith contacted             
          petitioner, not his children, regarding partnership decisions and           
          other partnership matters.  Partnership distributions and                   
          correspondence were sent to petitioner’s office.  Petitioner was            
          the only person who made cash contributions to the partnership              
          when there was a cash call.                                                 
               On February 24, 1995, the Anises signed a settlement                   
          agreement on behalf of the partnership.  Under the settlement               
          agreement, on May 30, 1995, the Stovers transferred: (1) $229,538           
          to the Smith client trust account, (2) a 50-percent interest in             
          the Vivienda Ranch, a 160-acre orchard located in Riverside,                
          California (the Riverside property), to the Anis partnership, and           
          (3) a 25-percent interest in a 40-acre farm in Kansas to the Anis           
          partnership.                                                                
               On June 6, 1995, Smith wrote two checks from his client                
          trust account totaling $47,443.51; one check for $23,721.76                 
          payable to Drew Graham, and the other check for $23,721.75                  
          payable to Allison Graham.  The sum of these two checks equaled a           
          22.375-percent interest (less expenses) in the $229,538 from the            
          Stovers.  On June 23, 1995, petitioners’ children cashed the two            
          checks and had them reissued as cashier’s checks payable in the             






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