Dori R. Merriam, Transferee - Page 7

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               Petitioner signed several checks made payable to the IRS on            
          which appeared Napa’s taxpayer identification number.  Petitioner           
          also signed some Napa checks payable to lawyers and to James                
          Merriam’s bookkeeper.  James Merriam frequently signed                      
          petitioner’s name on Napa documents, including checks.                      
               Ted Merriam prepared articles of dissolution for Napa on               
          October 17, 1986.  Petitioner’s signature as president and Ted              
          Merriam’s signature as secretary on this document were notarized            
          by Diane Lalosh (Lalosh), an administrative assistant of James              
          Merriam.  Ted Merriam did not talk to petitioner about the                  
          decision to liquidate Napa.                                                 
               James Merriam was a party to many lawsuits in which it was             
          alleged that he had violated securities laws.  Petitioner knew              
          that James Merriam was a party to many lawsuits.  Petitioner,               
          James Merriam, and Napa were defendants in a lawsuit in which               
          Burton Finkelstein (Finkelstein), an attorney, represented                  
          petitioner and James Merriam.  Petitioner signed a $25,000 Napa             
          check payable to Finkelstein to retain him for legal services.              
          Finkelstein represented petitioner in a deposition taken in that            
               Petitioner received substantial amounts each month from                
          Napa, totaling about $1.5 million in a 2-year period before                 
          September 30, 1986.  In June 1986, about 3 months before Napa               
          liquidated, petitioner bought a Rolls Royce automobile.                     

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