Phyllis E. Campbell - Page 6

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          sole shareholder of Campco, Inc., a C corporation.  Campco, Inc.,           
          reported taxable income of $16,005 in its Federal income tax                
          return for the fiscal year ending August 31, 1983.                          
               London Metal Exchange Transaction                                      
               Sometime in late 1983, Mr. Campbell had discussions with Tom           
          Meyers, the CFO of Refco Foods, Ltd., with respect to what has              
          been described as a London straddle (London straddle).  The                 
          London straddle was conducted through Van Lessen Richardson & Co.           
          (Van Lessen), a brokerage firm controlled by David Lamb, who was            
          one of the individuals organizing the London straddle.  Mr.                 
          Campbell stated that he funded the London straddle by                       
          transferring approximately $2.6 million from petitioner’s Refco             
          trading account to the Van Lessen account in 1983.  Mr. Campbell            
          explained in his testimony that he took roughly $2.6 million from           
          the trading account in his wife’s name at Refco as part of the              
          scheme to generate offsetting losses and he subsequently used               
          those funds to satisfy the losses in Refco Foods Too and Refco              
          Foods, Ltd.  Petitioner was not aware that Mr. Campbell withdrew            
          the $2.6 million.  Nor did Mr. Campbell consult her about making            
          the withdrawal.  The funds were never returned to the account in            
          petitioner’s name and never benefited petitioner.                           
               The purported losses generated by the transactions on the              
          London straddle were fictitious.  During preparation of the                 
          Campbells’ 1983 joint income tax return, Jack Esses, a tax return           






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