Jerry and Patricia A. Dixon, et al. - Page 7

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               Chicoine and Hallett’s settlement efforts displeased                   
          Kersting.  Kersting fired Chicoine and Hallett and retained Joe             
          Alfred Izen, Jr. (Izen), to try the Kersting project test cases             
          on behalf of the petitioners.                                               
               Before the trial of the Kersting project test cases,                   
          DeCastro, on behalf of the Thompsons, and respondent’s trial                
          attorney, Kenneth W. McWade (McWade), with his immediate                    
          supervisor, William A. Sims (Sims), agreed to a secret settlement           
          they did not disclose to respondent’s management, the attorneys             
          or other test case petitioners, or the Tax Court.  The purpose              
          and effect of this settlement was to provide refunds to the                 
          Thompsons that were used to pay DeCastro’s attorney’s fees to               
          represent the Thompsons in the test case trial as consideration             
          for the Thompsons’ staying in the test case array and Mr.                   
          Thompson’s testifying at the test case trial.                               
               McWade also entered into a secret pretrial settlement with             
          pro se test case petitioners John R. and E. Maria Cravens (the              
          Cravenses) that was much less advantageous to them than the                 
          Thompson settlement was to the Thompsons or the 20-percent                  
          reductions obtained by DeCastro and by Chicoine and Hallett was             
          to other Kersting program participants.  The Cravens settlement             
          was on the order of but slightly less advantageous to the                   









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