Homer L. Richardson - Page 16

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          Atlantis Management Services LLC.  HGAMC obtained a 59-percent              
          membership interest.  Other members included Barton Richardson              
          and Mr. Richardson, who served as the managing member.  A second            
          limited liability company, Apache LLC, was created at some point            
          not identified in the record.  HGAMC received a membership                  
          interest in this entity of approximately 90 percent, and                    
          Mr. Richardson again served as the managing member.  Aegis sent a           
          letter to clients in June of 2000 recommending that an LLC                  
          structure be implemented to “take your future trust returns ‘off            
          the radar screen’ for audit.”                                               
               On January 10, 1997, and January 22, 1998, the board of                
          directors of HGAMC approved charitable donations to be made to              
          HGRCT of $259,888 for the 1996 year and $51,299 for the 1997                
          year.  During calendar years 1996 and 1997, HGRCT made no                   
          charitable distributions.  On January 27, 1998, the HGRCT board             
          approved charitable contributions totaling $12,994 to be made to            
          the American Cancer Society, Berea College, the Wellness                    
          Community, Young Life, the Salvation Army, and New Richmond                 
          Elementary School.  Acknowledgments from each of these                      
          organizations confirm that donations were received in 1998,                 
          although the amount in one instance appears to be $500 greater              
          than that initially approved by the board.  A similar pattern of            
          contributions continued in 1999 through 2002.                               







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