-214-                                                   
                  In connection with the Kanter examination, IRS agents                                 
            interviewed Lisle on January 10, 1990 (Exh. 2030), and Ballard in                           
            February 1990.  Lunk, Transcr. at 1040.  After these interviews,                            
            the IRS began to examine Lisle’s and Ballard’s tax returns.                                 
                  It was during this period that (1) Kanter wrote to Ballard’s                          
            and Lisle’s children and explained that he was terminating their                            
            purported consulting agreements, (2) Ballard and Lisle began to                             
            be paid for managing Carlco and TMT, and (3) Kanter began to                                
            negotiate with Ballard and Lisle regarding the loans IRA wrote                              
            off as bad debts in 1987.                                                                   
                  During the examination process, Kanter, Ballard, Lisle, and                           
            their associates failed to produce information the IRS requested                            
            orally and/or through written information document requests.                                
            Lunk, Transcr. at 1042-1050, 1059.  Kanter produced only                                    
            documents related to Schedule A deductions under examination.                               
            Lunk, Transcr. at 1056-1057; Dion, Transcr. at 832-835, 837-838.                            
            Kanter, Ballard, and Lisle failed to produce records sought by                              
            the IRS concerning their grantor trusts and other related                                   
            entities.  Lunk, Transcr. at 1057-1058.                                                     
                  B.  IRS Summonses                                                                     
                  The IRS issued summonses to Ballard, Lisle, Schott, and                               
            Gallenberger (in her individual capacity and as an officer of                               
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