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included a discussion describing the kickback scheme as a matter
that generally was known only to Kanter, Ballard, and Lisle.
Respondent theorized that Ballard and Lisle agreed to steer
Prudential business to The Five (and Lisle agreed to steer
Travelers business to Schaffel) with the understanding that
Kanter would share with Ballard and Lisle any fees he was able to
obtain from The Five. In other words, respondent conceded that
Schaffel, Frey, Schnitzer, and Eulich were not aware Ballard and
Lisle were using their influence to steer business to them. In
respondent’s view, Schaffel, Frey, Schnitzer, and Eulich simply
agreed to pay Kanter if he was successful in influencing his
clients and other wealthy contacts in the real estate industry to
generate business for them. Having misconstrued respondent’s
position, the STJ report repeatedly cites the testimony of
Schaffel, Frey, Schnitzer, and Eulich as compelling evidence in
support of its conclusion that Kanter, Ballard, and Lisle did not
engage in a kickback scheme.
We acknowledge the STJ report also credits Kanter and
Ballard’s testimony, and Lisle’s statement to IRS agents, that
they were not engaged in a kickback scheme. As we shall discuss
in significant detail below, it was manifestly unreasonable to
give any credence to this testimony.
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