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kickback payments through loans from IRA to Ballard and Lisle,
their family members, and grantor trusts. Although the STJ
report mentions that loans were extended to Ballard and Lisle,
individually, as well as to their family members, no attempt was
made to quantify those loans, and there is little indication any
consideration was given to respondent’s argument these loans were
shams; i.e., the loans were not properly documented, no principal
or interest was ever paid on the loans, and some of the loans
ultimately were written off as bad debts or sold for $1.
The STJ report, at 79, does include a brief discussion of
the validity of loans to Ballard’s and Lisle’s grantor trusts.
The STJ report, at 79 note 32, rejects Kanter’s testimony that
IRA made nonrecourse loans to Ballard’s and Lisle’s grantor
trusts because the movie investments underlying those loans “were
particularly promising”. The STJ report acknowledges a lender
operating at arm’s length would have demanded some financial
guaranty or collateral from the grantors of those trusts before
extending those loans. The STJ report also acknowledges that
Ballard and Lisle were valuable business contacts to Kanter and
Kanter traded on those contacts to obtain “business arrangements
with other third parties”. Id. at 79. Despite these
observations, the STJ report simply concludes Kanter “may have
helped to arrange favorable loans for Ballard and Lisle out of
gratitude for their friendship and the business advantages that
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