-92-
related business. Exh. 223. BJF Partnership is discussed in
greater detail below.
In many instances, Frey’s limited partnerships acquired an
apartment complex, renovated and converted it into condominium
units, and sold the condominium units to individual purchasers.
Frey explained that he purchased apartment buildings at their
rental value and, after refurbishing and converting the
apartments to condominium units, he was able to turn a profit by
selling the units to individual owners. Frey, Transcr. at 659.
Frey and/or another entity owned by him also typically earned
certain development and management fees on condominium
conversions. The development fees were for Frey’s and/or his
entity’s services in managing and supervising the renovation and
conversion work on the property, and the management fees were
paid for their services in assisting the property’s condominium
association manage the property following the property’s
conversion.
After successfully engaging in his first condominium
conversion project in Illinois in 1978 known as Moon Lake
Village, Frey consulted with Kanter to obtain tax advice in
connection with that project. Kanter was not involved as an
investor or partner in the Moon Lake Village project. Frey,
Transcr. at 662-663. During their meeting or shortly thereafter,
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