River City Ranches #1 Ltd., Jeffry Bergamyer, Tax Matters Partner - Page 25

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               On November 24, 1998, the Government filed an indictment in            
          the U.S. District Court for the District of Oregon against Hoyt             
          and several other persons who had worked for or engaged in                  
          transactions with the Hoyt organization, including Barnes and his           
          wife, charging them with numerous counts of conspiracy and mail             
          fraud.  Shortly thereafter, respondent moved this Court to remove           
          Hoyt as TMP in many of the cattle and sheep partnership cases               
          pending before it.11  In orders issued from June 22, 2000,                  
          through May 15, 2001, this Court removed Hoyt as TMP in numerous            
          cattle and sheep partnership cases, pursuant to Rule 250(b).                
               On February 12, 2001, Hoyt was convicted of 1 count of                 
          conspiracy to commit fraud, 31 counts of mail fraud, 3 counts of            
          bankruptcy fraud, and 17 counts of money laundering.  See United            
          States v. Barnes, No. CR 98-529-JO-04 (D. Or. Feb. 12, 2001),               
          affd. sub nom. United States v. Hoyt, 47 Fed. Appx. 834 (9th Cir.           
          2002).  The U.S. District Court sentenced Hoyt to 235 months of             
          imprisonment and ordered him to pay restitution of over $102                
          million to the individual victims of his crimes.  This $102                 
          million figure represented the total amount that the Government             
          (using Hoyt organization records) determined was paid to the Hoyt           
          organization from 1982 through 1998 by investor-partners in the             

               11On June 2, 1999, the Government filed a superseding                  
          indictment against the same defendants, which, among other                  
          things, charged Hoyt with 54 counts of conspiracy to commit                 
          fraud, mail fraud, bankruptcy fraud, and money laundering.                  

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