         42)

     Bruce Frey was a certified property manager, real estate

broker, and the principal in D.M. Interstate Management, Inc.

(D.M. Interstate), a real estate property management company that

was an S corporation.49   By January 1980, Frey organized a

corporation, BJF Development, Inc. (BJF, Inc.), to engage in the

business of condominium conversions.   Exh. 5800; Frey, Transcr.

at 653-654.   As discussed in detail below, Frey, his business

associate, James Wold (Wold), and BJF, Inc. (as general

partners), organized a number of limited partnerships for the

purpose of carrying out condominium conversion projects, selling

the condominium units, and providing ongoing management services

for the condominium association.   Exh. 5800; Frey, Transcr. at

659-660, 663.

     On June 15, 1984,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,
                                -93-

Frey and Kanter discussed Frey’s pressing need to raise capital

for future condominium conversion projects.   At that time, a

condominium conversion craze was occurring in a number of major

metropolitan areas throughout the country, and Frey was faced

with having to