Word: lerman
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Dates: during 1980-1989
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When Zaccaro sought a buyer for her interest in this building, he went to Lerman. They decided a fair market price was $325,000, nearly twice what Lerman and Ferraro had paid for the property five months earlier. (This value estimate was not unreasonable, it turned out, since the building was resold two years later for $375,000.) If they sold the building for $325,000 and paid off the $124,605 mortgage, Ferraro and Lerman would get roughly $200,000. Lerman agreed to pay Ferraro $100,000 in cash for her share. In purchasing her interest, Lerman took over...
Zaccaro promised Lerman he would buy back Ferraro's share for $100,000. Thus Lerman knew he would get back his cash payment of $100,000. In buying the half-share, Zaccaro would acquire half the mortgage obligation...
...back meant that Zaccaro was indirectly subsidizing his wife's campaign. In effect, she was selling her share of the property to him, with Lerman acting as an intermediary, and then using the proceeds to repay her husband and children. This would not be considered a gift and therefore a violation of election laws unless the value of the property was inflated, exceeding a fair market price at the time she sold her share...
...Ferraro campaign staff points out that Zaccaro could have simply bought his wife's property directly without going through Lerman, but "because of the recent FEC experience it did not occur to him." Again, for such a transaction to be legal it would have to be an arm's-length, market-value deal. In view of Ferraro's whopping profit after just five months, it is not entirely certain that the sale and repurchase met this standard...
...profit on the building sale. They listed the original purchase price as $90,311, which was accurate enough ($87,750 plus $2,561 in closing costs). But they said the building was sold for $96,500, for a capital gain of only $6,189. This ignored the fact that Lerman had assumed her $62,300 mortgage. Accountants from Arthur Young & Co., recently hired by Ferraro to review her finances, discovered the omission almost at once. It meant that Ferraro had to pay an additional tax of $29,709, plus $23,750 for ive years' interest. She wrote...