He could not pay the principal and get the FRNs back for seven years.

FORBES: Sometimes You Should Just Pay The Tax

Optech agreed to loan him 90% of the value of the FRNs on a non-recourse basis.

FORBES: Sometimes You Should Just Pay The Tax

Initially, Sollberger paid the difference between the interest accruing under the loan and the interest from the FRNs.

FORBES: Sometimes You Should Just Pay The Tax

If the plan were to be actually followed through in detail, the interest earned on the FRNs would not simply wash the interest owed to Optech.

FORBES: Sometimes You Should Just Pay The Tax

Optech would apply the interest earned on the FRNs to the interest that Mr. Sollberger owed Optech and he would pay the difference, if he felt like it.

FORBES: Sometimes You Should Just Pay The Tax

The statements listed the FRNs as collateral (although they had already been sold) and showed the quarterly interest purportedly earned on the FRNs (which were shown as a credit against the loan interest).

FORBES: Sometimes You Should Just Pay The Tax

Optech was allowed to sell the FRNs.

FORBES: Sometimes You Should Just Pay The Tax

It seems pretty clear that Mr. Sollbeger was not planning on paying off the loan in seven years and getting his FRNs back, since it would have been disturbing to him that the statements stopped if he had.

FORBES: Sometimes You Should Just Pay The Tax