Harbor Bancorp & Subsidiaries - Page 12

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          rate the Bonds, the Bonds were to be "temporarily warehoused"--             
          that is, the Bonds were to be sold and held prior to their                  
          ultimate sale to the investing public.  Two days before closing,            
          a representative from Matthews & Wright informed Mr. Newman that            
          an entity known as the Commercial Bank of the Americas, Ltd.,               
          located on the island of Saipan in the Northern Marianas, would             
          purchase the Bonds from Matthews & Wright and hold them for                 
          temporary "warehousing".  Mr. Newman subsequently discovered that           
          the Commercial Bank of the Americas no longer had a banking                 
          charter and was operating simply as a corporation.                          
               On December 30, 1985, Mr. Newman instructed Richard B.                 
          Hemingway, an associate in the Stubbeman firm, to take the                  
          Whitewater, Ironwood, and 16 other bond certificates to New York.           
          Karen J. Cole, a representative of Interfirst Bank, was also in             
          New York on other business on December 31, 1985.  Although she              
          had little prior involvement in the Bonds' issuance, she was                
          asked to go to the offices of Matthews & Wright to attend the               
          closing.                                                                    
               Mr. Goldberg headed a federal credit union named New                   
          American Federal Credit Union, located in Jersey City, New Jersey           
          (the credit union).  On December 31, 1985, Mr. Goldberg                     
          instructed Joel S. Schwartz, the general manager of the credit              
          union, to come to Matthews & Wright and to bring "starter kit"              








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