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Petitioners frequently observed advertisements encouraging
customers of various financial institutions to conduct their
banking by telephone. Petitioners assumed that they could
withdraw funds from petitioner's IRA's by requesting
telephonically that such accounts be converted into nonqualified
(non-IRA) accounts.
During the last week of July 1990, petitioner telephoned
First American Bank and requested that her First American IRA's
be converted into non-IRA accounts prior to August 15, 1990.
Petitioner explained to the First American Bank employee with
whom she spoke (the First American employee) why such a
conversion was necessary. The First American employee told
petitioner that she, the employee, would be glad to convert
petitioner's accounts and assured petitioner that petitioner's
request would be carried out. Based on the representations made
by the First American employee, petitioner concluded that all of
the steps necessary to withdraw her funds from the First American
IRA's had been completed.
Contrary to what petitioner had been told by the First
American employee, First American Bank required IRA owners to
execute various documents when transferring funds out of an IRA.
The First American employee, in assuring petitioner that
petitioner's IRA's would be converted to non-IRA accounts with no
further action on petitioner's part, misrepresented the bank's
internal procedure of converting an IRA into a non-IRA account.
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