- 40 -- 40 -
retain any portion of those funds during 1990.28
On the record before us, we also reject petitioners' conten-
tion that they held the deposits of K & H's and Ms. Velilla's
funds subject to an obligation that petitioner recognized to
return the funds so deposited to K & H. That record does not
establish that petitioner recognized an obligation to return
those funds to K & H. Nor does it show that petitioner recog-
nized an obligation to return Ms. Velilla's funds to Ms. Velilla.
It is significant that: (1) Petitioner did not disclose to Mr.
Kabeiseman the amounts of the K & H construction loan proceeds
that petitioner deposited into petitioners' account at Washington
Federal or the amounts of those proceeds that he did not return
to K & H; (2) the record does not show that petitioner disclosed
to Mr. Kabeiseman that he was depositing K & H checking account
or credit line funds into petitioners' accounts, the specific
amounts so deposited, or the specific amounts of such funds not
returned; (3) the record does not establish that petitioner
disclosed to Ms. Velilla that he was depositing Ms. Velilla's
construction loan proceeds and checking account funds into
petitioners' account at Washington Federal, the specific amounts
so deposited, or the specific amounts of such proceeds and funds
28 We find it hard to believe that petitioner would have been
authorized to deposit Ms. Velilla's checking account funds into
petitioners' accounts or to retain any portion of those funds for
petitioners' own use when he was not authorized to deposit Ms.
Velilla's construction loan proceeds into their accounts or to
retain any portion of those proceeds for their own use.
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