Charles R. Harp and April B. Harp - Page 40

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                    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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