resources were focused on promoting only one product. We are not
persuaded that, even with his health problems, Mr. Kluener did
not have control over how APECO's resources were to be used
without resorting to deception. We note that Mr. Kluener did not
appear concerned that he could not control the $1,500,000 that
Fifth Third loaned to APECO at approximately the time of the
transfer of the horses into the name of APECO. Furthermore, Mr.
Kluener appears generally to have dealt with concerns about
control by funding APECO with periodic loans rather than by
hiding funds.
The complete control exercised by Mr. Kluener over the
horses and the accounts containing the sales proceeds also
indicates to us that the proceeds of the horse sales were not
intended for use by APECO. APECO Equine's affairs were handled
at Mr. Kluener's business office by himself and his assistant,
and the financial and administrative affairs relating to the
horses were conducted in the same manner as they had been when
the horses were titled in Mr. Kluener's name. While his
assistant was nominally an APECO employee, Mr. Kluener continued
to reimburse APECO for the cost of her compensation after the
transfer, indicating that all of her services were performed for
his, rather than APECO's, benefit. Only Mr. Kluener and his
assistant had signature authority with respect to the checking
account in APECO Equine's name, and only Mr. Kluener could
authorize transactions with respect to the Legg Mason account in
its name.
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