secret from APECO's other personnel, dismissing all of APECO's
directors besides himself before authorizing the distribution.
Petitioners have suggested no reason for the dismissal of APECO's
other directors, and it seems that Mr. Kluener felt it necessary
to do this in order to preserve his "charade" as to the
availability of funds to APECO. That Mr. Kluener did not reveal
to APECO's personnel the existence of the funds held in APECO
Equine's name, even when the funds were not to be used for any
APECO project and the purported reason for secrecy had passed,
indicates that APECO's possession of the funds was kept secret
because the funds in reality were Mr. Kluener's.
Petitioners attempt to blunt the significance of the
distribution of the sales proceeds to Mr. Kluener by contending
that, at the time when title to the horses was transferred to
APECO, there was no intention to distribute the proceeds of their
sale to Mr. Kluener and that the subsequent distribution of the
proceeds was prompted by circumstances unforeseen at the time
that the transfer occurred; namely, the refusal in June 1990 of
Fifth Third to renew APECO's loans and the need to make principal
payments with respect to Mr. Kluener's personal debts to the
bank.
We, however, are not persuaded that the distribution of the
sales proceeds should be treated as unrelated to the other steps
of the transaction in issue or that those steps were "old and
cold" at the time the distribution was made. The circumstances
noted above strongly suggest to us that the distribution of the
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