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Ripps never gave petitioner permission to use the $1.2
million, nor the certificate of deposit petitioner purchased with
Ripp’s $1.2 million, as collateral on his personal loans.
Ripps never received back from petitioner any portion of the
$1.2 million. As a result of the loss of the $1.2 million, Ripps
received $100,000 from the New York State Lawyers’ Fund for
Client Protection.
$350,000 Received From Banks
During December of 1990, petitioner obtained $350,000 by
writing checks on checking accounts at Chemical Bank and at
Citibank over which petitioner had control, but in which accounts
there existed insufficient funds to cover the checks petitioner
had written. No portion of this $350,000 obtained by petitioner
through this check-kiting scheme has been repaid to the banks.
During 1990, petitioner and his various controlled
corporations sought and obtained loans from Chemical Bank and
from Citibank for various real estate and other business
activities in which petitioner and his controlled corporations
were involved. In applying for the bank loans, petitioner
represented to personnel of the banks that he had a net worth of
at least $5 million.
$575,000 Received From Bridgehampton Estates
On August 31, 1990, New Gold Equities Corp. (New Gold), a
corporation controlled by petitioner, borrowed $4.5 million from
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