Maurice D. and Elinor Taylor - Page 6

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          to purchase gold Krugerrand coins at a premium, then sold the coins         
          to a dealer at a discount of 5 to 8 percent.                                
               Petitioner was aware of the requirement that banks report              
          deposits of $10,000 or more and often made efforts to evade making          
          deposits in those amounts.                                                  
               To support his check-kiting scheme and to pay off debts,               
          petitioner borrowed funds.  He borrowed approximately $100,000 from         
          his father-in-law, of which Mrs. Taylor was unaware, and from               
          several other individuals.  Petitioner was unable to repay all of           
          his debts and often used funds borrowed from one person to pay what         
          he owed to others.                                                          
               In July 1988, after a Commercial & Farmers bank officer                
          notified petitioner that his account at that bank would be frozen,          
          and that his checks would no longer be honored, petitioner knew             
          that his check-kiting scheme was on the verge of collapse.                  
          Petitioner then, for the first time, informed Mrs. Taylor of his            
          check-kiting activities.  The Taylors went to Irvington Federal to          
          liquidate both the family checking account and Mrs. Taylor's                
          savings account.  Petitioner then went (without Mrs. Taylor) to the         
          Irvington Federal branch where the president of the bank, William           
          Ottey, maintained his office.  Petitioner informed Mr. Ottey of his         
          check-kiting activities and the action taken by Commercial &                
          Farmers with regard to petitioner's account.  Petitioner told Mr.           
          Ottey that as a result of Commercial & Farmers' decision to freeze          

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