Maurice D. and Elinor Taylor - Page 7

                                        - 7 -7                                        

          his account, Irvington Federal would be left holding a number of            
          dishonored checks.4  Petitioner showed Mr. Ottey a spreadsheet that         
          detailed petitioner's check-kiting activity and told him that               
          Commercial & Farmers checks worth approximately $163,000 were going         
          to bounce.                                                                  
               Several days later, petitioner and Mrs. Taylor executed two            
          confessed judgment promissory notes totaling $170,000 (one in the           
          name of M&E, Inc., and one in petitioners' names, each dated July           
          21, 1988) to repay Irvington Federal for the bounced checks.  To            
          secure the repayment of these notes, petitioners executed mortgages         
          against their home and two business properties.  No evidence was            
          presented as to petitioners' equity in the properties upon which            
          the mortgages were given.                                                   
               Although Mr. Ottey considered the $170,000 to be partial               
          restitution for the losses incurred by Irvington Federal as a               
          result of petitioner's check-kiting scheme, petitioners' payments           
          pursuant to the notes were structured by Mr. Ottey as payments              
          pursuant to a line of credit.  The line of credit statement                 

               4    These checks were drawn on petitioner's Commercial &              
          Farmers account and deposited into his Irvington Federal account            
          in order to create a positive balance which petitioner used in              
          turn to draw checks on his Irvington Federal account.  Because              
          Commercial & Farmers froze petitioner's account, Irvington                  
          Federal could not present the Commercial & Farmers checks, which            
          were deposited into petitioner's Irvington Federal account, for             
          payment.  Thus, Irvington Federal was left holding worthless                
          Commercial & Farmers checks which Irvington Federal had already             
          cleared for payment.                                                        

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