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documentary evidence of a loan from Aeberhard. Petitioner
contends that he has no documentary evidence because his European
investors did not require more than a handshake for transactions
with him. Petitioner's claim is inconsistent with other evidence
in the record. Petitioner gave Aeberhard a promissory note for
the $200,000 loan in 1990 and secured it with a mortgage. This
casts doubt on petitioner's claim that Aeberhard would have
required nothing more than a handshake for a loan in 1989. We
find that Aeberhard did not lend $200,000 to petitioner in 1989.
2. Whether Petitioner's Investors Authorized Him To Use
Their Funds for Personal Purposes
Petitioner's investors made numerous deposits in his
accounts in 1989. Petitioner stated that he borrowed surplus
money from investors' funds to invest in a "good deal" on several
occasions when he was short of cash.
Petitioner contends that his foreign investors knew and did
not mind that he used some of their funds to invest for his own
purposes. He contends that he could use those funds for personal
investments, in part because he was not paid for his work and had
overhead costs. However, he concedes that he had no written
authority to do so. He contends that he repaid those funds as
soon as the project for which they were intended needed them.
We disagree. Markmann stated that petitioner could use
"small amounts" to pay for office expenses. We believe that
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