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Petitioner was elected president of FUH in 1983 and began
reporting to the board of trustees. As president of FUH,
petitioner became a member of each FUH committee, including the
pension committee. Petitioner was president or vice president, a
trustee, and a member of the executive committee of FUH from 1982
to 1988.
D. The FUH Retirement Plan
1. FUH Pension Plan
During the years at issue, FUH maintained a qualified
pension plan for its employees (the FUH plan). The FUH plan was
administered by the FUH pension committee, which consisted of
members of the board of trustees of FUH and the FUH
administration.
2. Use of Life Insurance To Fund the FUH Plan
In 1981, petitioner and Glenn Talbot (Talbot), then chief
financial officer of FUH and a member of its pension committee,
discussed an alternative program for funding the FUH plan. Under
the program, the plan would buy insurance policies on the lives
of FUH employees and the plan would be named the beneficiary.
David Player (Player) had been an insurance agent for
Connecticut Mutual Life Insurance Co. since 1976. Player first
heard of the concept of a pension plan buying life insurance on
its participants from petitioner.
Edgar Murray III (Murray) was a representative of Travelers.
From January to June 1982, Murray and the pension committee met
several times to discuss the program. Petitioner introduced
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