- 29 -
edgeable about interest rates and transferred his bank invest-
ments from deposits in checking and/or savings accounts to one or
more certificates of deposit whenever the applicable interest
rate on such a certificate would yield a greater return for
petitioners. Mr. Mifsud also admitted that he had never heard of
a bank in the United States that had failed and thereby caused
injury to its depositors.
Mr. Mifsud's own testimony belies his testimony that he
learned to distrust banks from his parents. Mr. Mifsud testified
that his mother "made" him open a savings account with Detroit
National Bank. It is implausible to us that his parents were
distrustful of banks and taught Mr. Mifsud to distrust them, and
yet Mr. Mifsud's mother "made" him open a savings account with a
Detroit bank.
Other facts established by the record further erode the
credibility of petitioners' claim that their cash hoard was the
source for the bank deposits at issue. For example, petitioners
had interest income of $23,947 or more for each of the years at
issue and received interest income in excess of $10,000 during
every year starting in 1986. Petitioners' interest income for
1987 and 1988 included tax-exempt interest. We believe that a
person like Mr. Mifsud, who was sophisticated enough to seek and
receive tax-exempt interest, buy certificates of deposit when
interest rates on such deposits yielded petitioners a greater
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011