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benefit of the employees, but for the immediate as opposed to the
retirement benefit of Morrissey. The Defined Benefit Plan was
used as a personal bank account by Morrissey for loans that were
made without regard to risk or prior repayment history. These
facts support respondent's disqualification of the Defined
Benefit Plan.
Also, and perhaps more important, our decision is based on a
determination that the entire investment philosophy of the
Defined Benefit Plan was aimed not at providing benefits for the
employees but at making capital available to Morrissey. The
manipulation of pension plan assets by a trustee who is also the
sole shareholder of the plan sponsor is a clear example of an
exclusive benefit rule violation. See Ada Orthopedic, Inc. v.
Commissioner, T.C. Memo. 1994-606.
In the instant case, we find the indifference toward the
continued well-being of the plan that we found in Winger's
Depart. Store, Inc. v. Commissioner, 82 T.C. 869 (1984), and Ada
Orthopedic, Inc. v. Commissioner, supra. Under the circumstances
of this case, we hold that, because petitioner's Defined Benefit
Plan did not operate for the exclusive benefit of employees for
the plan years ending October 31, 1990, and thereafter, it failed
to be qualified during those years under section 401(a) and hence
failed to satisfy the requirements of section 501(a) tax
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