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was employed by FSLIC as an asset manager. Through his brother,
petitioner became aware of the existence of the Forum 303 note. On
February 24, 1988, AMI submitted a bid of $690,000 for the Forum
303 note. On February 25, 1988, P. Noons prepared a memorandum to
his superiors at FSLIC in which he determined the value of the
Forum 303 note to be $683,356; consequently, he recommended that
AMI’s bid be accepted. P. Noons did not inform his supervisors
that his brother (petitioner) would be involved in the purchase of
the note. Nor did P. Noons indicate that he had overstated the
amount of the first lien on the underlying shopping center.
Accepting P. Noons’ recommendation, FSLIC approved the sale of the
Forum 303 note to AMI.
To finance the transaction, petitioner borrowed against his
personal assets approximately $600,000 from National Westminister
Bank in London, England. Petitioner deposited the proceeds of this
loan into a trust account in St. Peter’s Port, Guernsey (Unicorn
Trust).1
Unicorn Trust lent AMI $690,000. As collateral for the loan,
Mr. Rea pledged all of his stock in AMI to Unicorn Trust. The
$690,000 was not directly transferred from Unicorn Trust to AMI.
Rather, the $690,000 was first deposited in AMI’s bank account
1 Petitioner was both the grantor and a beneficiary of
the Unicorn Trust. He intended to make the individual who had
raised him and was his legal guardian one of the beneficiaries of
the trust.
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