Wayne A. McFadden - Page 4




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          in Atascadero, California.  Atascadero is approximately 4 hours             
          south of Hercules.  Stephanie lived in Hercules while working as            
          an accountant for a construction company and would travel to                
          Atascadero on weekends to see David.                                        
               Stephanie and David had become interested in purchasing a              
          particular residential property in Atascadero, but neither had              
          the financial ability to do so.  They wanted to live in the                 
          house, refurbish it, and eventually resell it.  In addition to              
          his plumbing skills, David had experience framing houses.                   
          Stephanie and David felt that with David’s craft skills and                 
          experience they could make most of the desired improvements to              
          the house themselves.  Stephanie asked petitioner if he would               
          lend her and David the funds they needed to purchase and improve            
          the property.                                                               
               Petitioner, as the fiduciary of his profit-sharing plan, was           
          willing to lend funds from his plan to Stephanie and David.                 
          Petitioner viewed the loan as an appropriate investment for his             
          profit-sharing plan and was diligent in reviewing the feasibility           
          of Stephanie and David’s proposal.  Petitioner inquired about the           
          location and condition of the property, and the nature and extent           
          of the proposed improvements.  Petitioner consulted real estate             
          agents to confirm the adequacy of the security of a potential               
          loan.  He believed that Stephanie had real estate talent, and               
          that David’s craft skills provided an opportunity to enhance the            






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Last modified: May 25, 2011