Edward A. Bougas III - Page 3

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          obligations.  Petitioner was free to pay the ordered obligations            
          from whatever sources he had available.  There is no mention of a           
          qualified domestic relations order (QDRO) in the divorce                    
          judgment, nor any reference to making Ms. Bougas an alternate               
          payee on petitioner’s IRA.                                                  
               In a June 27, 1997, divorce hearing held at the New Jersey             
          court, the Honorable Milton H. Gelzer, J.S.C., suggested that               
          petitioner withdraw pension funds to prevent foreclosure on the             
          marital home, even though such withdrawal may be subject to an              
          early withdrawal penalty.  There was no mention of a QDRO at the            
          divorce hearing.                                                            
               Sometime prior to the divorce, petitioner rolled over an               
          amount from his 401(k) retirement plan at Salomon, Smith Barney             
          into an IRA at Charles Schwab.  Because petitioner’s resources              
          were limited at the time he was required to pay the amounts                 
          ordered in the divorce judgment, he chose to take a distribution            
          from his IRA.  Petitioner requested a distribution from his IRA             
          in the amount of $250,000, without presenting the plan                      
          administrator with a copy of the divorce judgment.  Charles                 
          Schwab honored petitioner’s request and distributed a check to              
          petitioner in his name.  On March 20, 1998, petitioner deposited            
          the $250,000 check into his personal checking account at Republic           
          National Bank of New York (RNB).                                            
               On March 31, 1998, petitioner paid Ms. Bougas by personal              






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