Jean I. Tedford - Page 7

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          Mr. Tedford would repay her, so she decided to let him borrow the           
          money.                                                                      
               In 1994, Mr. Tedford began using his and petitioner’s                  
          personal funds to transfer sums to Border and pay some of                   
          Border’s business expenses.  Border used the sums transferred by            
          Mr. Tedford and petitioner to buy supplies and equipment and to             
          make loan payments to SunWest.                                              
               On January 12, 1994, Mr. Tedford transferred $90,000 to                
          Border out of the cash-surrender moneys available on two personal           
          insurance policies.  The transfer is evidenced by a letter from             
          U.S. Life Insurance Services Corporation (U.S. Life letter),                
          dated December 21, 1993.  Attached to the front page of the                 
          letter is a handwritten “Post-it” note that states, “Border owe             
          [sic] J.C. Tedford - to be paid over 6 mos. at 8% int.”  Stapled            
          to the letter are copies of two checks totaling $90,000, both               
          dated January 12, 1994, a blank page entitled “Demand Note,” and            
          copies of the backs and fronts of the same two checks with                  
          endorsements.  On the back of the correspondence is a stamp that            
          reads “Deposited to the Credit of ck#6004210-9002, Endorsement              
          Guaranteed, SunWest Bank of El Paso”, signed by the vice                    
          president of SunWest, and also signed by Mr. Tedford.  This                 
          transfer is also evidenced in Border journal entry no. JE0106,              
          posted on January 25, 1994, by Lucy Salas, Border’s bookkeeper at           
          the time, in the Corporate accounting records of Border.  The               





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