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Pursuant to the plan, the trustee was required to provide the
plan with services which included (1) investing, managing, and
controlling plan assets, (2) maintaining records of plan receipts
and disbursements and preparing a written annual report,
(3) borrowing and raising funds for the plan, and (4) making
loans from the plan to plan participants. From the inception of
the plan through November 7, 2001, petitioner has had access to
the plan’s books, records, and assets.
As of March 28, 1990, neither Aspects nor petitioner had the
funds necessary to pay Aspects’s payroll liability of $40,000,
which was imminently coming due. Petitioner on that date
borrowed $40,000 from the plan (first loan) to pay that
liability. The first loan was supported by a promissory note
signed by petitioner and dated March 28, 1990. The note stated
that interest of 12 percent per annum would accrue on the unpaid
principal and that repayment would be made over 5 years through
quarterly installments of $2,688.63 beginning on June 28, 1990.
The note stated that the first loan was secured by petitioner’s
vested interest in the plan. The balance of that interest was
$112,000 on March 28, 1990, and $104,106.42 on April 1, 1994.
Inland Empire Properties, Inc. (Inland), was a licensed
California corporation from June 17, 1992, until March 1, 2000.
Its business during that time was the ownership and leasing to
Aspects and other tenants of a commercial building. Inland’s
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