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Bermuda, but the financing mechanism is not explained in the
record.28 The Tapuz property was subsequently condemned,
however, when the new rail line was rerouted through it. At the
time of trial, Tapuz allegedly still owned the property, which
remained the subject of the condemnation proceeding.
Sometime during 1999, Moshe Melnik approached Bermuda Trust
about appointing Goldman Sachs as an investment adviser for any
U.S. investments. Moshe Melnik had set up a personal cash
management account at Goldman Sachs, and, when his adviser
discovered that the Melniks had sold HouTex, his adviser
suggested that Moshe Melnik invest the proceeds of the sale with
Goldman Sachs. Bermuda Trust informed Moshe Melnik that it could
not appoint Goldman Sachs because Bermuda Trust had its own
trading division, conducted its own deals, and did not let anyone
else invest money for which it was responsible. However, in
1997, Bermuda Trust had prepared three investment proposals
28Clend transferred approximately $1.38 million to
capitalize Tapuz. The funds were apparently advanced by the Bank
of Bermuda pursuant to a “credit facility” that is referenced but
not explained in the record. Clend’s transfer of funds resulted
in a deficit account balance in Clend’s company account of
approximately $888,500, as of May 3, 2000. By Dec. 31, 2000, the
deficit account balance in Clend’s company account had cost Clend
over $53,000 in overdraft charges and had increased to $1,284,523
as a result of the $900,000 in loans to the Melniks. Sometime
before Nov. 2, 2001, the Bank of Bermuda made a demand for Clend
to repay its “credit facility” by Nov. 2, 2001. When the
requested repayment did not occur, the Bank of Bermuda liquidated
investments in Clend’s investment account to cover the deficit.
The investments were liquidated over a period from November 2001
to January 2002.
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