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7. Petitioners’ Relationship to Mr. Taub
Moshe Melnik testified that Mr. Taub established and funded
the foreign trusts because he is a close friend of the Melniks.
Although Mr. Taub did not testify, we have no reason to doubt the
truthfulness of Mr. Melnik’s testimony regarding his friendship
with Mr. Taub. In response to the Court’s question, however, Mr.
Melnik also testified that Mr. Taub used $20,000 of his own money
to set up the foreign trusts simply because Mr. Melnik asked him
to do so and that Mr. Melnik did not offer or promise anything in
return for Mr. Taub’s generosity. After reviewing the trust
declarations, we have substantial doubt about the veracity of Mr.
Melnik’s testimony regarding the absence of a quid pro quo.
Each of the trust declarations contains a provision
designating Mr. Taub a beneficiary of the trust. Mr. Melnik did
not mention this provision at trial or explain why Mr. Taub was a
beneficiary of the Melniks’ foreign trusts. Absent an
explanation, the beneficiary designations in the trust
declarations cast doubt on Mr. Melnik’s testimony. Mr. Pennoni,
who drafted the trust declarations, obviously anticipated that a
distribution might be made to Mr. Taub at some point in the
future, or he would not have included Mr. Taub as one of the
trust beneficiaries. Mr. Taub did not testify regarding any
conversations that he may have had with the Melniks and Mr.
Pennoni, and the witnesses who did testify failed to explain the
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