In re Raejean S. Bonham dba World Plus
Bankruptcy No. F95-00897
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REMEMBER THESE ARE PROPOSED FINDINGS - THEY HAVE NOT BEEN SIGNED

PLAINTIFF'S AMENDED PROPOSED
FINDINGS OF FACT AND CONCLUSIONS OF LAW

The plaintiff, LARRY D. COMPTON, Chapter 7 Trustee, pursuant to the court's order filed April 21, 1997, submits the following proposed Findings of Fact and Conclusions of Law.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

After trial before the court on March 26, 1997 and April 16, 1997, and the court having considered the evidence and the arguments of the parties, the court makes the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. The plaintiff, Larry D. Compton ("Compton" or "the trustee") is the duly authorized and acting Chapter 7 Trustee in the main case.

2. Defendant Raejean S. Bonham ("Raejean Bonham") was served with summons and complaint in this proceeding on October 24, 1996. This defendant is the debtor in the main case under an involuntary petition filed December 19, 1995. Three affiliates of Raejean Bonham under which she conducted business activities are World Plus ("WP"), World Plus, Inc. ("WPI") and Atlantic Pacific Funding Corporation ("APFC").

3. Defendant Steven A. Bonham ("Steve Bonham") was served with summons and complaint in this proceeding on October 24, 1996. Steve Bonham is the husband of the debtor, and they are referred to together as "the Bonhams."

4. The events at issue in this case all occurred at or near Fairbanks, Alaska.

5. The issues in this case involve questions of fact regarding:

(a) recovery of property of the estate, and specifically whether or not the trustee is entitled to recover certain monies from the Bonhams traceable to pre-petition assets;

(b) recovery of preferences, and specifically whether or not the trustee may recover certain preferential payments from Steve Bonham;

(c) recovery of fraudulent conveyances, and specifically whether or not certain transactions made by Raejean Bonham and Steve Bonham, directly or through WP, WPI and APFC, may be avoided by the plaintiff; and

(d) other proceedings involving liquidation of the estate, and specifically whether certain transfers by WP, WPI and APFC create claims for recovery of monies in Compton as to Steve Bonham and Raejean Bonham.

AMERICAN FUNDS ACCOUNT

6. The Bonhams kept and maintained an account at The American Funds Group, Account No. 6103-9143-40, as joint owners.

7. The monies on deposit in that account on the date of the bankruptcy petition are assets of the bankruptcy estate.

8. At or about the date of the bankruptcy petition, December 19, 1995, there were 112.998 shares with a share price of $15.470 on deposit in that account in the names of the account owners. Exhibit 001. The total value of that asset was $1,748.00.

9. The monies in the American Funds Group Account can be traced in substantial part to check number 4803 for $1,500.00 drawn on November 3, 1994 on the joint account of Steve Bonham and Raejean Bonham at Key Bank of Alaska account number 07-501914-0. Exhibit 002.

10. On or about April 1, 1996, the Bonhams caused the sum of $1,700.00 to be withdrawn from that account. Exhibit 004.

11. Steve Bonham and Raejean Bonham endorsed that check to the order of Yvette Curtis. Exhibit 004.

12. Compton made demand for the return of those monies. The Bonhams have failed without response, excuse or justification, to respond to that demand or to return those monies. Exhibit 005.

13. Raejean Bonham has claimed the monies in the American Funds account are exempt as retirement monies. There is no evidence to support that claim, and it is rejected.

14. Compton is entitled to recover the sum of $1,700.00, jointly and severally, from the defendants.

THE CORPORATIONS

15. Prior to April 1991, Raejean Bonham operated a proprietorship known as World Plus ("WP").

16. On or about April 22, 1991, Raejean Bonham caused the incorporation of World Plus, Inc. ("WPI") as an Alaska corporation. Certificate of Incorporation, Department of Commerce & Economic Development, Exhibit 006.

17. On or about March 22, 1993, Raejean Bonham acquired the shares of Atlantic Pacific Funding Corporation ("APFC") from a George Johnson. Bill of Sale, Exhibit 007.

18. There are no documents, and Raejean Bonham could not explain, why when the shares of APFC were apparently owned by a Charles Ferarra, the bill of sale to APFC was signed by a George Johnson.

19. There are no minutes or other records describing or reflecting the transfer of the assets of Raejean Bonham or WP to WPI.

20. There are no minutes or other records describing or reflecting the transfer of assets from Raejean Bonham, WP or WPI to APFC.

21. There are no minutes or other records describing annual meetings of the shareholders or directors of WPI or APFC, save for one set of annual minutes for APFC for 1994 . Exhibit 008.

22. Raejean Bonham was at all times the sole shareholder of WPI. At all times relevant, Raejean Bonham and Steve Bonham were the only officers of WPI. From at least January 6, 1993 forward, Steve Bonham and Raejean Bonham were the directors of WPI. Biennial Reports for WPI, Exhibits 009-010.

23. Raejean Bonham was at all times the sole shareholder, sole officer and sole director of APFC. List of Officers, Directors and Agent for APFC, Exhibits 011-012.

24. As is shown in Findings 86 to 169 below, Raejean Bonham treated the assets of WPI and APFC as her own personal assets, using them to meet the personal obligations of herself and Steve Bonham and using them to purchase personal goods and services consumed by Raejean Bonham, Steve Bonham and the Bonham children, Steven Shane Bonham ("Shane Bonham") and Stephanie Bonham.

25. As is shown in Findings 49 to 85 below, WP, WPI and APFC were operated by Raejean Bonham as a Ponzi scheme, and were insolvent from the at least 1990 forward. The liabilities of those businesses exceeded their assets from the outset.

26. There is no evidence of capitalization for either WPI or APFC; there is abundant evidence that both businesses had vast amounts of debt, but no credible evidence of assets or capital. The plaintiff has shown actual ticket sales for the period January 1991-December 1992 and January 1994-January 1995 to be as follows:

See Exhibit 013, pages 1-29, Exhibit 112, pages 1-2. This gross profit was all earned by WPI; there is no credible evidence of any ticket sales by APFC.

27. Raejean Bonham made no effort to preserve the separate identities of WPI and APFC.

(a) Raejean Bonham caused WPI investor contracts to be paid by APFC. Exhibit 014(a).

(b) Raejean Bonham issued investor maturity/rollover reminders captioned "World Plus, Inc. Atlantic Pacific Funding Corporation." Exhibit 014(b).

(c) Raejean Bonham caused checks to be endorsed with a stamp reading "For deposit only Atlantic Pacific Funding Corp., dba Atlantic Pacific Corp., World Plus, Inc." Exhibit 014(c).

28. Raejean Bonham made no effort to preserve the distinction between WPI and herself, issuing investor contracts in the name "World Plus, Inc. - Raejean S. Bonham." Exhibit 020, pages 3-49.

29. Raejean Bonham instructed investors to issue investment checks in blank, and that she would fill in the name of the account she would be putting the money into. Exhibit 015.

30. Raejean Bonham set up APFC so that, while nominally a Nevada corporation, it had no real presence there but instead hired Laughlin Associates, Inc. to maintain the fiction of a presence, under a written agreement. Exhibit 016. The debtor testified she was in Nevada and at the Carson City office one or two times a year, for one or two days each time. Dozens of checks were written by APFC every week, dozens of investor contracts for hundreds of thousands of dollars were issued by APFC each week, all from Fairbanks. Her own testimony damns her claim that APFC did business in Nevada.

31. Raejean Bonham told her investors that while both WPI and APFC were doing business in many states, in fact neither business had qualified as a foreign corporation in any other state in which it was doing business. Exhibit 017.

32. In response to requests from the Division of Securities, Department of Commerce & Economic Development, State of Alaska, and in support of her request for an exemption from the requirement of registration of securities, Raejean Bonham submitted completely false reports, grossly understating the number of investors, misrepresenting that all of the investors lived in Alaska, and grossly understating the total dollars those investors had invested. Examples of those reports are at Exhibits 018-020.

33. Any doubt that Raejean Bonham knew exactly what she was doing in submitting those false reports is resolved against her in the face of the investigation by and eventual consent decree in favor of the Idaho Securities Commission. Exhibit 021.

34. Permitting the Bonhams to assert the independent existence of either WPI or APFC in the circumstances of this case would defeat the public convenience, in that the right of the trustee to recover monies taken from investors and used to the benefit of the Bonhams would be seriously impaired.

35. Permitting the Bonhams to assert the independent existence of either WPI or APFC in the circumstances of this case would allow them to justify wrong, in that after evading requirements of corporate registration of WPI and APFC in the numerous states in which they conducted business, and after evading the requirements of registration of securities, and after deceiving investors into believing that the alleged investment plans of WPI and APFC did not violate the rights of Delta Air Lines, Raejean Bonham could escape the consequences of her actions.

36. Permitting the Bonhams to assert the independent existence of either WPI or APFC in the circumstances of this case would justify wrong, in that the Bonhams could assert the existence of WPI and APFC as a grounds for avoiding personal liability for the monies improperly taken by them from those businesses.

37. Permitting the Bonhams to assert the independent existence of either WPI or APFC in the circumstances of this case would allow them to commit fraud, in that the Bonhams might escape personal liability for the frauds committed on investors and the frauds committed on Delta Air Lines (see Finding Nos. 49-68), by sheltering themselves behind the corporate veil.

38. Without in any way determining that the Bonhams or Raejean Bonham in particular have committed a crime, permitting the Bonhams to assert the independent existence of either WPI or APFC in the circumstances of this case would allow the Bonhams to defend crime, by asserting that any crimes were committed by WPI and APFC and not by the Bonhams.

39. Raejean Bonham at all times relevant owned all of the stock of WPI and APFC. See Biennial Reports and Lists, Exhibits 009-012

40. Raejean Bonham caused the incorporation of WPI and acquired APFC from Charles Ferrara or George Johnson as an empty or "shell" corporation.

41. WPI and APFC at all times had grossly inadequate capitalization. See Findings 70-85.

42. Raejean Bonham used and treated the property of WPI and APFC as her own. See Findings 86-163.

43. Neither Steve Bonham or Raejean Bonham, as directors of WPI, nor Raejean Bonham, as sole director of APFC, acted independently in the discharge of their duties, but instead operated WPI and APFC in their own interests.

44. The formal requirements for a corporation were rarely observed in the case of either WPI or APFC. There were no corporate books, no financial statements, no ledgers and no records kept according to generally accepted accounting procedures.

45. Raejean Bonham used and seeks now to use the corporate form of WPI and APFC to defeat public convenience, justify wrong, commit fraud and defend crime.

46. Raejean Bonham and Steve Bonham seek to have the court determine that, as between the trustee and themselves, WPI and APFC are valid corporations and that the trustee may not ignore the corporate form. The court finds:

(a) Raejean Bonham and Steve Bonham have themselves disregarded and ignored the corporate forms of WPI and APFC when it has suited their purposes, by expending corporate funds for personal purposes, as described in Findings 86-163 below.

(b) If the court permitted Raejean Bonham and Steve Bonham to now assert an inconsistent position - that the court should observe and give legal effect to the corporate form in this case - would be to permit them to take a position inconsistent with their pre-petition conduct, which consisted of wholly ignoring the existence of WPI and APFC when it suited their purposes.

(c) Given the amount of monies taken by Raejean Bonham and Steve Bonham from WPI and APFC, as detailed in Findings 86-163, and given the fraudulent character of all of the activities of WPI and APFC, as detailed in Findings 49-85, the inconsistency is significant.

(d) As evidenced by her misrepresentations to the State of Alaska Division of Securities and the Idaho Securities Commission, and her intentional failure to register WPI and APFC as foreign corporations, and her knowing violations of Delta Air Lines' rights under its frequent flier contracts, Raejean Bonham's disbursements of monies to herself and her family were made with full knowledge that she was using the corporation to commit fraud and for her personal benefit.

47. It would be unconscionable for the court to permit Raejean Bonham and Steve Bonham to assert the existence and validity of WPI and APFC when they have themselves disregarded the separate legal existence of WPI and APFC when it has suited their purposes.

48. Raejean Bonham and Steve Bonham are barred by the law of quasi-estoppel from asserting the validity of WPI or APFC as corporations in this action.

THE BUSINESS OF THE CORPORATIONS

49. WP and WPI were engaged in two business activities.

50. WP and WPI both sold airline tickets issued under Delta Air Lines Frequent Flier Program ("FFP") and the FFPs of other airlines. Raejean Bonham has testified in earlier proceedings that APFC dealt in large volumes of FFP miles and FFP tickets, but there is no evidence to support that testimony.

51. At least in the case of Delta Air Lines, a court of competent jurisdiction has found that the sales of FFP tickets were made in violation of the rules and restrictions imposed by Delta Air Lines. Exhibits 022-024.

52. Raejean Bonham has testified that WPI and APFC dealt in FFP ticket sales in such quantities that WP, WPI and APFC could pay their investors rates of return ranging from 50% in two to eight months down to 20% in six to eight months. In the weeks immediately prior to the involuntary petition, Raejean Bonham was offering very short term contracts - measured in a period of weeks - with a promised 50% return.

53. Raejean Bonham has shown to the trustee a lengthy, multi-column set of accountants' sheets in support of her claim as to very large volumes of sales of tickets. Representative pages are at Exhibit 025. While the pages purport to be for periods some three years apart, the lists of names are in fact identical.

54. Those reports do not withstand scrutiny. There is testimony that they were drawn for the specific purpose of perpetrating a fraud on the trustee and on the court. Deposition testimony of Melanie Cook, Testimony of Larry D. Compton.

55. Those reports internally contradict known facts: persons shown as traveling using Delta Airline FFP tickets for the 4th Quarter of 1995 were in fact deceased before that time.

56. There is no record anywhere in the financial records of the Bonhams, WP, WPI, or APFC showing either purchase of those large blocks of FFP miles or sales of FFP tickets from those miles.

57. Raejean Bonham has offered other evidence suggesting that there was a large volume of sales of FFP mileage or FFP coupons. That evidence also appears to be fraudulent. For example, purported contact purchase of miles from "Apple Corporation" was "paid" by a check issued to "Terry Franklin," Raejean Bonham's brother. Exhibits 026-027. Bonham testified that it was a coincidence that her brother and the putative employee of "Apple Corporation" had the same name, including middle initial. The court does not find her testimony credible, particularly since the check was deposited to First National Bank of Anchorage. Exhibit 027.

58. As another example, a check drawn to "Patriot Management Corporation" has a memorandum stating it was for the purchase of travel miles. Exhibits 028-029. But a microfilm copy of the check, from the bank processing the instrument, does not show any such memorandum. Exhibit 030. The court concludes that the memorandum was added after the check had been negotiated by the bank.

59. Even if court attached any credibility to "Apple Corporation and "Patriot Management Corporation" mileage contracts, the prices allegedly paid by APFC for those miles result in a loss to WPI or APFC in the sale of tickets generated with those alleged miles.

60. The "Apple Corporation" contract describes 2,500,000 miles for $60,000, or $0.0240 cents per mile. Exhibits 026 and 027. A Delta coach class ticket required 25,000 to 20,000 miles. Exhibit 108, pages 2-3. The cost of a ticket from "Apple Corporation" miles would then be $600-$720. WP and WPI sold coach class tickets for $550, a loss of $50-$170 per ticket sold.

61. The "Patriot Management Corporation" contract describes 3,000,000 miles for $75,000, or $0.0250 cents per mile. Exhibits 028-030, 108. The cost of a ticket from "Patriot Management Corporation" miles would then be $625-$750, which when sold at WP's and WPI's price of $550 per ticket would result in a loss of $75-$200 per ticket sold.

62. It is probable that the "Apple Corporation" and "Patriot Management Corporation" were used to launder money. Even if the court believed that the two contracts were authentic, and the court does not, they still operate as proof that the alleged mileage purchase business did not make economic sense.

63. The court invited Bonham to describe the largest mileage purchase she had made. She stated she paid $450,000 to $500,000 for a single block of miles. The court asked her to described how many miles she obtained for that price. After a moment with pen and paper, she stated she had obtained 5,000,000 miles for that price. Using the lower purchase price, based upon her testimony she would have paid nine cents per mile, for a FFP ticket cost of $2,250 at 25,000 miles for a coach class ticket, which WP and WPI would then sell for $550.

64. As another example, Raejean Bonham caused WPI to issue check number 4896 to Stephanie Bonham on May 15, 1992 for $7,500. Exhibit 031-032. The file copy of the check bears the memorandum "Alaska Plus Mileage Purchase." The microfiche copy of the check obtained from Key Bank, while not a clean copy, plainly does not bear that memorandum. The court concludes that the memorandum was added after the check had been negotiated by the bank.

65. The court concludes that while Raejean Bonham attempted to create evidence of purchases and sales of large volumes of FFP mileage and coupons, in fact those records are false and were created to perpetrate a fraud on the trustee and this court..

66. Even if those records are authentic, and the mileage purchases described in them occurred, the sales would have resulted in losses to Bonham's businesses, let alone the kinds of profits that would have been required to address the debt service those businesses incurred.

67. The court finds that neither WPI nor APFC engaged in any large volume sales of FFP mileage and coupons. In fact, the actual frequent flier sales are more likely than not those shown in Finding 26. While Raejean Bonham has asserted those tickets were "quick sales," in fact the plaintiff has testified those sales track to the tickets picked up by WPI customers and actual reservation cards, where he has had an opportunity to compare them.

68. Raejean Bonham has failed to provide any credible evidence of trafficking in FFP miles or FFP coupons in amounts remotely sufficient to satisfy the debt service described in the proofs of claim that have been filed in this case.

69. The trustee has attempted to reconstruct the financial records of the Bonham, WP, WPI and APFC from the checks, bank statements, deposit slips and microfiche/microfilm copies of deposit items across all of the known bank accounts of Bonham, WP, WPI and APFC for the period 1990-1995.

70. The trustee described the process by which those financial records were entered into a Quicken™ database. The database was constructed on a cash basis.

71. The trustee admitted that the entry and analysis was ongoing and incomplete in some areas, in that income items for 1991 were out of balance, deposit detail analysis was incomplete for 1995, and some category labels were inconsistent.

72. The trustee testified that he believed the accounting records were sufficiently detailed and complete to support analysis of the financial condition of the Bonhams, WP, WPI and APFC for the periods 1990 through 1995. Based upon his testimony, I find that the accounting summaries are sufficiently reliable, even in their present states, to support conclusions regarding the financial condition of the Bonhams, WP, WPI and APFC.

73. The trustee described the process by which he prepared a preliminary consolidated income statement for those six years, Exhibit 115. That income statement, which excluded all investor income and investment expense, except cash, shows that Bonham, WP, WPI and APFC operated at a significant loss for each of those calendar years, ranging from more than $171,000 in 1992 to more than $266,000 in 1995. (Because 1991 income was out of balance at the time the report was generated the $1.1 million loss for that year should be disregarded.)

74. The court concludes that by the best evidence available at the time of trial, the ticket sales component of the business activities of Bonham, WP, WPI and APFC operated at a significant loss in each year from 1990 to 1995, without regard to the investment contract obligations. Exhibit 115.

75. The trustee has and continues to enter the investment contracts generated by Bonham, WP, WPI and APFC into a separate database. The entry of investment contracts is incomplete and ongoing.

76. Based upon entries to date, Bonham, WP, WPI and APFC had investment contracts falling due in each year as follows:

See Exhibits 110 and 111.

77. The column headed "Total Ticket Sales @ $550/Ticket" represents the estimated tickets required to be sold at $550 each in order to meet investment contracts coming due, without regard to overhead or cost of goods sold with regard to those tickets.

78. Sales of 96,276 tickets in 1995, assuming 270 business days a year, would require average daily ticket sales of 44 ticket sales per hour. In a two or three employee office, given the steps required to process a FFP ticket, that is an impossibility.

79. Sales volumes at that level imply that the trustee, when he took possession of the business, should have found hundreds of tickets waiting for pickup by WPI customers. There were only 8 tickets.

80. Even on unrealistic assumptions that are extremely favorable to the debtor, it appears to be a practical impossibility for ticket sales to have supported debt service as described in Finding 76.

81. Based upon the investment contracts falling due in each year, Bonham, WP, WPI and APFC was insolvent in each year 1990 through 1995.

82. The court, in the context of the motion to convert this case from Chapter 11 to Chapter 7, has already concluded that WP, WPI and APFC were probably a Ponzi scheme.

83. The court concludes that, for the purposes of cases between the trustee and the Bonhams, and by a preponderance of the evidence, the Bonhams, WP, WPI and APFC were engaged in two business activities: (a) ticket sales in violation of FFP rules which operated at a loss and (b) a Ponzi scheme, by which the investment proceeds from new investors were used to subsidize the FFP tickets sales operations and to pay the obligations to earlier investors.

84. Even if the court were to conclude that the second business of Raejean Bonham was not a Ponzi scheme, the fact remains that the first business activity, and the putative source of payment for investors, involved an activity which has already been determined to constitute fraud against Delta Air Lines.

85. Given (a) the magnitude of the investment contracts falling due from 1991 through 1995, (b) the rates of returns on those investment contracts, and (c) the losses incurred in tickets sales between 1990 and 1995, the only revenue-generating portion of the business of Bonham, WP, WPI and APFC, the court concludes that at all times between 1990 and 1995, the liabilities of Bonham, WP, WPI and APFC exceeded the assets of those entities.

PAYMENT OF HOUSEHOLD EXPENSES

86. Under the terms of the Lease with Option to Purchase between the Bonhams and Allen Dale Cartwright for the real property at 1992 Steese Highway, the Bonhams are required to pay as rent the debt service owed by Allen Dale Cartwright on the underlying note and deed of trust. Lease with Option to Purchase, Exhibit 033.

87. The amount of the rent paid under the Lease with Option to Purchase varied with the amount of the note payment.

88. Raejean Bonham routinely paid the rent with WP and WPI funds, as summarized in the following table:

The individual exhibits, consisting of checks and payment stubs are Exhibits 034-036.

89. Not less than one-half of these payments were made for the benefit of Steve Bonham, representing his share of the rent.

90. The payments were made by WP and WPI at a time when the business was insolvent.

91. The plaintiff is entitled to recover the sum of $12,325 from Steve Bonham.

92. Raejean Bonham routinely caused WPI to pay for electric utility service to the premises described in the Lease with Option to Purchase, Exhibit 033.

93. The plaintiff has shown the following payments were made with WP and WPI funds:

The individual exhibits, consisting of canceled checks, are Exhibit 037.

94. Not less than one-half of these payments were made for the benefit of Steve Bonham, representing his share of the electric utility expense.

95. The payments were made by WP and WPI at a time when the business was insolvent.

96. The plaintiff is entitled to recover the sum of $4,153.03 from Steve Bonham.

97. Raejean Bonham routinely caused WP and WPI to pay for heating oil to the premises described in the Lease with Option to Purchase, Exhibit 033.

98. The plaintiff has shown the following payments were made with WP and WPI funds:

The individual exhibits, consisting of canceled checks, are Exhibit 038-039.

99. Not less than one-half of these payments were made for the benefit of Steve Bonham, representing his share of the heating oil expense.

100. The payments were made by WP and WPI at a time when the business was insolvent.

101. The plaintiff is entitled to recover the sum of $3,286.83 from Steve Bonham.

102. On or about March 18, 1988, Steve Bonham and Raejean Bonham purchased a 1988 Chevrolet Pickup, VIN 1GCDK14K7JZ193614, Alaska License No. 6077CG. A copy of the Retail Installment Purchase Contract is Exhibit 040. The Contract calls for monthly installment payments of $366.53. The vehicle is titled to Steve Bonham and Raejean Bonham. A copy of the Alaska Certificate of Title is Exhibit 041.

103. Raejean Bonham caused WP and WPI to make payments on the Retail Installment Purchase Contract for the 1988 Chevrolet Pickup, as follows:

See Exhibit 042.

104. Not less than one-half of these payments were made for the benefit of Steve Bonham, representing his share of the installment payments for the vehicle.

105. The payments were made by WP and WPI at a time when the business was insolvent.

106. The plaintiff is entitled to recover the sum of $3,824.25 from Steve Bonham.

107. On or about March 16, 1990, Steve Bonham and Raejean Bonham purchased a 1990 Chevrolet Blazer, VIN 1GNEV18KOLF134888, Alaska License No. CGD458, titled to Steve Bonham and Raejean Bonham. A copy of the Alaska Certificate of Title is Exhibit 043.

108. Where noted in Finding 103, Raejean Bonham also caused installment payments on the Blazer to be made by WP and WPI.

109. Total payments on the Blazer shown to have been made by WP and WPI are $3,956.10.

110. The plaintiff is entitled to recover one-half of that sum or $1,978.05 from Steve Bonham.

LIFE INSURANCE ON STEVE BONHAM

111. Raejean Bonham caused WPI to pay the premiums for life insurance policies on the life of Steve Bonham.

112. The policies on the life of Steve Bonham appear to have included:

See Exhibits 044-047.

113. As to each of these life insurance policies, Steve Bonham was the owner of the policy and the named insured under the policy.

114. As to each of these life insurance policies, Raejean Bonham was the primary beneficiary.

115. Raejean Bonham caused WPI to pay the life insurance premiums on these policies of insurance on the life of Steve Bonham as follows:

Life Insurance Policy	Check Date	Amount	Account	Check No.
Old Line Life Insurance - Steve Bonham, Insured - Application for $300,000 coverage	04/22/94	1,370	WPI/KBA	6338
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	06/29/95	1,250	WPI/KBA	7561
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	04/17/95	1,250	WPI/KBA	7450
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	01/06/95	1,250	WPI/KBA	7295
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	09/29/94	1,250	WPI/KBA	7119
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	06/29/94	1,250	WPI/KBA	6770
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	03/22/94	1,250	WPI/KBA	6279
Lincoln Benefit - Steve Bonham, Insured - Policy No. U0185893 - $500,000 - Issued 4/8/93	12/28/93	1,250	WPI/KBA	6144
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	10/17/90	898	WP/KBA	2843
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	07/14/90	898	WP/KBA	2614
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	04/17/90	898	WP/KBA	2377
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	01/16/90	898	WP/KBA	2170
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	10/18/91	898	WP/KBA	4145
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	07/18/91	898	WP/KBA	3823
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	04/22/91	898	WP/KBA	3402
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	01/22/91	898	WP/KBA	3118
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	07/15/92	898	WPI/KBA	5076
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	10/21/94	898	WPI/KBA	7164
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	07/25/94	898	WPI/KBA	6829
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	04/22/94	898	WPI/KBA	6351
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	01/11/94	898	WPI/KBA	6161
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	08/11/95	898	WP/DSB	10009
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	05/22/95	898	WPI/KBA	7487
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	01/31/95	898	WPI/KBA	7336
Old Line Life Insurance - Letter confirming cancellation and transmitting partial refund	08/25/94	-1,233	N/A	N/A
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	01/17/92	898	WPI/KBA	4500
Northwestern National Life Insurance - Steve Bonham, Insured - Policy No. 2-181-587 - $200,000 - issued 7/24/89	04/10/92	898	WPI/KBA	4775

The individual exhibits, consisting of canceled checks, are Exhibit 048.

116. All of these payments were made by WPI for the benefit of Steve Bonham at a time when WPI was insolvent.

117. None of these payments represent premiums for life insurance on the life of Raejean Bonham under which Steve Bonham was named as beneficiary.

118. The payments were made by WP and WPI at a time when the business was insolvent.

119. The plaintiff is entitled to recover the sum of $21,889 from Steve Bonham.

HEALTH INSURANCE ON BONHAM FAMILY

120. Raejean Bonham caused WP and WPI to routinely pay the health insurance coverage expenses of Raejean Bonham, Steve Bonham and the Bonham children.

121. The plaintiff has shown that the following sums were disbursed out of WP and WPI for health insurance coverage, either as COBRA coverage or as direct premiums to insurers:

The individual exhibits, consisting of canceled checks, are Exhibit 049-050.

122. All of these payments were made by WP and WPI for the benefit of Steve Bonham.

123. None of these payments represent premiums for life insurance on the life of Raejean Bonham under which Steve Bonham was named as beneficiary.

124. The payments were made by WP and WPI at a time when the business was insolvent.

125. The plaintiff is entitled to recover the one half of the sum of expended for health insurance coverage or $3,683.25 from Steve Bonham.

PAYMENTS FOR BONHAM VEHICLE INSURANCE

126. Raejean Bonham caused WP and WPI to routinely pay for motor vehicle liability insurance for vehicles owned by the Bonhams and the Bonham children personally.

127. Examples of such policies include:

See Exhibits 051-055.

128. The number of policies and the number of vehicles insured under those policies appears to have varied from time to time. However, the plaintiff has shown that all of the vehicles described in these policies were titled to Steve Bonham, at least in part. Most were titled to Steve Bonham and Raejean Bonham; some were titled to Steve Bonham individually and some to Steve Bonham and one of the Bonham children.

129. Raejean Bonham caused WP and WPI to routinely pay the premiums for these auto insurance policies. Those payments included:

Description	Date	Amount	Account	Check No
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	12/31/90	360.08	WP/KBA	3059
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	12/31/95	346.70	WPI/KBA	4395
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	02/10/92	346.70	WPI/KBA	4517
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	04/17/92	171.00	WPI/KBA	4796
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	04/03/92	1,003.60	WPI/KBA	4730
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	06/01/90	362.32	WP/KBA	2475
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	06/29/90	362.33	WP/KBA	2585
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	07/14/90	108.50	WP/KBA	2613
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	11/19/90	754.27	WP/KBA	2929
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles, including 94 Chev, 88 Chev, 90 Blazer, 84 Jeep)	11/08/94	2,329.40	WPI/KBA	7206
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Motorcycles)	11/08/94	171.10	WPI/KBA	7207
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	01/04/90	341.15	WP/KBA	2144
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	06/26/91	542.45	WP/KBA	3764
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	11/18/91	271.80	WP/KBA	4251
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	10/28/91	271.80	WP/KBA	4180
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	09/04/91	122.35	WP/KBA	3972
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	04/30/91	424.95	WP/KBA	3428
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	01/29/91	448.87	WP/KBA	3143
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	06/03/91	462.35	WP/KBA	3536
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	10/07/92	1,222.80	WPI/KBA	5970
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	04/03/92	1,227.90	WPI/KBA	4731
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	02/10/92	271.80	WPI/KBA	4516
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	12/31/91	271.80	WPI/KBA	4394
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	08/24/90	362.32	WP/KBA	2700
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	04/25/90	362.33	WP/KBA	2412
Allstate Insurance Policy 0 76 724419 04/09 422 031910 (Various vehicles)	02/23/90	237.70	WP/KBA	2275
TOTAL		13,158.37

The individual exhibits, consisting of canceled checks are Exhibit 056.

130. All of these payments were made by WP and WPI for the benefit of Steve Bonham.

131. The payments were made by WP and WPI at a time when the business was insolvent.

132. The plaintiff is entitled to recover the one half of that total or the sum of $6,579.19 from Steve Bonham.

PAYMENTS FOR BENEFIT OF BONHAM CHILDREN

133. Raejean Bonham caused WP and WPI to routinely pay the personal obligations of herself and Steve Bonham, and the expenses of their children, Stephen Shane Bonham and Stephanie Bonham.

134. The plaintiff has shown the following expenses to have been paid by WPI for the benefit of Steve Bonham as support, living, personal and educational expenses of the Bonhams' daughter, Stephanie Bonham.

The individual exhibits, consisting of canceled checks, credit card statements and charge slips, are Exhibits 057-066.

135. All of these payments were made by WP and WPI for the benefit of Steve Bonham.

136. The payments were made by WP and WPI at a time when the business was insolvent.

137. The plaintiff is entitled to recover the one half of that total or the sum of $5,265.93 from Steve Bonham.

138. The plaintiff has shown the following expenses to have been paid by WP and WPI as support, living, personal and educational expenses of the Bonhams' son, Steven Shane Bonham, for the benefit of Steve Bonham:

The individual exhibits, consisting of canceled checks, credit card statements and charge slips, are Exhibits 057-062, 067-072.

139. In addition to the credit card payments, Raejean Bonham caused WPI to issue a check for $2,000 to Shane Bonham on or about December 24, 1991. Exhibit 073. The total expenses for Shane Bonham are $10,766.12.

140. All of these payments were made by WPI for the benefit of Steve Bonham for the support of his son, Shane Bonham.

141. The payments were made by WP and WPI at a time when the business was insolvent.

142. The plaintiff is entitled to recover the one half of that total or the sum of $5,383.06 from Steve Bonham.

143. On November 23, 1990, Steve Bonham purchased a 1984 Jeep CJ7, Serial No. IJCUM87E8E7128268, for his son, Shane Bonham, titled to Steve Bonham and Shane Bonham, for a purchase price of $3,800. Exhibit 074. The purchase price for the 1984 Jeep CJ7 was paid in full by WPI, Check No. 2943. Exhibit 075.

144. The plaintiff is entitled to recover one half of that sum or $1,900.00 from Steve Bonham.

145. On July 6, 1991, Steve Bonham purchased a new 1991 Jeep Wrangler, Serial No. 2J4FY39S9MJ102149, for Shane Bonham, titled to Steve Bonham and Shane Bonham, for a purchase price of $16,688.00. Exhibit 076. All but $500 of the purchase price was paid by WPI with check number 3787, signed by Steve Bonham. Exhibit 077. The $500 was paid by a rebate.

146. The plaintiff is entitled to recover one half of that sum or $8,094.00 from Steve Bonham.

147. On March 26, 1997, Raejean testified that Shane Bonham had reimbursed WPI for the disbursements made to him by WPI in the amount of $10,000, and promised to provide the court a copy of the check. She did not do so.

148. On November 3, 1992, Steve Bonham purchased a 1990 Eagle Talon, Serial No. JM2UF4142KO808583, for Stephanie Bonham, titled to Steve Bonham and Stephanie Bonham, for a purchase price of $13,885. Exhibit 078. Some $4,375 of the purchase price was paid by trade-in of a 1989 Mazda pick up; the balance of the purchase price was paid by WPI check #4600 for $9,500. Exhibit 079.

149. The plaintiff is entitled to recover one half of that sum or $4,750.00 from Steve Bonham.

150. On May 4, 1994, Steve Bonham and Stephanie Bonham purchased a new 1994 Chevrolet pickup, Serial No. 1CCEK14K3RZ170248, for Stephanie Bonham, titled to Steve Bonham and Stephanie Bonham, from Applegate Chevrolet. Exhibit 080. The total purchase price was $24,545. The purchase price was paid in part by trade-in of the 1990 Eagle Talon described above for $11,533. Exhibit 081. The balance of the purchase price was paid by check #4615 drawn on Steve Bonham's and Raejean Bonham's personal account, Key Bank Account #075-01-914-0, for the sum of $13,012.95. Exhibit 082.

151. The monthly statement for Steve Bonham's and Raejean Bonham's personal account, Key Bank Account #075-01-914-0, for the period ending May 9, 1994, the period in which check #4615 was issued, demonstrates that check #4615 would not have been paid by Key Bank except that four large deposits were made for the period April 26, 1994-May 4, 1994:

Exhibit 083.

152. No plausible source for these large deposits has been offered by Steve Bonham or Raejean Bonham. Given the pattern of commingling of funds shown above and found in earlier proceedings in this court, it is a reasonable inference that the monies were investor monies diverted from WPI to Steve Bonham's and Raejean Bonham's personal account.

153. Check #4615 was in the total amount of $13,012.95. Exhibit 082. The plaintiff is entitled to recover one half of the amount of check #4615, the sum of $6,506.48, from Steve Bonham.

DISBURSEMENTS FOR THE BENEFIT OF STEVE BONHAM

154. Raejean Bonham caused WPI and APFC to regularly pay the personal credit card expenses of Raejean Bonham and Steve Bonham.

155. The trustee has shown the following credit card statements involving joint expenses of Steve Bonham and Raejean Bonham, and expenses solely of Steve Bonham, were paid with WPI or APFC monies:

Description	Check Date	Check Amount	Account	Check No.
American Express Account 3728-469748-51004 in name of Steven A. Bonham, statement dated 8/2694	09/08/94	543.93	WPI/KBA	7063
American Express Account 3728-469748-51004 in name of Steven A. Bonham, statement dated 7/27/94	08/16/94	1,827.78	WPI/KBA	7014
American Express Account 3728-469748-51004 in name of Steven A. Bonham, statement dated 3/27/94	04/22/94	1,305.95	WPI/KBA	6344
American Express Account 3728-469748-51004 in name of Steven A. Bonham, statement dated 2/25/94	03/07/94	559.38	WPI/KBA	6246
American Express Account 3728-469748-51004 in name of Steven A. Bonham, statement dated 1/26/94	02/08/94	1,033.20	WPI/KBA	6204
American Express Account 3728-469748-51004 in name of Steven A. Bonham, statement dated 12/27/93	01/11/94	716.42	WPI/KBA	6164
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 12/31/94	01/31/94	2,934.50	WPI/KBA	7335
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 11/7/94 (Steve Bonham items only)	11/22/94	2,179.58	WPI/KBA	7229
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 10/6/94	10/26/94	1,618.28	WPI/KBA	7169
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 9/6/94	09/29/94	2,385.23	WPI/KBA	7120
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 7/6/94	07/25/94	2,254.15	WPI/KBA	6831
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 6/6/94	06/29/94	2,962.26	WPI/KBA	6777
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 4/6/94	04/22/94	2,670.69	WPI/KBA	6343
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 3/7/94	03/22/94	658.65	WPI/KBA	6281
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 2/7/94	02/22/94	1,209.17	WPI/KBA	6232
First Consumers National Bank Account 5421-1620-0173-3763 in name of Steven A. Bonham and Raejean S. Bonham, statement dated 1/6/94	01/19/94	943.57	WPI/KBA	6182
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statements dated 04/20/95 and 05/20/95	05/30/95	1,120.09	WPI/KBA	7509
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 03/21/95	04/17/95	6,265.12	WPI/KBA	7448
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 11/19/94	12/08/94	5,050.00	WPI/KBA	7256
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 10/24/94 (Steve Bonham portions only)	11/08/94	227.75	WPI/KBA	7205
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 07/21/94 (Steve Bonham portions only)	08/16/94	717.45	WPI/KBA	7016
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 03/21/94(Steve Bonham portions only)	03/29/94	241.67	WPI/KBA	6296
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 12/19/93 (Steve Bonham portions only)	01/11/94	5,500.00	WPI/KBA	6163
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 10/20/94	11/08/94	795.93	S&S/KBA	4810
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 08/20/94 (Steve Bonham only)	09/29/94	853.00	S&S/KBA	4775
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 06/20/94 (Steve Bonham only)	07/12/94	965.00	S&S/KBA	4690
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 05/20/94 (Steve Bonham only)	06/06/94	137.80	S&S/KBA	4657
American Express, Steven A. Bonham, Account No. 3739-712166-31003, statement dated 02/19/94 (Steve Bonham only)	03/07/94	30.00	S&S/KBA	4560
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 12/19/94 (Steve Bonham only)	01/06/95	572.70	WPI/KBA	7298
American Express, Steven A. Bonham, Account No. 3713-813956-82003, statement dated 4/20/95	06/29/95	799.50	WPI/KBA	7552
TOTALS		49,078.75