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Sometime in 1973 or 1974, petitioners’ father, Victor Brincat
(Victor), founded Magna Carta University (Magna Carta), which was
intended to operate as a nonprofit educational institution,
consisting of a college of law, undergraduate colleges, and other
education programs. From Magna Carta’s founding until Victor’s
death in October 1988, Victor was president of Magna Carta.
Initially, Magna Carta was a section 501(c)(3) tax-exempt
organization, but respondent, during 1991, revoked Magna Carta’s
tax exemption retroactive to January 1, 1982. Around 1973,
Victor donated to Magna Carta a building located at 301 Linden
Avenue, South San Francisco, California (the building), which he
had purchased for $65,000.
About 2 weeks before his death, Victor established and
transferred all of his property to the Victor Victory Trust (the
trust). Victor and petitioners were the beneficiaries of the
trust. Victor named Arthur and Edgar as co-trustees of the
trust. Edgar was summoned to his father’s deathbed after many
years of alienation and was advised by his father of the
arrangement. After Victor’s death, Arthur became president of
Magna Carta and negotiated the sale of the building for $980,000
to a California partnership. An initial deposit of $60,000 for
escrow was received with $350,000 due before closing, along with
an executed note in the amount of $568,064 payable to Magna Carta
and secured by a deed of trust.
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