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but Mr. Gragg was not experienced in that area. In addition,
petitioner conducted his own independent research on the topic of
trusts.
After deciding to form the trusts, petitioner asked Phillip
Norton7 to serve as trustee of the Pago Trust. Mr. Norton had
met petitioner in 1986 when they were neighbors in the same
office park, and Mr. Norton later rented office space from
petitioner in 1989 or 1990. Mr. Norton was involved in the
communications business; he had no experience managing a trust or
developing real property. Petitioner then approached Jeffrey
Jeter and asked for his help in creating a trust. Mr. Jeter had
been a business acquaintance of petitioner since approximately
1989 and had performed some tool and die work for Brassworks.
Mr. Jeter had no prior experience with trusts. Mr. Jeter and Mr.
Norton did not know each other personally but were introduced by
petitioner during discussions about forming the trust.
On May 1, 1993, Mr. Jeter and Mr. Norton executed a contract
entitled “Pago Trust, A Contractual Fiduciary Trust”. The
contract contained a declaration of trust and a trust indenture
which together set forth the terms governing the administration
of the trust.
7Phillip Norton’s name erroneously appears as “Norton
Phillip” on the notice of deficiency issued to the Pago Trust, on
the petition filed in the name of the Pago Trust, and on all
subsequent filings.
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