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Petitioner did not seek a second opinion regarding the
legitimacy of NTS or its trust services. Petitioner did not
investigate Mr. Fritz’s background or attempt to confirm
Mr. Fritz’s qualifications. Petitioner did not consult his
personal accountant about NTS’s proposal that he establish trusts
as a means to protect assets and reduce tax liabilities.
Petitioners did not research NTS.
Instead, in addition to Mr. Fritz, petitioners relied on
information provided to them by representatives of NTS and by
other purported clients of NTS. Other than NTS’s promotional
materials, petitioners did not receive any written advice, such
as a written opinion from an attorney, regarding the promotional
materials received from NTS.
On August 21, 1997, pursuant to information received by
petitioners at the NTS seminar, petitioners formed RJ Pendergraft
Trust using a trust indenture notarized by an NTS employee.
Petitioner was the grantor, and petitioners were named trustees
of RJ Pendergraft Trust.
On August 22, 1997, two additional trusts, NHUSS Trust and
In God We Trust, were formed using declarations of trust
notarized by an NTS employee, which declarations were prepared by
NTS. NHUSS, Inc., was grantor, and petitioners were named
trustees of NHUSS Trust. NHUSS Trust was grantor, and
petitioners were named trustees of In God We Trust.
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