Homer L. Richardson - Page 12

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          meetings.  As an example of the latter, minutes of the HGAMC                
          board meeting held on June 27, 1997, read as follows:                       
               The Executive Director, Homer L. Richardson as                         
               instructed by the Board of Directors made available to                 
               the Board of Directors research from the Aegis Company,                
               Court Cases and legal opinions regarding IRS Notice 97-                
               24.                                                                    
               Mr. Richardson provided a report from the Aegis Company                
               that addressed each paragraph of IRS Notice 97-24 in                   
               which it was pointed out that Notice 97-24 was                         
               concerned with I.R.C. Sec 671-679 as it pertains to                    
               grantor trusts and that when a person attempts to apply                
               business trust procedures of tax reduction to an                       
               “ordinary trust” the trust is labeled by the IRS as an                 
               “abusive trust”.  The report concluded that 97-24 is                   
               not addressing legitimate business trusts.                             
               Mr. Richardson also provided a copy of American                        
               Jurisprudence Second Edition volume 13 Business Trusts,                
               Excerpts from Executive’s Business Law Section                         
               regarding Business Trusts, a report from George M.                     
               Turner, M.S. J.D. regarding the legal foundation of the                
               Business Trust and taxation of a Business Trust and a                  
               report from the Yale law [sic] Journal titled the trust                
               as an instrument of Commerce.                                          
               The materials supplied, the legal opinions and the                     
               research conducted regarding business trusts do not                    
               support the position that the Aegis business trust is                  
               the kind of trust that is addressed in IRS Notice 97-                  
               24.                                                                    
               In addition to personally implementing an Aegis multitrust             
          package, Mr. Richardson also became involved in the promotion and           
          sale of the Aegis system.  Beginning in 1996, Mr. Richardson sold           
          Aegis trust packages through Asset Protection Services, and it              
          was this business that was managed by HGAMC under the contractual           
          arrangement detailed above.  Generally, HGAMC would retain a                
          percentage of the sales price of a trust package as a commission            





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