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group of State Farm agents, including Mr. Young, to “get out” of
the Aegis system and to resolve their tax audit matters.
While the criminal investigation was ongoing, the IRS also
commenced an investigation of Mr. Richardson under section 6700,
which imposes a civil penalty for the promotion of abusive tax
shelters. Petitioners were formally notified of the
investigation, likewise conducted by Mr. Morgason, in or about
September of 2002. Mr. Richardson attended an initial conference
in connection with the section 6700 investigation on November 8,
2002, and both spouses attended a closing conference on December
17, 2002. Mr. Richardson raised various frivolous arguments at
those conferences, including challenges to the authority of the
IRS, and while he provided documents, he declined to provide any
of the documentation requested by Mr. Morgason.
Following the December meeting, the IRS referred the section
6700 case to the Department of Justice. On February 5, 2003, the
United States filed a complaint in the U.S. District Court for
the Southern District of Ohio against Mr. Graham, individually
and doing business as Graham & Associates, and against Mr.
Richardson, individually and doing business as HGAMC. United
States v. Graham, No. 1:03cv96 (S.D. Ohio filed Feb. 5, 2003).9
The Government sought injunctive relief against the defendants
with respect to promotion of alleged abusive trust schemes. Id.
9 See infra discussion regarding judicial notice.
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