United States v. Estate Preservation Services

MEMORANDUM OF DECISION AND ORDER

(Findings of Fact and Conclusions of Law Included)

This case is presently before the court on plaintiffs motion for preliminary injunction pursuant to sections 7402(a) and 7408 of the Internal Revenue Code. The court conducted an extended evidentiary hearing on this motion on February 3-4, 17-18, March 24-25, and May 5, 1998. Throughout these proceedings, the following appearances were made: Charles P. Hurley, Esq., appeared on behalf of plaintiff, the United States of America (also “the government”); Joe Alfred Izen, Jr., Esq., appeared on behalf of defendants Estate Preservation Services, a Trust, Estate Preservation Services, Inc., and Robert L. Henkell; Stephen J. Russell, Esq., appeared on behalf of defendant Charles Scott Grace; and Spencer K. Malysiak, Esq., appeared on behalf of defendant William L. Sefton.

I. Factual and Procedural Background.

Defendant Estate Preservation Services (“EPS”) is in the business of, inter alia, marketing trusts and other asset protection tools. In 1992, EPS began selling irrevocable, non-grantor trusts called “As set Preservation Trusts” (“APTs”). EPS marketed and sold these trusts through a nationwide…