The Region - News from Feb. 4, 1986

A beleaguered oil and gas tax shelter organized by a fugitive Orange County businessman was placed into receivership by U.S. District Judge Consuelo B. Marshall in Los Angeles. Since 1981, about 2,000 people, mostly from Orange County, had invested about $20 million in cash and $280 million in notes in Western Reserve Oil & Gas Co. Ltd. drilling partnerships. The partnership was formed by Trevor Phillips, who has been a fugitive since a bench warrant was issued for his arrest last September. Most of the investors have been ordered to pay millions of dollars in back taxes and penalties to the Internal Revenue Service, which has described the program as an “abusive tax shelter,” according to court records. Marshall appointed Richard G. Shaffer, a former banker, as receiver. Charles Slyngstad, an attorney for about 40 investors, said the receivership was needed to stop about $5,000 a month in natural gas royalties from being transferred to two trust accounts in the British Channel Islands.