by Structured Settlement Watchdog
The SEC Complaint against Woodbridge alleges that many of their sales agents were not associated with registered broker-dealers or investment advisory firms. The SEC also alleges, chillingly, that several of these sales agents, including some of the highest producers, had been censored or barred by the SEC, FINRA or state sales regulators. Woodbridge did not disclose this to investors.
While I am happy to see that the SEC is cracking down, perhaps they need to turn some attention to a New York entity whose managing member has a felony record:
Advance Funding LLC, is another intermediary for the purchase of structured settlement payment rights out of New York City, whose managing member* is Daniel Cevallos (a/k/a Dan Cevallos) According to FINRA records, on May 14, 1997 Daniel Cevallos (Registered Representative, Brooklyn, New York) was fined $75,000 and barred from association with any NASD (now FINRA) member in any capacity. The sanctions were based on findings that Cevallos executed unauthorized securities transactions in the account of a public customer without the customer's knowledge Also, Cevallos falsified records to prevent detection and to camouflage his failure to execute a customer’s order. At the time Cevallos was barred, only 4 short years after being licensed, he had already done time at two firms that were later expelled by FINRA. [ Source: FINRA Broker check]
Guaranteed Rate of Return of 10% on Investment?
In December 2015, my blog post Sell Your Structured Settlement But You Have to Sign a Non Disclosure Agreement? I wrote about, without then naming Daniel Cevallos, that it " emerged that one structured settlement purchaser, apparently associated (common ownership/control) with a then NASP member (Northeastern Capital Funding), is apparently requiring that a seller sign a non disclosure agreement and is purportedly pitching a guaranteed rate of return of 10% on investment. When the company was contacted last week, a company representative would not confirm that they guaranteed 10% , a simple yes or no answer, before getting to "How?" He stated that they had various investment programs insisted that a non disclosure agreement be signed before he would discuss them. Well done, that just simply raised the hackles, particularly since the name of the firm did not come up under FINRA Broker Check or in the SEC Investment Adviser data base.
In a case I am aware of an annuitant sold structured settlement payment rights to Advanced Funding LLC for $1,500,000. The effective discount rate was very competitive. but the deal was peculiar in that only $500,000 in cash was paid to the annuitant, the balance $1,000,000 was placed in a purported fund that "earned 10% guaranteed". A lawyer was retained by the annuitant and upon information and belief, the return of the $1,000,000 was negotiated.
How is it that an individual felon that is barred from FINRA, who in 2002 pled guilty to a felony and served prison time for wire fraud for selling non existent vending machines before a Federal Judge is able to thumb his nose at FINRA with an office right on effing Wall Street?
According to an affidavit submitted by his former common law wife, Dan Cevallos pled guilty to Judge Richard Conway Casey and served prison time for wire fraud for selling non-existent vending machines. [ see Download Dan Cevallos Affidavit of Julia Ashirova p 1 of 6 #6 Also see United States Southern District of New York 1:00 cr-01309-RCC-2, the plea was made March 6, 2002]. According to the affidavit Cevallos agreed to serve 18 months in jail and 36 years of probation. Furthermore Cevallos had to pay restitution in the amount of $278,720.50
According to the Ashirova affidavit, Cevallos decided to cheat the government with respect to the restitution by agreeing to pay maintenance due under a support agreement instead as a marketing consulting agreement drafted in September 2012 with his business, so he could report it is a business expense and lower the income he reported to the government from his business. The marketing consulting agreement purportedly contained no obligation on the part of Julia Ashirova and purportedly required installment payments to 2028.
*Cevallos signed a notarized declaration that he was managing member of Advance Funding LLC in connection with another lawsuit, BOFI Federal Bank v Advance Funding LLC et al. US District Court Western District Washington 2:14:-cv-00484-BJR Document 31