by Structured Settlement Watchdog
The Junior Matos case is another recent example of how structured settlement factoring companies/settlement purchasers take advantage of vulnerable personal injury annuitants for massive profits, manipulative tactics, and in some cases questionable and unconscionable methods.
Junior Matos-Dejesus is a 26 year old Hispanic male who suffered lead poisoning as a child. The settlement of his case resulted in a structure with Metropolitan Life that would pay the following periodic payments:
Starting 12/26/2009 $2,092.00 a month for (360) payments through and including 11/29/2039 and for life thereafter with a 3% annual increase every 12/26:
Total Guaranteed Payments: through 2039: $1,194,333.24
At age 24, just four months after Judge Norma Ruiz approved his first transfer in Bronx County, NY, Junior Matos was contacted by a third-party factoring company called Novation Funding. Novation Funding is also known as Novation Settlement Solutions (f/k/a Novation Capital) and several other LLC and DBAs. As I have documented in prior posts, Novation continues to fraudulently advertise maximum lump sum payouts and has taken advantage of young minorities, most notably Cedric Martez Thomas, who was financially raped for in excess of 1 million in profit spread after being groomed by Novation. Novation attempted multiple transfers with Junior Matos; one time in New York County, NY and twice in Bronx County, NY, but all three attempts were denied by astute New York Supreme Court judges. The denials were primarily due to Junior receiving $170,000.00 four months prior with nothing to show for it, and not being in the best interest of Junior’s 4-year-old son.
IN RE: JUNIOR M., OF THE PETITION FOR APPROVAL OF THE SALE AND TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS IN ACCORDANCE WITH GEN. OBLIG. LAW SECTION 5-1701 v. X
April 03, 2017
NY BRONX SUP. CT.
0022650/2017
CIVILJudge(s): NORMA RUIZ
Approved
2. RAINBOW ROAD v. METROPOLITAN LIFE INSURANCE COMPANY, METROPOLITAN INSURANCE & ANNUITY COMPANY AND JUNIOR MATOS (Novation)
August 25, 2017
NY NEW YORK SUP. CT.
0157646/2017
CIVIL Judge(s): SCHECTER, JENNIFER G.
Denied Download NY County 0157646-2017 denial 10-5-2017
3. IN RE: LONEBARK, LLC FOR JUDICIAL APP ROVAL OF THE SALE AND TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS PUR v. METROPOLITAN INSURANCE AND ANNUITY COMPANY, METROPOLITAN LIFE INSURANCE COMPANY AND JUNIOR MATOS (Novation)
September 06, 2017
NY BRONX SUP. CT.
0028383/2017
CIVIL Judge(s): ALISON Y. TUITT
Denied
4. LEADER, ORANGE v. METROPOLITAN LIFE INSURANCE COMPANY, METROPOLITAN INSURANCE & ANNUITY COMPANY AND JUNIOR MATOS (Novation)
November 10, 2017
NY BRONX SUP. CT.
0030771/2017
CIVIL Judge(s): ROBERT T. JOHNSON
Denied
5. BOGMIRE SERVICES V. J M (Novation)
February 13, 2018
FL PALM BEACH 15TH JUDICIAL CIR. 2018CA001844 CIVIL
Judge: Donald Hafele
Canceled Download 502018CA001844XXXXMB_2 Palm Beach County 2-13-2018 Denied
6. R MUY LLC (JG Wentworth) V. JUNIOR MATOS DEJESUS
March 28, 2018
FL PALM BEACH 15TH JUDICIAL CIR. 2018CA003780 CIVIL
Judge: Edward Artau
Approved Download Matos Approved 4-25-2018 JGW
The original transfer agreement filed in New York between Novation Capital and Junior Matos is as detailed:
Selling
(Buyout of remaining Guaranteed Payments on the policy)
Starting 12/26/2027 $3,561.49 a month for (144) payments through and including 11/26/2039 with a 3% annual increase every December 26th.
Purchase Price: $115,895.00
Total Aggregate of Payments: $606,537.26
EAR: 10.49%
According to our source, Novation Capital would have profited roughly $137,000.00 from this transaction if it were approved, receiving MORE money from the policy than the actual policy holder cashing out, all while the reps from Novation try to build a “trusting friendship” and “long-term relationship” with Junior just to “get the deal done”. Novation Capital, which is located in West Palm Beach Florida, flew representatives out to Junior’s hometown in New York, met his family, friends and child, took him out to lavish dinners, gave him “advances” to “hold him over”, but were denied in three structured settlement transfer hearings by 3 separate New York judges (two in the Bronx and one in New York County) under three separate aliases.
In the beginning of January 2018, after Junior got into an altercation where he was almost stabbed to death, suffering a severely damaged his left hand. Novation took this as the perfect opportunity to fly out their representatives and pitch that “new life” in Florida to Junior while he was sad, vulnerable, and on medication from surgeries done in the hospital. They literally went to his hospital room, and just days after he was released from the hospital Junior was on a plane with the Novation reps, off to West Palm Beach, FL to attempt the transfer in Palm Beach County, FL
The new Novation "deal" using the Bogmire alias, was worse than the New York deals.
Selling
(Buyout of remaining Guaranteed Payments on the policy AND 9 years of Life Contingent pays) Starting 12/26/2027 $3,561.49 a month for (144) payments through and including 11/26/2039 with a 3% annual increase every December 26th
AND
Life Contingent pays starting 12/26/2039 $5,077.83 a month for (108) payments through and including 11/26/2048 with a 3% annual increase every December 26th.
Purchase Price: $137,500.00
Total Aggregate of Payments: $1,225,571.64
EAR: 11.91%
Compared to the previous transfer attempts in NYC, on this deal, Novation Capital tacked on $619,034.38 worth of life contingent payments on this transfer while only offering $21,605.00 more on the purchase price, still profiting a massive amount of roughly $300,000.00 short of where Junior could have negotiated if guided correctly. This was a totally unnecessary move but Junior claims he never noticed. Novation clearly sensed an opportunity to take advantage of the fact Junior being a lead poison case, with no high school diploma, no financial guidance, and trusting people who he described as “like family at the time.”
Our source, which operates a unique business that helps prospective sellers, relates that Junior Matos has lived with his mother his whole life. He has never had a job. He has never had a (driver's) license. He did not graduate high school. He has a 4-year-old child. His current monthly annuity check ended in July and he was due to sell the remaining of any and all future income to Novation Capital for $137,500.00. As you will read on, and with our help, Junior did not become another victim of Novation or the factoring industry as a whole.
Our source, who also has worked for a Florida factoring company and has inside knowledge of the structured settlement secondary market says from their experience "and a firm fact, all companies that purchase structured settlements will take advantage wherever possible and whenever the opportunity presents itself. Certain companies will bend the rules and even break the law, but they will all rip their clients off and short change them whenever possible. They will all try every method to convince someone to sell their payments and as much as possible"
When Junior was relocated to Florida, he was originally worried about just getting his deal done. Junior was taken by Novation reps to Fairway Vista Apartments located at 1951 Brandywine Road, West Palm Beach, FL 33409, (just 9 minutes away from the Novation West Palm Beach headquarters office at 1641 Worthington Rd Ste 410 West Palm Beach, FL 33409-6707 ) and where purportedly Novation has a business agreement with management for short-term monthly leases. According to our source, management at Fairway Vista became very familiar with what was about to happen to Junior, and helped him as much as possible once they were aware of what Novation had done/was attempting to do. They also informed our source that Novation used that location/property many times)
Originally, Novation Capital wrote out a check paid in full to Fairway Vista Apartments for Junior’s 3-month lease. They also helped him set up with electric and cable in his name. These accounts were set up and paid monthly on auto withdraw with a Novation credit card.
Junior was given advances via Western Union to help pay for other expenses. He was also given a prepaid phone (“burner phone”) to use so that he could not be contacted or reached by “competitors”. He was told not to answer his door or, Novation reps threatened, he would “lose everything.”
Novation reps took Junior to a thrift store where they got him a two-seater couch, a mattress to sleep on, and gave him a Novation towel to shower with. Since he does not drive, Novation reps would come over roughly twice a day to bring him food like Chick-Fil-A, and give him encouraging pep talks about how he is going to have over $130k, how he is going to buy his own new condo, how he is going to buy a brand new car, how he is going to go to the outlets and come out with bags of new clothes and put them in the trunk of his new car with the air condition blowing in his face. A rosy picture painted by the Novation that just makes no sense if you understand the math. Our sources have put in writing that they personally witnessed these talks.
The Fracas at The Palm Beach County Courthouse
Our sources found Junior's pending case online but his information was redacted. It wasn’t until March 12, 2018 (at the hearing date) when Judge Donald Hafele ordered the full name of the respondent (Junior Matos) be listed on the petition be listed, that Junior was able to be contacted at his apartment at Fairway Vista. After our source reviewed every page of the documents filed in Palm Beach County (see #4 above) it became apparent that Junior Matos, had absolutely no idea that he was selling his Life Contingent payments in this deal. He expressed that he understood they were only available if he were living at the time and he was saving them as his insurance for the future of himself and his son. This really shocked him. Our sources also explained that even if Junior were not to sell the life contingent payments, he was still getting a horrible deal, and that they could help him negotiate a new deal where he keeps his life contingent payments and receive a lot more than $137,500.00.
Even after being aware of how Novation was taking advantage of him, Junior still wanted to work with Novation because he felt a sense of loyalty since they had “helped” him out the last few months. He felt they were really his friends, and felt it was the right thing to do. One of the reps, Norman Gonzalez, claims he was from New York City and looked at Junior like a son/little brother. They conversed in Spanish and he seemed to be really out to help Junior. So even after learning of their true intentions, Junior wanted to still make sure they had his business. Junior also did want to remain living in Florida.
Our sources explained that he can still work with Novation, but he would have to go to court on the scheduled date which was continued to 3/21/2018 and let the judge know he did not want to move forward with the deal. This would allow him to negotiate a new deal without his Life Contingent Payments included. Junior agreed. So for the next week or so before court, Junior did not let on that he was going to tell the judge to cancel his deal.
The morning of March 21, 2018, our sources assisted Junior to court to make sure everything went as planned and to give him support. There were 3 representatives present at the court house, from Novation. Norman, Cory, and Chris. There were also 2 attorneys. “There was an attorney named Scott Topolski, who was due to represent Novation (Bogmire). Another attorney named Scott Weires, was there to represent Junior. Novation hired an attorney to represent Junior, even though they were the adverse party on the case”.
Our source relates "When we arrived at the courthouse, Norman and Cory (Novation Reps) were standing outside the courthouse with attorney Scott Topolski. Norman immediately started yelling at Junior. Screaming at him. He was telling him that he’s a sellout for trusting these gringos. (He apparently thought our sources were another purchasing company of some sort, while there Was a gauntlet of representatives from a few companies trying to hijack Junior outside the courthouse). It was mayhem outside the court house. Junior was very shocked and upset. I’m not sure if he knew who to believe at first. Cory was standing behind our source "thugging" that he was going to “f*$& him up”. Norman was literally chest bumping and talking down to Junior. The attorney walked away."
He continues "Once inside, Norman tried to step in between Junior and I in line at Palm Beach County court security. He wasn’t successful and security took notice. Once through security, they again started yelling at Junior and a bailiff had to calm things down. Norman threatened to sue Junior and “ruin everything in his life”. Attorney Scott Topolski then came over and tried to pull Junior aside. Junior stated he will talk to him but only with our source present".
He continues "As we were leaving the courthouse, we were surrounded by the Novation reps in the elevator as they held the door not to let it close. They made physical threats to Junior and myself. They followed us outside. Even though Junior stated he would call them later, they (Novation reps) still surrounded him outside court. They were relentless and laced Junior with profanities, legal threats, and physical threats to myself as well". I’d never seen anything like it in any business, period.
Junior could barely speak. He stated that he had never experienced a situation like this, was extremely uncomfortable, and had no interest in working with Novation moving forward and would like to start his new transfer with a new a company. Even though the case was continued with Novation, Junior did have the ability to go elsewhere."
Our source took Junior back to his office and within a few hours Junior had a new purchase price of $245,000.00 selling his intended payments through 2039, not 2048. This deal enabled Junior to receive $129,105.00 MORE than originally offered by Novation and SAVE $619,034.38 worth of payments in his policy. His effective annual interest rate was less than 6% and its was shopped to about 6 different companies over the course of the day, using our source's skills/expertise.
The new transfer agreement filed in Palm Beach County, FL between JG Wentworth and Junior Matos is as detailed:
Selling
(Buyout of remaining Guaranteed Payments on the policy)
Starting 12/26/2027 $3,561.49 a month for (144) payments through and including 11/26/2039 with a 3% annual increase every December 26th.
Purchase Price: $245,000.00
Total Aggregate of Payments: $606,537.26
EAR: 5.93%
Our source continues that "Novation Capital did not stop there, they showed up multiple times to Junior’s apartment trying “outside the box” techniques to get his attention.
On or about Saturday March 24, 2018 Junior Matos contacted our source. "Apparently Novation had been knocking on his door for a half hour and he told them through the door that if they didn't leave, he was going to call the cops. Novation left and came back 15 minutes later, so Junior did call the police".
Another attempt by Novation included ordering Dominos Pizza to Junior’s apartment, hiding behind the delivery guy until Junior answered, then popping out trying to push his way into his apartment saying “Let’s talk over Pizza!”. Novation Capital also contacted management at Fairway Vista Apartments to see if they could call Junior down to the office without them (him) knowing they were there, but obviously that request was declined by Fairway Vista. It is also confirmed that Novation reps contacted Fairway Vista Apartments management to request their “commission” off of Junior’s lease".
Junior's transfer with JG Wentworth was ultimately approved in Palm Beach County, FL on 4/25/2018. Our source tells us "that did not go without payback to Novation . Junior paid $14,000.00 back to Novation Capital at the time of his funding for “cash advances” made from August 2017 through March 2018. They used a technique common to the factoring/purchasing industry, where by holding on to their continued case, and even with an approval on a new deal with a new company, the insurance company will not complete final paperwork with an open petition. So they basically held Junior hostage in a sense, unless he pays back the advances, which he was never provided proof of, they would not drop his case"
In a future post we will be profiling the business model of our source, which is not a structured settlement factoring company. They do not buy payments or complete transfers with annuitants. The sources have extensive industry knowledge, expertise, and resources. They say that in most cases, they assist the annuitant in negotiating with the company they are currently signed up with while awaiting the hearing date. This saves time for the seller, the court, and the insurance company.
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