by John Darer CLU ChFC MSSC CeFT RSP CLTC
2018 was a good year for the structured settlement primary market. Preliminary reports suggested after the end of the 3rd Quarter that industry production might again exceed the symbolic $6 billion. We await the final tabulation. Extreme stock market volatility leading to a certain "sobriety" in investor confidence, interest rate improvements in the second half of the year, new products and companies available to a larger group producers and greater sophistication of industry participants all played a role.
2018 was a year of major changes in the fortunes of structured settlement factoring participants as a cascading amount of bad news and exposure of an insane amount of corruption showcase an industry that is a hot mess, not unified, with no accountability from a lack of regulation and for the most part,devoid a moral compass. Bad business practices in the secondary market endure. The National Association of Settlement Purchasers has suffered from membership attrition as Seneca One and Novation Funding have left and Stone Street Capital was acquired by JG Wentworth. JG Wentworth has had the advantage of a very low cost of money which meant that it was difficult for other buyers to win in head to head competition. Other companies are mired in costly litigation with each other or with third parties (including former customers) that threaten the financial viability of a number of companies.
Here is a month by month digest of our industry and related commentary from 2018:
1/9/2018 Annuity Sold, LLC and other companies associated with Owings Mills duo Ryan Blank and Richart Ruddie are nailed for fraud in a Structured Settlement Buyer crackdown by the Maryland Attorney General. As part of the settlement Annuity Sold and the others agreed to be banned from doing business in Maryland for 7 years and had to pay restitution, fines and costs.
Lincoln Financial announced it had entered into a definitive agreement to buy Liberty Life Assurance Company of Boston from Liberty Mutual Group
MetLife, inc. announced a merger between subsidiaries Metropolitan Tower Life and General American Life Insurance Company to streamline its corporate and administrative structure.
1/26/2018 An Arizona Bar complaint is filed against Kelly Warner Law Firm and 3 of its partners stemming from a scheme to defraud the Courts and scam Google into de-indexing content alleged to be defamatory. Firm is tied to Richart Ruddie, the Owings Mills fraudster.
USPTO issues Woodbridge Wealth Trademark less than 2 months after SEC sued Woodbridge and its former CEO alleging a $1.2 billion Ponzi scheme
2/2/2018 Florida structured settlement factoring company Novation Funding seeks Suffolk County New York approval to buy $4.6 million in future payments for $9,000
One month after payments were due to star Barry Cooper has not received the " secondary market annuity" payments he acquired from Somerset Wealth (with substantially the majority of his retirement savings).
The Consumer Financial Protection Bureau (CFPB) published an update to its guide for people who have disability, personal injury or structured settlement payments, focusing on " What should I know before giving up my monthly disability, personal injury or structured settlement payments in exchange for a one-time lump sum payment?"
Berkshire Hathaway Structured Settlements Expands Its Hardship Exchange Program to Arizona, New Jersey, Pennsylvania, Virginia, West Virginia. Cash now pushers are up in arms.
Zak Thompson, a 26 year old Maryland Reliance Funding factoring company employee, unethically gave skip trace Info on a Maryland cop to a "Bro", Eugene Matusevich who then harassed the cop over a $50 Ticket.
Liberty Life issues answers to important questions about LLAC Notice of Financial Commitment, MIC Guarantees and BARCO.
Genex Capital is now suing Terrence Taylor, the black amputee burn victim with a young child over an investment it made in structured settlement payment rights. On October 27, 2017, there was a ruling in Portsmouth Circuit Court that Taylor's case could proceed against Structured Asset Funding/123 Lump Sum and Isettlements, an affiliated company of 123 Lump Sum to seek vacated court orders and unwind many of the 8 improvident structured settlement factoring deals originated collectively by those entities. New York Life Insurance Company, the annuity issuer sought to file an inter pleader which would suspend payments to investors, until the Court determines who they belong to. Taylor says he was a resident of West Virginia at the time of many of the transactions, which were submitted by Stephen Heretick, the same lawyer, to a Portsmouth VA Circuit Court that is at the center of a Class Action suit over thousands of other transactions.
3/28/2018 On a lighter note, I pranked Conshohocken Pennsylvania factoring company CBC Settlement Funding and , apparently determined to chase down every lead , they returned a contact from Jabba DeHutt with an email address of Jdehutt@starwarz.com
3/27/2018 The fact that "settlement planners" are using the term "structured settlement planning", separate and distinct from "settlement planning" is recognition that there is specialized knowledge and skill in planning with structured settlements. A structured settlement is a core settlement planning tool and it is also a tool, which, if effectively used, can bring about settlements that result in the satisfaction of the parties. Planning ahead adds an additional dimension to the process and allows participants to see issues and mind the gap.
3/25/2018 Structured Settlement "Restructuring" Scam is Exposed
3/21/2018 I examined the ethics of a national Financial Services Company to finance the purchase of structured settlement payment rights from a structured settlement annuitant at a substantial discount and subsequently benefit from fees derived from providing financial advisory services or stock brokerage services to the would be seller, solicited by an licensed or unlicensed representative of the originator of the deal on the very same funds?
A $2,000 property dispute arising from the removal of a maple tree under which a woman's beloved pet was buried, set off a chain of events that 8 months later, has led to the resignation of powerful longstanding West Virginia state delegate Ron Walters, a Charleston WV structured settlement broker with Structured Financial Associates.
3/12/2018 We exposed Gold IRA Guide to structured settlement derivatives, which they scam labelled Secondary Market Annuities, for misrepresenting risk of structured settlements derivatives.
3/10/2018 We questioned the adequacy of the vetting process of originators of structured settlement derivatives that settlement planners are selling to lawyers and their clients
JG Wentworth in epic FUBAR advertises " If it doesn't make dollars it doesn't make sense"
Structured Settlement Anti-Assignment Provisions| Non-Enforcement Leads to Suit Against Insurer Cordero v Transamerica Annuity Service Corporation 18-cv-21665 United States District Court Southern District of Florida
CBC Settlement Funding engages in fraudulent advertising, through Sell Any Annuity, suggesting that selling your annuity or structured settlement(for pennies on the dollar) will earn you something in an April 21, 2018 tweet.
Novation Funding Concedes that the 113,010 unwanted calls to 3,577 accounts reflected in their own records in the TCPA action Kevin Buja, individually and, on behalf of others similarly situated, Plaintiff v Novation Capital LLC et al. United States District Court Southern District of Florida Case 9:15-cv-81002-KAM Document 182 Matter was settled later in the year.
We expose two consumer scams that are making the rounds in the structured settlement secondary market (1) Structured Settlement Factoring Company Uses Potentially Unlawful Investment Projection to Twist the Annuitant Out of Their Structure (2) Structured Settlement Factoring Companies are Selling Irrational Fear Using the State Insurance Guarantee Funds Limits as a Weapon, to Induce People to Sell at Huge Discounts
Maryland Law Professor Karen Syma Czapansky questions whether courts should permit sales of periodic payments under a structured settlement when the structured settlement is compensation paid by the defendant in a tort suit brought by or on behalf of the seller for damages caused by childhood lead poisoning that left the seller incapable of self-support. Professor Czapansky concludes that allowing sales in this situation is unjustifiable and opines that the Maryland SSPA should be amended to ban the sale of structured settlements by lead-paint victims, just like workers compensation recipients. (36 Va. Envtl. L. J. 1)
Michelle Caine of Prudential was named President-Elect oi the NSSTA
We publish "6 Ways to Clean Up Structured Settlement Advertising Fraud"
General Electric Co is working with investment bankers to find ways to shed its insurance business, which has caused it to book hefty charges while sparking shareholder lawsuits and an investigation by U.S. regulators, people familiar with the matter said on Tuesday May 22, 2018, according to CNBC. Vigilance to protect structured settlement annuitants who were sold structured settlements on GE heritage and GE Capital guarantees and Keep Well agreements is required.
SEC Says Woodbridge Ponzi scheme ripped off 2,600 retirees in its amended complaint
Questions Arise over whether New York's Advance Funding is really a Ponzi scheme
There is a Class Action settlement in the Aviva CMA class action case favorable to structured settlement annuitants
Structured settlement.us.com deceitfully suggests in their fraudulent ads all over the internet that selling your structured settlement for pennies on the dollar is a financial windfall.
Toronto based settlement purchaser Strategic Capital is exposed for having one of its employees publish a customer review on LinkedIn one month after the employee, Max Worth, was hired.
DCF Exchange, a broker of structured settlement derivatives, publishes a supposedly redacted closing book as an exemplar, but it reveals confidential information
6/15/2018 I sleuth efforts by Buffalo settlement planner John Bair to launch a "structured settlement exchange". Ask reasonable question about how conflicts of interest will be resolved given that he/his entities are directly or indirectly involved in pre settlement loans, structured settlement brokerage, QSG adminstration, investment advisory, origination of structured settlement factoring, assignment companies. Asks me to sign an unreasonable NDA which I refuse.
Highpoint Funding, in high grade BS from Boca Raton, suggests that you pay off student debt by selling your structured settlement for what amounts to pennies on the dollar.
TopTenReviews is exposed as a dubious review site that has for intentionally misrepresented to consumers that certain unlicensed and unregulated companies which buy structured settlement payment rights, for pennies on the dollar,as structured settlement annuity companies.
A representative of SMA Hub sends an email solicitation subject line "Guaranteed A+ rated annuities ROI 4-5%" to a CT resident despite not holding a valid CT insurance license.
Hartford Financial Services Group (The Hartford) completes the sale of its Talcott Resolution life and annuity run off unit to an investor consortium.
CBC Settlement Funding continues its downward advertising spiral by suggesting that selling your structured settlement (for pennies on the dollar ) is a prize that you should keep your eye on.
A sharp Chester County, PA Judge denies the 3rd attempt in 11 months by factoring companies to pillage the structured settlement of a Jerry Sandusky Penn State sexual assault victim.
Novation Funding's continued fraudulent advertising about maximum payouts is again exposed in the Lydell Todman case and its relentless efforts to grab a lead paint victim's structured settlement in the Junior Matos case.
Seneca One undermines the entire structured settlement secondary market in a single tweet that quotes hedge fund titan Paul Tudor Jones "Don't focus on making money, focus on protecting what you have". Translation...protecting what you have Seneca One style is selling your structured settlement for pennies on the dollar.
- Whistleblower suit v Novaton Ventures LLC and John MarsanoFormer employees claim that they observed various unethical and illegal conduct approved and encouraged by settlement purchaser Novation's senior management Novation Ventures, LLC, a Florida Limited Liability Company, Plaintiff and Counter-Defendant v James Viera and Bryann Cabral, Defendants and Counter-Plaintiffs | James Viera and Bryann Cabral Plaintiffs v John Marsano, Defendant Circuit Court 15th Judicial District in and for Palm Beach County, Florida Circuit Civil Division Case 2017CA00619XXXXMB
- More fraudulent advertising from Sell Any Annuity. They claim to be find you the best structured settlement broker when multiple calls confirmed that the only broker ever recommended CBC Settlement Funding.
- United States Court of Appeals affirms Summary Judgment that United States does not have to fund ELNY Insolvency shortfall KAREN L. SHAW, INDIVIDUALLY, AND KAREN L. SHAW, AS GUARDIAN OF THE PERSON OF RICHARD SCOTT SHAW, AN INCOMPETENT, RAYMOND A. SHAW, INDIVIDUALLY, Plaintiffs-Appellants v. UNITED STATES, Defendant-Appellee 2017-2136 Appeal from the United States Court of Federal Claims in No. 1:14-cv-00783-MMS
- We questioned of the utility of Structured Settlement Commutation Riders in view of the substantial Increase in Estate Tax exemption
- Florida retirees who were sold "Secondary Market Annuity Buyers" by Somerset Wealth, payments that have been entangled in the Access Funding litigation and Appeal are now missing 8 months of payments.
- DRB Capital sets up a Bounty Fund for Whistle blowers as Structured Settlement Factoring Civil War begins
- Nevada District Court judge Kerry Earley found that structured settlement factoring company Seascape Leasing LLC and lawyers, Patrick M. Etchebehere and Julie D. Noe "committed a fraud on the court by clear and convincing evidence" in a prior successful attempt to transfer the structured settlement payment rights of Brandon Boiclair [See in Re: Seascape Leasing, LLC District Court Clark County Nevada A-18-775027-P below]
- Structured Settlement Annuitant Bill Green, is threatened by Novation Funding over advances given on a structured settlement factoring deal he cancelled for a grotesque deal offered by Synergy Settlement Solutions LLC, formed only this month. [ no relation to Synergy Settlement Services]
- RSL Funding claims in a September 12, 2018 tweet, that selling your structured settlement or annuity (for pennies on the dollar) is a home run in their book
- A legal blog about structured attorney fees published a cringe worthy, in-artfully worded post about IRS Private Letter Ruling 199943002, a 20 year old ruling that preceded the introduction of variable structured settlements by Metropolitan Life Insurance Company.
- A number of settlement purchasers are using the " Do You Know What You're Structured Settlement Is Worth?" hack to get your confidential information.
- Negotiation Firm Launches website. Offers Unique Value Proposition to Selling Structured Settlement Annuitants
- AIG Structured Settlement Class Action is dismissed with prejudice
Settlement Planning firm claims that a qualified settlement fund is "a tax free way station for attorney fees", when If it's a trust under state law, wouldn't any income and gains generated by the investment of the assets in the trust be subject to tax on a state or federal level?
The importance of periodically reviewing beneficiary designation is illustrated in true story of a young husband doesn't get around to changing a beneficiary from childhood structured settlement and disinherits his young wife from income that he and she were dependent on to make ends meet.
Another Florida structured settlement factoring company calls selling your structured settlement (for pennies on the dollar) a touchdown.
A California lawyer supports an 18.82% Discount Rate in a highly questionable IPA for a disabled African American New York man who had an 11.77 discount rate in a prior attempt rejected.
Subterfuge? When assembled in a timeline over the course of two years, publication dates of a series of articles by industry commentators and in trade journals coincidentally correspond to significant dates in the AIG Structured Settlement Class Action, such as filings of motions or briefs and the dismissal with prejudice.
John Bair of Milestone Consulting confirms in an email to a third party from his Milestone email address that it is "the only primary market as well as origination firm for secondary market transfers that he knows of". Still does not publicly address the conflicts of interest asked of in June.
Seniors have endured investment nightmare after investing their lottery annuity winnings with New York's Advance Funding at a return that exceeded the junk bond rate in the year of investment.
True SMA LLC, a firm named after Secondary Market Annuities, i.e. scam labeled structured settlement derivatives, is offering negotiating services to structured settlement annuitants who have contracted with structured settlement buyers. The firm offers to negotiate better deals for structured settlement annuitants seeking to sell structured settlement payments but then takes a rapacious, out of touch amount of the money from the poor bastards selling their annuities. Following the breadcrumbs from a recent True SMA LLC business dealing has revealed reason to question True SMA LLC's business practices.
Paralyzed 2003 Staten Island Ferry Crash victim James McMillan, fights back against vulture factoring companies. who exploited McMillan and took advantage of historically lax ex parte reviews in Judge Michelle Morley's Sumter County courtroom (9 yesses in 2013 alone), that pillaged his structured settlement and undid a lot of the good work that Evan Torgan, his New York personal injury lawyer did in getting him the recovery
On October 25, 2018, The United States District Court, Southern District in Miami, found former Woodbridge CEO Robert Shapiro, his wife and various named entities owned by Shapiro responsible for paying $892 million to the SEC. The fines will go to a "fair fund" that will be used to help compensate the victims of $1.2 billion Ponzi scheme.
Woodbridge Group of Cos., 17-12560, U.S. Bankruptcy Court, District of Delaware.
Securities and Exchange Commission v. Shapiro, 17-24624, U.S. District Court, Southern District of Florida.
A number of plaintiff settlement planners are listed on the annuity brokers list for the United States Department of Justice. Given that the prerequsite declaration have to be executed under penalty of perjury and must declare that they have provided substantial services to defendants and tehir counselk in each of the preceding 3 years, have any committed perjury and/or exposing themselves to US Attorney General prosecution?
"Secondary Market Annuity" buyers the Walls (retirees from Pittsburgh) are screwed as the 3rd Circuit reverses a 2017 summary judgment against the intermediary Altium Group. Clearly the "high yield low risk" investment sold to the retirees by Altium via the financial planner is anything but.
Dupage County Illinois emerges as a structured settlement factoring forum shopping venue.
In a November 1, 2018 letter to the Board of Directors of the National Association of Settlement Purchasers, DRB Capital CEO and Bounty Payer James Terlizzi maintains the following are presently occurring in the structured settlement secondary market:
- Forum Shopping
- Hiring of " Shill Counsel"
- Unlicensed Practice of Law
- Suborning (indeed conspiracy to commit) perjury and a myriad of other unfair, deceptive and illegal acts are rampant
- Contract poaching
- Relocating claimants
Document fabrication and slander are too common to mention, wrote Terlizzi. Everyone receiving this letter knows exactly what we are talking about and also knows this is going on at unprecedented levels. Theft and thuggery have replaced robust but good faith competition.
It emerges that the " SAFE IRA Guy" sold a Woodbridge Ponzi scheme investment to an 80+ year old Delaware couple (the husband is 88).
The professional incompetence and corruption of Maryland attorney Charles E. Smith comes to the fore as a list of annuities involved in his IPA scam with Access Funding, shows that completed transfers exploiting mostly minorities on 14 annuities which were issued by Allstate Life Insurance Company were completed at rates that well exceeded the 8% discount rate that Allstate Life Insurance Company offers to its annuitants thorugh the in house Advance Funding Exchange Program.
A November 5, 2018 article in Financial Advisor magazine opines that “financial advisors have a conflict of interest when it comes to the pension vs. lump sum decision.” Same as what I've been saying all along with respect to unlicensed representatives of settlement purchasers giving uninformed unsuitable financial advice to structured settlement annuitants.
Barry Cooper, a Florida retiree files a FINRA complaint against Somerset, its principal and several other employees stemming from the sale of what were labeled secondary market annuities. Cooper's payments were supposed to start in January 2018 but to date has received nothing pending an Appeal which is being heard in March 2019. The Oregon firm allegedly took an order from the retiree's wife, despite no written legal authority to speak with the wife about the retiree's account, such as a power of attorney to act on her husband's behalf. Other allegations against Somerset:
- Breach of Fiduciary Duty
- Negligent Supervision
- Breach of Contract
- Unauthorized Trading
American General Life Insurance Company has been successful in a Kentucky Supreme Court decision overturning a Kentucky Court of Appeals decision which would have permitted the factoring of workers compensation structured settlements if it had been allowed to stand.
Burlington County NJ Judges Approve 3 Structured Settlement Transfers in 3 Months for Annuitant with TBI!
Two settlement planning firms merged as Millennium split off from IFS and combined with Settlement Alliance to form Sage.