by Structured Settlement Watchdog
Lawsuit Filed in Monroe County Maps Out Alleged Fraudulent Structured Settlement Factoring Forum Shopping Scheme
- A Rochester New York man has filed a a complaint against Fort Lauderdale based Structured Asset Funding, LLC d/b/a 123 LumpSum alleging a fraudulent scheme that involved faking the Plaintiff's relocation to Florida and the filing of two fraudulent structured settlement transfer petitions in Charlotte Circuit Court.
- Plaintiff also alleges that 123 LumpSum fraudulently obtained life insurance policies from Sagicor and Nationwide Life Insurance Company on Mr. Lape's life, the sole benefit of which was for a hedge for 123 LumpSum's assignees who lack insurable interest in Lape's life.
- The Complaint allege that 123 LumpSum deliberately misled Lape into participating in a fraudulent scheme orchestrated and master-minded by 123 Lump Sum to circumvent New York law.
- As a result of 123 Lump Sum's fraudulent scheme, the Complaint alleges that Mr. Lape fell prey to Re-Start Financial, Inc. (which plaintiffs believe is related to 123 Lump Sum) and was bilked out of a further $1,000,000 of his periodic payments in another fraudulent Florida transaction.
See Philip Lape , Plaintiff v Structured Asset Funding, LLC d/b/a 123 LumpSum, Insurance Company of North America, and Life Insurance Company of North America, Defendants New York State Supreme Court County of Monroe Index E2020003377 filed May 26, 2020. Download Lape v 123 LumpSum 2020-05-26 E2020003377 SUMMONS___COMPLAINT
- The action seeks a declaratory judgment pursuant to New York CPLR 3001, monetary damages for fraud, and damages for repeated violations of New York's Deceptive Trade Practices Law, N.Y. Gen. Bus. Law Section 349.
Damning Emails from Structured Asset Services representative clearly show the New York to Florida Inducement and Coaching
On December 5, 2014 12:09pm , Rochester New York resident Philip Lape received an email from Mel Luback of Structured Asset Services in Fort Lauderdale Florida, which said
" Please reach out to Andrew Cummings at 305-979-8420 when you have a minute. He is representing you at the hearing Monday and would like to speak with you briefly. Also please send back the insurance information by FedEx I sent last week"
But despite what Philip Lape was led to believe in Mel Luback's email, Cummings was NOT representing Philip Lape. Cummings was the attorney representing 123 LumpSum, the Fort Lauderdale Company that was seeking to buy Lape's structured settlement payments for pennies on the dollar.
According to the 123 LumpSum website "Structured Asset Holdings, LLC mainly conducts business under the brands of 123 Lump Sum, ** Cash, Structured Asset Funding, and Structured Asset Services, LLC. They operate as specialty finance companies that purchase structured settlements and insurance annuities". [ Retrieved June 3, 2020]
The rest of the "caper", with a damning email "paper trail" (sourced from the Complaint against 123 Lump Sum)
- On July 14, 2014 , 123 Lump Sum filed a Verified Petition under New York's Structured Settlement Protection Act 5-1701, et seq. seeking court approval in Monroe Supreme Court Index 8675/2014. 123 Lump Sum's counsel Sacco & Fillas attached a copy of the NY Structured Settlement Protection Act to the petition stating that the NYSSPA " is the controlling statute in this proceeding".
- On September 15, 2014 Justice Elma A. Bellini signed the Order to Show Cause filed by 123 Lump Sum and scheduled a hearing on November 7, 2014. Judge Bellini also ordered 123 Lump Sum to serve Philip Lape and the and the Monroe County Division of Social Services and Monroe County Child Support Enforcement Unit.
- This must have rattled 123 Lump Sum, because on October 17, 2014, Mel Luback, then purchasing agent for 123 Lump Sum told Philip Lape that 123 Lump Sum had a sure-fire way to do the deal in Florida instead of New York.
- Six days later, 123 Lump Sum filed a Notice of Continuance withdrawing the New York Petition and served it on Philip Lape at his Rochester New York address.
- On October 28, 2014, 123 LumpSum advanced $2,000 to Philip Lape and told him to use this money to go to Florida to rent an apartment. Working with realtor Tia Torres, Luback emailed Lape from his Structured Asset Services email address many times with possible apartments to rent
- Lape ended up signing a short-term lease for an apartment in Jacksonville, Florida from November 7, 2014 to June 7, 2016, but at the direction of of 123 Lump Sum (according to the Complaint), Lape cancelled the lease on January 4, 2015
- The rent was allegedly paid to the landlord Jason David Braeburn by Western Union.
- On November 21, 2014 at 10:34am Philip Lape received an email from Mel Luback, from his Structured Asset Services email address, stating that " The chances of approval are very good almost certain but I don't want to jinx it. Rhett (Wadsworth) can give you some more money but we would have to send it to the Florida address or if you opened a bank account in Florida that will work also. Also please please get that birth certificate because we need a Florida ID/Drivers License before this is all said and done"
- On or about November 25, 2014 123 Lump Sum sends Fed Ex package to Lape in New York with insurance documents to be signed and returned to 123 Lump Sum.
- December 1, 2014 12:44pm , Mel Luback told Philip Lape by email, from his Structured Asset Services email address, that 123 LumpSum's attorney "will not sign off with a New York bank or New York address. Doing so will only raise questions with the insurance company and possibly object the transfer which we don't want"
- December 5, 2014 12:00pm Mel Luback, again from his Structured Asset Services email address told Lape that Andrew Cummings would be representing him at the hearing in Florida. It was a lie. He was in fact representing 123 LumpSum not Philip Lape.
- 123 LumpSum told Lape that he needed to return to Florida to get obtain a Florida ID and open an account with Wells Fargo. Lape drives back to At the instruction of Luback.
- The first petition in Charlotte County Circuit Court 14002769CA was approved in December 2014. Lape did not appear at the hearing before Judge Donald Mason in Charlotte County because he was at home in Rochester, New York. Plaintiffs contend that the 2014 Petition was fraudulent because 123 Lump Sum knew Lape lived in New York not Florida.
- IRONY! April 14, 2015, 123 Lump Sum publishes a blog "Don't be Fooled by Structured Settlement Scams"
- June 1, 2015 123 Lump Sum d/b/a Cutler Pines files another allegedly fraudulent petition in Charlotte County to buy $1,002,072.35 in future payments for a lump sum of $200,000. Since Lape no longer had a fake lease agreement, 123 Lump Sum used an address belonging to Lape's father. No one would ever know that he did not live since he now had a Florida ID from the previous fraudulent transaction. Plaintiff contend that the Charlotte Court lacked subject matter jurisdiction given that at all times relevant Lape was domiciled in the State of New York.
- June 16, 2015, 123 Lump Sum sent a paramedical examiner to Lape's home in Rochester, New York to conduct an exam for a life insurance policy.
- June 29, 2015 Charlotte judge approved second alleged fraudulent transaction.
Pay attention attorneys representing insurance companies and investors in scam labeled "secondary market annuities". Cases that are forum shopped may lead to legal challenges down the road like this one and as a result will incur additional expense that will drive down or turn a positive return into a negative one.
A Pattern and Practice?
When deals go South, literally, and the annuitant wants to take legal action against the factoring company, their convenient defense is that the annuitant was complicit in the fraud (the fraud they were induced to commit by unlicensed and unregulated salespeople). Other favored destinations have included Portsmouth Virginia and apparently in recent years Connecticut.
The Structured Asset Services emails speak for themselves. How many gullible New Yorkers have been lured to Florida by 123 Lump Sum and other structured settlement factoring companies during this time frame before Florida Structured Settlement Protection Act was reformed? Lape wasn't the only one.
The Terrence Taylor lawsuit against the same defendant and a related entity in Portsmouth Virginia contains allegations of forum shopping as well (from West Virginia to Virginia).
Ironically, 6 months after the aforementioned "Lape Caper", 123 Lump Sum posted in the Latest News section of its website a blog titled "Don’t Be Fooled by Structured Settlement Scams"
Where Are They Now?
Mel Luback and Rhett Wadsworth are now with WePayMoreFunding.