Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

CrowFly Flies No More | Buffalo Structured Settlement Factoring Company Folds

by Structured Settlement Watchdog  (UPDATED August 26, 2022)

CrowFly, the John T. Bair principally owned structured settlement factoring origination and servicing company has played its swansong , the fat lady has sung and the curtain has come down, according to well placed sources. familiar with the situation. 

The demise of CrowFly came 4 months after a local media headline in Buffalo Business First " Fintech CrowFly hits another gear, tripling team and ramping up revenue" Buffalo Business First, Dan Miner Reporter  April 7, 2022. 

CrowFly only 4 months ago... Weird!

1. "The company’s revenue is up more than 400% annually the last two years and is in the process of nearly tripling its team to 15 employees. Co-founder Nita Bhatia was named CEO in late December (2021)"-Buffalo Business First
2. “We’re going to continue building out our org chart, which will help us continue our growth,” Bhatia said then. “We have only tapped a small portion of our potential market share and marketplace.”-Buffalo Business First
3. Huge estimated amount of daily budget in pay per click ads  

CrowFly has played its swan song

On August 25, 2022, the majority owner John T. Bair finally issued a statement "“After four years, and over a million in individual investment from me, achieving the goal of fundamentally changing the industry for the better became unviable,” Bair said"., in a post by Dan Miner of Buffalo Business First. It was unclear from the quote attribiuted to Bair if that " over a million" was before, or after, any fees earned on the sale of structured settlement payment rights from annuitants that Bair wrote while with Forge Consulting and Milestone Consulting? It's certainly reasonable to ask.

Question Of "Churning/ Attempted Churning" of Milestone and legacy Forge annuitants with structured settlement payments

CrowFly was billed as a "Fintech", part of a suite of companies in marketing materials, under the Milestone & Co umbrella  (formerly Seventh Amendment Holdings, LLC).  It really doesn't matter what they called it, there was an admission for anyone paying attention that CrowFly was a structured settlement factoring origination and servicing company.

For 4 years The Structured Settlement Watchdog, raised the natural question of whether CrowFly and other Bair associate entities targeted and mined Bair's primary market customers with structured settlement payments for structured settlement factoring.  Bair maintains however that CrowFly is a separate company despite the admission in a MIlestone Wealth's Form ADV Part 2 dated March 16, 2022 that Bair was the principal owner before the recent shuttering of the company. He also admitted in October 2018 using "we" from his Milestone email address that he was "the only primary market as well as secondary market origination firm that he knew of".

Carl Hunley Jr., a very talented artist, was commissioned to do a brand refresh for Seventh Amendment Holdings, LLC and various companies under its umbrella in 2020. As you can see from this March 28, 2020 posting on Behance, CrowFly was notably absent. I wonder why? CrowFly was in existence since 2017 and operating out of the same office.

Then came evidence found on the New York NECF IAPPS online court records system, a treasure trove of revelation.

• Our recent posts chronicle my findings. The New York court records show Seventh Amendment Holdings, LLC and United States Periodic Payment Assigment Company involvement as transferees in structured settlement transfers proposed to New York judges.  Seventh Amendment Holdings , which was renamed  Milestone & Co earlier this year, and USPPAC, are ongoing entities that participated in the factoring of John T. Bair written structured settlements.  No wonder Bair wanted a 3 year non compete and  a $100,000 liquidation of damages clause when I queried him about how he was going to manage conflict of interest in June 2018!  ( I didn't sign)
• My January 15, 2022 post discusses findings from a from New York court records search that reveal  numerous CrowFly transfer petitions, to add to the pile of petitions of the aformentioned Seventh Amendment Holdings, LLC and United States Periodic Payment Assignment Company,  the former name of holding company MIlestone & Co that was used as QSF admin and the latter a company used for qualified assignments. It would be reasonable for anyone, particularly lawyers referring cases, to question the level of "churning" of Bair written structures with all Bair related companies prior to and during CrowFly's existence. 
• What would be the result of research of court records in other states?  How many more cases would we find?  How much of the growth came from "churning" of Bair written structures?

Rising Interest Rates Hurt Factoring Companies With Thin Margins

Rising interest rates hurt structured settlement factoring originators like CrowFly. They cannot afford to get the pricing wrong on the originations, because if interest rates move up and they've priced too low to be competive, they may not be able to move the paper to investors. For example if CrowFly priced a deal at 4% and alternative investments are now paying greater than 4%, where is the room for CrowFly's margin and transaction costs?  Same thing goes for other companies. The situation grew dire for a number of firms when Sutton Park Capital, a funder of funders, reportedly turned off its funding spigot. A similar phenomenon occurred during the 2008-2009 financial crisis.  Then there were fewer splinter factions and small potatoes.

My condolences to CrowFly employees, some who find themselves out of work. It was only April 2022 when things were brimming with optimism and the company was hiring, growing to as many as 11 employees  (per Buffalo Business First]

CrowFly | It's a Bird USPTO! It's a Fintech Buffalo Business First! No, It's a "Financial Institution" Google

by Structured Settlement Watchdog

I guess crows don't like to be pigeonholed.

Can a company that has no licenses be considered a financial institution?  CrowFly LLC advertises on Google My Business that it is a Financial Institution.  Is CrowFly LLC a financial institution?  

CrowFly financial institution?  Retrieved 4-9-2022

According to the Code of Federal Regulations 31 CFR 1010.100(t), a financial institution defined as:

Each agent, agency, branch, or office within the United States of any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the capacities listed below:

(1) A bank (except bank credit card systems);

(2) A broker or dealer in securities;

(3) A money services business as defined in paragraph (ff) of this section

(4) A telegraph company;

(5)

(i) Casino. A casino or gambling casino that: Is duly licensed or authorized to do business as such in the United States, whether under the laws of a State or of a Territory or Insular Possession of the United States, or under the Indian Gaming Regulatory Act or other Federal, State, or tribal law or arrangement affecting Indian lands (including, without limitation, a casino operating on the assumption or under the view that no such authorization is required for casino operation on Indian lands); and has gross annual gaming revenue in excess of $1 million. The term includes the principal headquarters and every domestic branch or place of business of the casino.

(ii) For purposes of this paragraph (t)(5), “gross annual gaming revenue” means the gross gaming revenue received by a casino, during either the previous business year or the current business year of the casino. A casino or gambling casino which is a casino for purposes of this chapter solely because its gross annual gaming revenue exceeds $1,000,000 during its current business year, shall not be considered a casino for purposes of this chapter prior to the time in its current business year that its gross annual gaming revenue exceeds $1,000,000.

(iii) Any reference in this chapter, other than in this paragraph (t)(5) and in paragraph (t)(6) of this section, to a casino shall also include a reference to a card club, unless the provision in question contains specific language varying its application to card clubs or excluding card clubs from its application;

(6)

(i) Card club. A card club, gaming club, card room, gaming room, or similar gaming establishment that is duly licensed or authorized to do business as such in the United States, whether under the laws of a State, of a Territory or Insular Possession of the United States, or of a political subdivision of any of the foregoing, or under the Indian Gaming Regulatory Act or other Federal, State, or tribal law or arrangement affecting Indian lands (including, without limitation, an establishment operating on the assumption or under the view that no such authorization is required for operation on Indian lands for an establishment of such type), and that has gross annual gaming revenue in excess of $1,000,000. The term includes the principal headquarters and every domestic branch or place of business of the establishment. The term “casino,” as used in this chapter shall include a reference to “card club” to the extent provided in paragraph (t)(5)(iii) of this section.

(ii) For purposes of this paragraph (t)(6), “gross annual gaming revenue” means the gross revenue derived from or generated by customer gaming activity (whether in the form of per-game or per-table fees, however computed, rentals, or otherwise) and received by an establishment, during either the establishment's previous business year or its current business year. A card club that is a financial institution for purposes of this chapter solely because its gross annual revenue exceeds $1,000,000 during its current business year, shall not be considered a financial institution for purposes of this chapter prior to the time in its current business year when its gross annual revenue exceeds $1,000,000;

(7) A person subject to supervision by any state or Federal bank supervisory authority;

(8) A futures commission merchant;

(9) An introducing broker in commodities; or

(10) A mutual fund.

(ff) Money services business. A person wherever located doing business, whether or not on a regular basis or as an organized or licensed business concern, wholly or in substantial part within the United States, in one or more of the capacities listed in paragraphs (ff)(1) through (ff)(7) of this section. This includes but is not limited to maintenance of any agent, agency, branch, or office within the United States.

(1) Dealer in foreign exchange. A person that accepts the currency, or other monetary instruments, funds, or other instruments denominated in the currency, of one or more countries in exchange for the currency, or other monetary instruments, funds, or other instruments denominated in the currency, of one or more other countries in an amount greater than $1,000 for any other person on any day in one or more transactions, whether or not for same-day delivery.

(2) Check casher -

(i) In general. A person that accepts checks (as defined in the Uniform Commercial Code), or monetary instruments (as defined at § 1010.100(dd)(1)(ii), (iii), (iv), and (v)) in return for currency or a combination of currency and other monetary instruments or other instruments, in an amount greater than $1,000 for any person on any day in one or more transactions.

(ii) Facts and circumstances; Limitations. Whether a person is a check casher as described in this section is a matter of facts and circumstances. The term “check casher” shall not include:

(A) A person that sells prepaid access in exchange for a check (as defined in the Uniform Commercial Code), monetary instrument or other instrument;

(B) A person that solely accepts monetary instruments as payment for goods or services other than check cashing services;

(C) A person that engages in check cashing for the verified maker of the check who is a customer otherwise buying goods and services;

(D) A person that redeems its own checks; or

(E) A person that only holds a customer's check as collateral for repayment by the customer of a loan.

(3) Issuer or seller of traveler's checks or money orders. A person that

(i) Issues traveler's checks or money orders that are sold in an amount greater than $1,000 to any person on any day in one or more transactions; or

(ii) Sells traveler's checks or money orders in an amount greater than $1,000 to any person on any day in one or more transactions.

(4) Provider of prepaid access -

(i) In general. A provider of prepaid access is the participant within a prepaid program that agrees to serve as the principal conduit for access to information from its fellow program participants. The participants in each prepaid access program must determine a single participant within the prepaid program to serve as the provider of prepaid access.

(ii) Considerations for provider determination. In the absence of registration as the provider of prepaid access for a prepaid program by one of the participants in a prepaid access program, the provider of prepaid access is the person with principal oversight and control over the prepaid program. Which person exercises “principal oversight and control” is a matter of facts and circumstances. Activities that indicate “principal oversight and control” include:

(A) Organizing the prepaid program;

(B) Setting the terms and conditions of the prepaid program and determining that the terms have not been exceeded;

(C) Determining the other businesses that will participate in the prepaid program, which may include the issuing bank, the payment processor, or the distributor;

(D) Controlling or directing the appropriate party to initiate, freeze, or terminate prepaid access; and

(E) Engaging in activity that demonstrates oversight and control of the prepaid program.

(iii) Prepaid program. A prepaid program is an arrangement under which one or more persons acting together provide(s) prepaid access. However, an arrangement is not a prepaid program if:

(A) It provides closed loop prepaid access to funds not to exceed $2,000 maximum value that can be associated with a prepaid access device or vehicle on any day;

(B) It provides prepaid access solely to funds provided by a Federal, State, local, Territory and Insular Possession, or Tribal government agency;

(C) It provides prepaid access solely to funds from pre-tax flexible spending arrangements for health care and dependent care expenses, or from Health Reimbursement Arrangements (as defined in 26 U.S.C. 105(b) and 125) for health care expenses; or

(D)

(1) It provides prepaid access solely to:

(i) Employment benefits, incentives, wages or salaries; or

(ii) Funds not to exceed $1,000 maximum value and from which no more than $1,000 maximum value can be initially or subsequently loaded, used, or withdrawn on any day through a device or vehicle; and

(2) It does not permit:

(i) Funds or value to be transmitted internationally;

(ii) Transfers between or among users of prepaid access within a prepaid program; or

(iii) Loading additional funds or the value of funds from non-depository sources.

(5) Money transmitter -

(i) In general.

(A) A person that provides money transmission services. The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. “Any means” includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system; or

(B) Any other person engaged in the transfer of funds.

(ii) Facts and circumstances; Limitations. Whether a person is a money transmitter as described in this section is a matter of facts and circumstances. The term “money transmitter” shall not include a person that only:

(A) Provides the delivery, communication, or network access services used by a money transmitter to support money transmission services;

(B) Acts as a payment processor to facilitate the purchase of, or payment of a bill for, a good or service through a clearance and settlement system by agreement with the creditor or seller;

(C) Operates a clearance and settlement system or otherwise acts as an intermediary solely between BSA regulated institutions. This includes but is not limited to the Fedwire system, electronic funds transfer networks, certain registered clearing agencies regulated by the Securities and Exchange Commission (“SEC”), and derivatives clearing organizations, or other clearinghouse arrangements established by a financial agency or institution;

(D) Physically transports currency, other monetary instruments, other commercial paper, or other value that substitutes for currency as a person primarily engaged in such business, such as an armored car, from one person to the same person at another location or to an account belonging to the same person at a financial institution, provided that the person engaged in physical transportation has no more than a custodial interest in the currency, other monetary instruments, other commercial paper, or other value at any point during the transportation;

(E) Provides prepaid access; or

(F) Accepts and transmits funds only integral to the sale of goods or the provision of services, other than money transmission services, by the person who is accepting and transmitting the funds.

(6) U.S. Postal Service. The United States Postal Service, except with respect to the sale of postage or philatelic products.

(7) Seller of prepaid access. Any person that receives funds or the value of funds in exchange for an initial loading or subsequent loading of prepaid access if that person:

(i) Sells prepaid access offered under a prepaid program that can be used before verification of customer identification under § 1022.210(d)(1)(iv); or

(ii) Sells prepaid access (including closed loop prepaid access) to funds that exceed $10,000 to any person during any one day, and has not implemented policies and procedures reasonably adapted to prevent such a sale.

(8) Limitation. For the purposes of this section, the term “money services business” shall not include:

(i) A bank or foreign bank;

(ii) A person registered with, and functionally regulated or examined by, the SEC or the CFTC, or a foreign financial agency that engages in financial activities that, if conducted in the United States, would require the foreign financial agency to be registered with the SEC or CFTC; or

(iii) A natural person who engages in an activity identified in paragraphs (ff)(1) through (ff)(5) of this section on an infrequent basis and not for gain or profit.

 

 

 

 

CrowFly Positioned Factored Structured Settlements as Settlement Annuities to Solicit Investors

by Structured Settlement Watchdog

Factored structured settlement payments are not annuities or insurance products

So, what is the rationale for a factoring origination company co-founded and directed by a successful licensed insurance agent of more than 23 years, to have marketed and continue to market factored structured settlement payment streams (structured settlement receivables) as structured settlement annuities to investors?  Here is a CrowFly Google Ad that appeared on March 12, 2022:

 CrowFly falsely portayed structured settlment receiuables as annuities in this March 12, 2022 retrieved Google paid ad.

HOW STATE INSURANCE LAWS DEFINE ANNUITY

New York Department of Financial Services

An annuity is a contract between a purchaser and an insurance company in which the purchaser agrees to make a lump sum payment or series of payments in return for regular disbursements, beginning either immediately (within 12 months) or at some future date.

Maryland Insurance Administration

Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 09 LIFE INSURANCE AND ANNUITIES Chapter 12 Suitability in Annuity Transactions
.03 Definitions.
B. Terms Defined:
(1) “Annuity” means an annuity that is an insurance product under State law that is individually solicited, whether the product is classified as an individual or group annuity

NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC)

Buyer's Guide      " An annuity is a contract with an insurance company"

Statutory Issue Paper No. 160, finalized April 6, 2019 p 6 footnote 1

"This guidance is specific to acquired structured settlement income streams (legal right to receive future payments from a structured settlement) and does not capture accounting and reporting guidance for the acquisition of any insurance product (e.g., life settlement, annuities, etc.).

New Footnote 2: Reporting entities that hold qualifying structured settlement payment rights shall report the security on Schedule BA either as an “any other class of asset” or as a “fixed or variable interest rate investment with underlying characteristics of other fixed income instruments” if the structured settlement payment right qualifies for reporting within that reporting line (e.g., NAIC designation).

FINRA

An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. You buy an annuity either with a single payment or a series of payments called premiums.

Annuities are often products investors consider when they plan for retirement—so it pays to understand them. 

SEC

An annuity is a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future. You buy an annuity by making either a single payment or a series of payments. Similarly, your payout may come either as one lump-sum payment or as a series of payments over time.

HOW CROWFLY DEFINED ANNUITY

Cites Merriam-Webster "The dictionary definition of "Annuity", from Merriam Webster, is: “a sum of money payable yearly or at other regular intervals” June 16, 2020  CrowFly blog " What is an Annuity Anyway?"

_______________________________________________________________________

ProTip:  Don't rely on "Aunt Merriam's" definition of annuity for your state insurance exam, or your investment.  

And if you need further proof of why a question should be raised concerning their use of Aunt Merriam, simply look at this document retrieved from the New York Court system, among the sampling of cases where CrowFly factored structured settlement payments from a structured settlement placed by its co-Founder, Director and former CEO.  See Court Records Prove CrowFly Factored Structured Settlements Written by John Bair Structured Settlements 4Real blog 1/15/2022

This link  Download 89967_CROWFLY_LLC_V_ROBERT_DUNGAN_ET_AL_EXHIBIT_S__3. takes you to the qualified assignment executed when Robert Dungan's structured settlement was established. All you need to do is have a look at paragraph 4 to see that the annuitant has no ownership rights in the annuity. Paragraph 7 refers to " payment rights".  This is structured settlement factoring 101 folks.  

_______________________________________________________________________

"At their core, Annuities are all contracts providing for the payment of specific amounts of money in the future. A consumer deposits a specific amount of money with an insurance company (the price of the annuity). The insurance company then invests that money in safe, predictable investments like bonds that will support specifically defined payments back to the consumer, while providing enough excess earnings for processing overhead and profit (as an incentive for the insurance company)." June 16, 2020  CrowFly blog " What is an Annuity Anyway?"

_______________________________________________________________________

Pro Tip: What is the name of the payee on the check that CrowFly or any other buyer/seller of structured settlement payment rights asks you to write to pay for the investment?

________________________________________________________________________

"A note for buyers of structured settlement payment rights. CrowFly does not sell insurance products and should not be relied on for advice regarding tax implications of any products " Ibid.

_________________________________________________________________________

However, CrowFly's Co-Founder, Director and former CEO is a licensed insurance agent in all 50 states.  To wit "He frequently advises attorneys on the complexities of closing a settlement and is licensed in all 50 states"   Injury Board Directory Listing for John Bair, Milestone Consulting, co-Founder and Director of CrowFly, retrieved February 22, 2022.

CrowFly has said this in a published pitches to prospective investors in Structured Settlement Payment Rights

"Consider a discounted annuity from crowfly(dot)com, as the yields of 4% to 5% are attractive and are from some of the most highly rated insurers. Buying a secondary market annuity also helps out another person who is in need or has fallen on tough times. There is a strong social impact of buying an annuity from someone else.  " How to Buy an Annuity" April 20, 2020 Blog on Crowfly, LLC Legal Examiner. Bair is a Founder and Director of CrowFly, LLC 

"Structured settlement annuities have yields as high as five percent and are backed by insurance companies generally rated Superior (A+) or better. Risk profiles are aligned with—or sometimes better than—treasuries or other fixed-income assets."   Should an Annuity Be Part of Your Retirement Portfolio?  CrowFly Blog July 19, 2021

"Structured settlement annuities are especially attractive to individuals headed into retirement who are looking for a great yield. Through CrowFly, they also come with no sales commission, which means investors buy the asset directly. What you see is what you get on our platform".  Ibid.

"Historically, everyday investors did not have access to structured settlement payment streams available for purchase; those assets were only reserved for institutions. But CrowFly’s proprietary platform makes purchasing these assets possible for individuals as well. In addition, CrowFly aims to get both buyers and sellers the most money possible from the transaction by simplifying the transaction and reducing overhead costs".  Ibid.

Here CrowFly lists "sample annuities available for purchase"   Ibid.

"Taking some risk out of your portfolio after retirement makes sense. However, current interest rates make new annuities a tough sell. Structured settlement annuities are akin to high-yield instruments without as much risk". Ibid.

If you’re interested in joining ....platform and browsing structured settlement annuities available for purchase..."  Ibid.

In John T. Bair's March 12, 2020 published claim, with his Director of CrowFly, LLC factoring origination hat on, " Can Recycled Structured Settlement Annuities Replace U.S. Treasuries in Your Portfolio?", Bair recklessly claimed "These assets are life insurance products, guaranteed by the issuer, and in most states by the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA). Are these regulatory safety nets as good as Uncle Sam?"

Are we to assume that there is some special dispensation by the 50 states' insurance departments that to make it kosher to make that statement? That is if the states are even aware that such claims are being made?

In closing, neither CrowFly nor any other entity acting as an intermediary and/or selling structured settlement payment rights to investors should be representing the investment as an annuity because it is not. 

Postscript  March 18, 2022

Will this ongoing misrepresentation in the CrowFly Google ad sales pitch to investors catch up with CrowFly?  On March 18, 2022, CrowFly can again be seen soliciting investors with "Purchase Settlement Annuities" and "Want to buy a structured settlement annuity?" despite admitting that it has no insurance license. It goes further to call them "CrowFly structured settlements". So now they issue annuities? I believe that requires a license too. And, their ad says"its' a Buyer's Market".  Ironically the CrowFly misrepresentation appears above an ad for legitimate structured settlement annuities from MetLife, a company, which ironically contracts Milestone Consulting, a company with a common co-founder and director to CrowFly that operates out of the same address in Buffalo New York.

 

 

Do You Name a Structured Settlement Beneficiary Or Do Payments Get Inherited Through Your Will?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Should You Name a Structured Settlement Beneficiary With the Structured Settlement Annuity Issuer, or Should Payments Just Get Inherited Through Your Will?

Once again, I'm scratching my head at the output of the settlement purchasing company that is currently believed to be the only member of the National Association of Settlement Purchasers with a related entity that has agency relationships with structured settlement annuity issuers and brokers structured settlement annuities in the primary market. 

Structured settlement beneficiaries Name them, Confirm them and Repeat as Necessary

In the process of soliciting people to sell their structured settlement payments the New York company states in a blog:

"A loved one left you their future structured settlement payments in their will, and you’re wondering what you can do with it. Maybe you have a business opportunity, or you are interested in purchasing a house. You might be facing an emergency and looking at your options to cover that sudden expense. So, can you sell this asset? The short answer is yes. If you inherited a structured settlement, that means you now have the rights to it, and to the future payments. And in situations where you have a financial need, you most likely qualify to sell some or all of the future payments from the inheritance for a lump sum in cash" Source: CrowFly website

While someone could name a beneficiary of structured settlement payments in their will, it is certainly not the norm and probably not advantageous to do so

Here's why:

1. Naming a beneficiary with the structured settlement annuity issuer is easy and simple. You fill out a beneficiary designation form and you file it with the insurer, checking to confirm that your wishes have been recorded. Your signature may need to be notarized.
2. You can name and change primary and contingent beneficiaries and their respective shares/percentages at any time, as long as such changes are in writing and in the proper format accepted by the insurance company that issues the structured settlement annuity.
3. Naming a beneficiary with the structured settlement annuity issuer means that the proceeds will begin to flow directly to your beneficiaries without delays and costs associated with probating an estate. It's the matter of completing a claim form and providing a copy of the death certificate. 
4. Death proceeds that pass through the probate estate are subject to executor/executrix fees (if there is a will), administrator/administratrix fees (if there is no will)
5. Death proceeds that pass through the probate are subject to claims of creditors of the Estate. 

Where might you find future structured settlement payments going into an Estate?

• If you fail to name a beneficiary for your structured settlement, or the beneficiary you name is not living at the time of your death, and you have not named a contingent beneficiary, payments will default to your Estate.
• If the payments are going to a trust, such as Special Needs Trust or Supplemental Needs Trust, your structured settlement has a full commutation provision at death and there is an abundance of cash that exceeds the Medicaid payoff, payment will be distributed subject to terms of the trust. 
• A number of structured settlement annuity issuers, including Berkshire Hathaway Life Insurnace Company of Nebraska, First Berkshire Hathaway Life Insurance Company and Independent Life Insurance Company will allow a beneficiary designation that allows a partial commutation based on a notice of shortfall in the trust assets to satisfy amounts owed to Medicaid and/or Estate taxes. The balance would go to named beneficiary or beneficiaries, or the Estate (if no beneficiary has been named, or if a beneficiary has named, but no contingent beneficiary has been named at the time of the annuitant's death).
• If you are selling (or have sold) part of a lump sum structured settlement payment to a settlement purchaser such as CrowFly, and the annuity issuer will not split annuity payments, payments will be subject to a payment servicing arrangement. It's really important that anyone entering into a structured settlement factoring transaction where payments are being serviced and where the seller is only doing a partial sale, to name and confirm in writing both a primary and contingent beneficiary.

4structures.com LLC has a number of resources about the wisdom of naming a structured settlement beneficiary

Why It's Important to Name a Beneficiary on a Structured Settlement Annuity

Structured Settlement Beneficiary Designations| The Beneficiary Mantra

 

CrowFly's Astonishing Claim That It's the Only One That Works with Real People

by Structured Settlement Watchdog

In describing how it's structured settlement buyer network works, CrowFly, LLC of Buffalo NY, has made the astonishing claim in its blog that it is the only company that provides individual investors (described as real, everyday people) with access to purchase the rights to seller's future payments."

Here is the citation:

"We’re also the only company that provides individual investors (read: real, everyday people) with access to purchase the rights to sellers’ future payments. Other companies rely on big institutions to purchase them, but we saw there was an opportunity to empower people who are planning for retirement or working to build their portfolios to purchase structured settlement payments as an investment. More buyers = more competitive offers for sellers = you get more value for your future payments". 

When Reached For Comment..In Full Deadpan Crow...

When reached for comment, Ross Pearlstone of DCF Exchange's acerbic response was that DCF Exchange "provides real people with the access to purchase rights to seller's future payments", adding in full dead pan crow "but we have (on occasion) worked with farm animals and aliens and lately business has been rather brisk". 

DCF Exchange has been in business longer than CrowFly and it seems a silly claim for CrowFly to make given its co-Founder and Director John T. Bair's prior communication with an officer of DCF.  

A spring lamb crows Sly and the Family Stone

 

 

Individuals Don't Own Structured Settlement Annuities. You Can't Sell What You Don't Own

by Structured Settlement Watchdog

CrowFly, LLC of Buffalo claims that you can "purchase structured settlement annuities from individuals" (see below).  Now that would be a neat party trick!

Excerpt of CrowFly LLC Paid Google Ad 2/13/2022

Before you "invest in social good", consider that in the majority of cases, structured settlement annuities are purchased by a qualified assignment company or a non-qualified assignment company.

Structured settlement annuities are not owned by individuals

Individuals can't sell them and therefore you can't buy them from individuals. This is really basic Structured Settlements 101.  Here is the typical language found in settlement documents:

"Neither the Plaintiff, nor the Payee, nor anyone acting on Plaintiff's or Payee’s behalf: shall have any right of or incidence of ownership whatsoever in the annuity policy; shall have any right to accelerate or defer payments due from the Assignee; shall have any right to increase or decrease any payments due from the Assignee; shall have any other right of dominion or control of or over any annuity policy, which shall be owned exclusively by the Assignee.  

Acquired Structured Settlement Payment Rights (Structured Settlement Receivables) are an Annuity or Insurance Product

The National Association of Insurance Commissioners has expressly stated in Statutory Issue Paper No. 160 (issued April 6, 2019) that acquired structured settlement payment rights are not an annuity or an insurance product (i.e., you're not buying an annuity). 

So why would CrowFly pay to advertise that you can purchase structured settlement annuities directly from individuals when you can't?

 

 

 

Berkshire Hathaway Structured Settlement Hardship Exchange Program in Action

by Structured Settlement Watchdog

CrowFly, LLC has claimed that its "proprietary platform removes the middleman from the selling process, so you can get the most money from selling your structured settlement payments". A noble goal, but it doesn't always work out that way.

On September 24, 2021, CrowFly submitted a structured settlement transfer Petition to New York Supreme Court in Oneida County for a proposed transfer of the structured settlement payment rights of Lee Watkins, Jr.  The structured settlement was established December 13, 2012. An annuity purchased from First Berkshire Hathaway Life to fund a periodic payment obligation arising from as part of a settlement with a State Farm insured. The 2021 CrowFly petition bore a 9.29% discount rate.

In the Matter of the Petition of CROWFLY, LLC for the Approval of Transfer of Structured Settlement Payment Rights 
in Accordance with GOL §5-1701, Petitioner, -against- LEE WATKINS, JR., BHG STRUCTURED SETTLEMENTS, INC., A MISSOURI CORPORATION and FIRST BERKSHIRE HATHAWAY LIFE INSURANCE COMPANY, Respondents Index No.: EFCA2021-002332

Berkshire Hathaway intervened, and the Court denied CrowFly's petition.  Their affidavit is educational. 

Here is an excerpt:

"BIFCO prefers to only purchase the fewest future payments, or smallest portions thereof, adequate to provide the payee with enough money to alleviate his or her stated hardship. In many cases, this leaves the payee with payments, or portions thereof, left over for his or her support that would otherwise have been sold and transferred away through an alternative transaction with another third-party factor. BIFCO can also discuss other scenarios with the payee to meet his or her needs.

By way of comparison in the instant Transfer Case, if Mr. Watkins has a demonstrable need for 21,000.00, and submits a satisfactory application with evidence of a hardship, a BIFCO hardship exchange transfer under the terms described above could provide him with an immediate payment of approximately $21,000.00 through BIFCO's purchase of 85 future payments of $316.80 escalating 3% annually (as opposed to 85 payments of $350.00 escalating 3% annually that Crowfly intends to purchase). BIFCO could also discuss other options with Mr. Watkins.

According to BHG and FBHL's records, Mr. Watkins contacted FBHL in November 2020, and discussed the BIFCO Hardship Exchange Program. Mr. Watkins indicated that he needed $15,000.00 to get his own apartment. BIFCO mailed a Hardship Exchange Program application to him on November 19, 2020, but it was returned incomplete. As of the date hereof, BIFCO has not received a completed application from him. If CrowFly were to offer Mr. Watkins comparable terms in the instant matter, BHG and FBHL would not object to the proposed transfer on the basis of its terms. By describing BIFCO's Hardship Exchange Program, BHG and FBHL wish to assist the Court by providing information that may be helpful in making its "best interests" determination and, specifically, to advise the Court that Crowfly's proposed discount rate is higher than Mr. Watkins might be charged in a different transaction. None of BHG, FBHL or BIFCO intends to profit from any transaction entered into with Mr. Watkins pursuant to the Hardship Exchange Program. The applied discount rate and administrative charge are calculated and set with the intention of offsetting costs and/or potential losses to BIFCO associated with hardship

Irony

Ironic that the founder and former CEO of Milestone Consulting and co-founder and former CEO of CrowFly, LLC had this to say on March 5, 2018:

"Berkshire Hathaway appears to be doing something about it.  They are running a pilot program in about 10 states where they are providing education and information to the annuitants that hold their paper.  This is a good start.  They are buying their own paper back at 6.5 percent and 7 percent discount rates. A very good deal for Warren Buffett, and a source of competition for market makers JG Wentworth" John T. Bair " Evolution of the Structured Settlement Industry" Milestone Legal Examiner.

The Obvious Question

The obvious question is if CrowFly had knowledge of this, why did CrowFly come in at a 9.29% discount rate on Lee Watkins?  It sure would be interesting to learn if Bair/Milestone placed the Watkins structured settlement annuity with First Berkshire Hathaway in December 2012.

The Question that Begs

Given what surfaced from my research as set forth in the immediately prior post, one can't help wondering whether Lee Watkins Jr's First Berkshire Hathaway structure, was another structured settlement written by Bair/Milestone and attempted to be factored by CrowFly?

Related Reading About Berkshire Hathaway Hardship Exhange

A prior blog that discusses how Berkshire bested a Peachtree rate

Peachtree Settlement Funding's Transfer Petition Discount Rate is 2% Above Berkshire Hathaway July 23, 2020

CrowFly Now Targets Repeat Sales of Structured Settlement Payments Through Injury Board Spinoff

by Structured Settlement Watchdog

Under the guise of "structured settlement news", an October 19, 2020 post by Milestone CEO and CrowFly DirectorJohn Bair, using the Legal Examiner spinoff from Injury Board as a non-lawyer, promotes further sales of structured settlement payments using the image of an African American family. Today, with this example, together with my June 2018 observation about enuities.com (a precursor to CrowFly), it's remarkable that people of color are Bair/CrowFly's target image, when the well documented and ongoing predatory behavior of the structured settlement secondary market is color blind.

Bair, through his associated companies,  uniquely retains all of his structured settlement general agency appointments* with Milestone Consulting, despite repeatedly trashing structured settlements through various social media, including the Injury Board spinoff, and through his structured settlement factoring origination firm CrowFly*, heavily promoting structured settlement factoring, now for repeat sales.  On April 20, 2020, Bair sent an email blast from Milestone to "eliminate annuities from client portfolios and settlement plans"

In previous posts we've drawn attention to the inherent conflict of interest that exists between a series of entities (literally under one roof), that solicit pre-settlement cash advances, structured settlement annuities, the factoring and refactoring of structured settlement payment streams.

According to an analytics program, CrowFly's estimated daily paid ad word spend has been over $2,000. Top key words bought for the period ending July 1, 2020 were versions of JG Wentworth. Both Milestone and CrowFly share the same office space in Buffalo New York at 737 Main Street.  In spite of being at times promoted as a FinTech firm, in October 2018 using his Milestone Consulting email, Bair bragged that his was the only structured settlement primary as well as structured settlement factoring origination firm that he knew of.

* Upon information and belief Milestone is not contracted with USAA Life, American General or United States Life.

 

 

 

Factoring Origination Firm Co-Founded by Milestone CEO is Soliciting the Structured Settlement Industry

by Structured Settlement Watchdog

CrowFly, LLC has moved on from email blasting lawyers to email blasting the structured settlement industry in a letter many received in the past few days from co-founder and CEO Tony Barnes. Barnes co-founded CrowFly, LLC along with its former CEO and current Director John Bair, the CEO of Milestone Consulting and Seventh Amendment Holdings, LLC  and COO Nita Bhatia.

The solicitation goes like this

"Tired of hearing that your clients have factored payments at 10%, 15%, or even 20% discount rates? Thousands of individuals make this decision every year despite distrusted industry players and elevated discount rates.

"CrowFly(dot)com was created to help solve this problem. We can't stop people from the urge to get money in their hands now rather than later. But we can educate them on how much those payments can really garner and provide a better outcome in the case that they need the funds. 

Barnes says the "service connects an expanding group of qualified buyers to those who already wish to sell". The results they claim are easy to see. Industry norms for factoring transactions were recently stated as 7% - 18%. Barnes states that CrowFly is averaging 6% (discount rate) this year. Recently being able to go as low as 4% for one transaction.

"At CrowFly says Barnes, we understand that selling the rights to structured settlement payments is not the right thing for everyone".  Which makes it all the more interesting that its co-Founder and former CEO John T. Bair sent a Milestone email blast to on April 20, 2020 to get out of annuities and continues to beg the obvious question. Is Milestone providing information about its client lists to CrowFly to solicit those annuitants to sell their structured settlement payments?

Barnes continues "Investors using our service also know that earning even close to 4% on payments from A++ rated insurers is a good thing. You see that everyday when trying to find the best pricing for your clients' settlement annuities". 

Barnes asks "Tell me how we can do better".  Here you go "Barney"!

___________________________________________________________________________________

SIDE BAR

• This is total BS. The client's settlement annuities are not for sale.  The annuity remains with the qualified assignment company and only the rights can be purchased in a structured settlement transfer.

• The only current A++ rated insurers are New York Life, Berkshire Hathaway and USAA. And former structured settlement annuity issuers, Mass Mutual. The majority of deals are likely not from these insurers.

• The 7%-18% is a range from the website of the National Association of Settlement Purchasers.  In my observation NASP members will pay much less than that, especially when in competition.

___________________________________________________________________________________

Need for More Transparency About Seventh Amendment Holdings, Milestone and CrowFly

John T. Bair has written several blog posts on behalf of Milestone Consulting, LLC and Crowfly, LLC questioning the relevancy of structured settlements Milestone Consulting has communicated to trial lawyers to eliminate annuities from their client portfolios and settlement plans on April 20, 2020. Milestone and CrowFly, LLC operate out of the same address, 737 Main Street, Suite 100 in Buffalo, New York. John T. Bair put in writing in an October 3, 2018 communication, from his Milestone Consulting email to a third party in the secondary market, that he is "the only primary market and secondary market origination firm that he knew of".

The Consumer Financial Protection Bureau defines origination as "any service involved in the creation of a federally related mortgage loan, including but not limited to the taking of the loan application, loan processing, the underwriting and funding of the loan, and the processing and administrative services required to perform these functions.  Origination is something different than simply a fintech platform.

Reasonable Questions

1. Has Milestone Consulting, LLC, or any of its employees, provided its list of structured settlement annuitants, or any of their protected information to Crowfly, LLC?  
2. Has CrowFly approached an annuitant, or shopped their structured settlement payments rights, placed by its Director and Co-Founder and Primary Blogger John T. Bair, through Milestone Consulting in the last 5 years?  Has there been any attempt by John T. Bair directly, or indirectly through any entities that he owns or is a director of, soliciting, or facilitating the solicitation of any annuitants he solicited and placed into structured settlement annuities through Milestone Consulting, Forge Consulting, or EPS Settlements and making any profit on those deals?  UPDATE!  We now know the answer to that question is yes thanks to New York Court records, which show that United States Periodic Payment Assignment Company (USPPAC) was used to buy structured settlement payment rights from Jerry E. Sherman, a 65 year old from Grand Island New York, a former client of Buffalo law firm Paul William Beltz PC, for pennies on the dollar in April 2017, less than two years after the structured settlement annuity was issued by John Hancock Life Insurance Company and Milestone Consulting made approximately $23,800 in commissions on the $600,000 allocated to the structure
3. Does John Bair's origination activities, as characterized in the October 3, 2018 email go exclusively through the CrowFly platform or by some other means?  
4. What profits is any entity associated with John T. Bair taking (1) on the factoring of structured settlement payment rights (2) on the assignment of the rights to an investor or investors?

In June 2018, Nita Bhatia returned a call from 716-883-1833, a number with a Milestone caller ID and known to me as one used with by Bair in his structured settlement insurance agency) to my call that I made to an entirely different number that appeared contemporaneously on a website called Enuities.com (which included a claims "to beat JG Wentworth by 50%".  Bhatia told me Structured Settlement Exchange was owned by one of Bair's/Milestone's upstream holding companies.

Who Owns Crowfly, LLC?

We know that there are three co-founders  Bair, Barnes and Bhattia. 

Seventh Amendment Holdings, LLC applies for Trademark for What Would Later Be CrowFly, LLC

In June 2017, Seventh Amendment Holdings, LLC, for which John T, Bair is CEO, submitted an application to the United States Patent and Trademark Office (USPTO) in an attempt to trademark "Structured Settlement Exchange". Download Seventh Amendment Holdings LLC attempt to Trademark Structured Settlement Exchange. The application was initially rejected by the USPTO for descriptiveness (i.e. cannot trademark descriptive) . Seventh Amendment Holdings, LLC, the holding company for Milestone Consulting, appealed.   Structured Settlement Exchange was changed to CrowFly in the 4th quarter of 2018.  John Bair's bio on Milestone Consulting's website states "He is the Founder and CEO of Seventh Amendment Holdings, a company that provides comprehensive, plaintiff-focused settlement planning and management through its subsidiary companies, specifically Milestone Consulting and Monolith Advisors". and serves as Qualified Settlement Funding Administrator according to a September 15, 2014 blog  ("one of our holding companies Seventh Amendment Holdings frequently serves as Fund Administrator")  and according to the Buffalo News, Seventh Amendment Holdings, LLC owns land at 130 Depew Ave in Buffalo, acquired in the Fall of 2019. The undeveloped lot next to the residence of the Milestone Consulting and Seventh Amendment Holdings, LLC CEO, still shows a for sale sign.

Upon information and belief CrowFly has a more than $1,600/day Adword (pay per click) budget.

Where's Waldo? CrowFly episode

Seventh Amendment Holdings, a company that provides comprehensive, plaintiff-focused settlement planning and management through its subsidiary companies, specifically Milestone Consulting and Monolith Advisors is how John Bair's bio reads on the Milestone Consulting website.

According to Carl Hunley, who "received an opportunity to work with John Bair to rebrand his company Seventh Amendment Holdings, LLC" and created a design around a timeline that used the size and color of spaces in the timeline "in order to represent each of the FIVE subsidiaries under the Seventh Amendment Umbrella"  (Milestone, Monolith, Bairs Foundation and two assignment companies United States Periodic Payment Assignment Company  (USPPAC) and Global Periodic Payment assignment Company (GPPAC). No mention is made of CrowFly, although to be fair, CrowFly became Crowfly in October 2018 with the name change from Structured Settlement Exchange. It is not clear when this " Refreshing the Brand" took place.    But again, Seventh Amendment Holdings sought the trademark application and per the USPTO TESS database is currently is the owner of the  word mark " structured settlement exchange" as defined in the resulting registration.

 

Screenshot of Seventh Amendment Holdings graphic on Hunley website as it appeared on 7-24-2020

The Optics

What I wrote in June 2018 about the optics still rings true. in my opinion.  The idea of an exchange or marketplace is not a bad one. However, despite what I'm sure were good intentions, common controls and/or ownership and operation with an individual or entity that owns at least 5 companies with a "spaghetti junction" of potential conflicts of interest.  How is that being managed? The answer should not require an attempt to secure an NDA,  multi-year non compete and $100,000 liquidated damages clause. This needs to be transparent.

1.Structured settlement and insurance general agency and secondary market origination firm (Bair's admission in October 3, 2018 email). If Seventh Amendment Holdings, LLC owns Crowfly, LLC then that should be clear,

2. Seventh Amendment Holdings is Qualified Settlement Fund Administrator is the entity that owns a qualified assignment company. 

It cannot be disputed that Milestone and its CEO are big proponents of QSF's. Its holding company, Seventh Amendment Holdings,LLC is a frequent administrator as admitted by Bair in several writings.

To the extent that any of the Seventh Amendment Holdings assignment companies are used , or have been used for qualified assignments from where Seventh Amendment Holding is the QSF Adminstrator, how is this potential Rev-Proc 93-34 Section 4 conflict being managed?  UPDATE!  It has since been discovered through New York Court records that June 15, 2015 Seventh Amendment Holdings submitted a structured settlement transfer petition on an annuitant that Bair placed while he was CEO of Forge Consulting

(4) the assignee is not related to the transferor (or transferors) to the designated or qualified settlement fund within the meaning of sections 267(b) or 707(b)(1); and
(5) the assignee is neither controlled by, nor controls, directly or indirectly, the designated or qualified settlement fund. For purposes of this section 4.01(5), examples of control include an assignee that is a corporation the stock of which is owned by the fund or an assignee that is a trust the trustee of which is the administrator of the fund

The marketing of factored structured settlement payment streams to investors in concurrent fashion, raises an eyebrow, in my opinion. To be fair, in my opinion, Bair should divest his interest in Milestone and go into the factoring business full-time, or relinquish CrowFly. 

Seventh Amendment Holdings, LLC was renamed MIlestone & Co, LLC effective April 1, 2022.  John Thodore Bair (John T. Bair) is the President & Chief Compliance Officer and  Primary Owner per the Milestone Wealth Form ADV Part 2 submitted March 16, 2022

Postscript

Buffalo Inno - Buffalo startup CrowFly shuttered by its principals after five years (bizjournals.com)

 

 

 

 

 

 

 

 

 

CrowFly, LLC Clarifies and NOW States the Truth About Co-Founder

by Structured Settlement Watchdog

Does a crow poop in the woods?  No silly, you're talking Bear, and that's something completely different. Like these excerpts from the CrowFly, LLC e-book...

Last Week  "John Bair John is a veteran of the structured settlement industry. John is a former board member of the National Trade Association"

This Week   "John Bair John is a former member of the National Structured Settlements Trade Association"

 Now that's something entirely different isn't it?

via GIPHY

Note:  Highlights added to demonstrate how CrowFly, LLC outright lied about Bair, it's co-founder and Chief of its Board of Directors.