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

Access Funding's Boghosian and Lawyers Charles E Smith and Anuj Sud Convicted of Theft Scheme

by Structured Settlement Watchdog

Slammer Time for Structured Settlement Factoring Schemers?

Maryland Attorney General Brian E. Frosh announced the convictions of former Access Funding Chief Operating Officer a lawyer and a now disbarred lawyer, for headline grabbing theft from 94 victims. 

The convictions of 43 year olds Raffi Michael Boghosian, lawyer Charles Edward Smith Jr, and disbarred lawyer Anuj Sud, relating to their involvement with the structured settlement factoring company Access Funding between 2013 and 2015. Each was found guilty of Theft Scheme Over $100,000 and Conspiracy to Commit Theft Scheme Over $100,000 after a trial in the Circuit Court for Baltimore City. Sentencing will be set in Baltimore City Circuit Court. 

The shenanigans of Access Funding and the three amigos was aptly chronicled by Terrence McCoy in the Washington Post in 2015. They were in a world of poop. Lawsuits by the victims, the Maryland AG and the Consumer Finance Protection Bureau (CFPB) ensued.

Access Funding’s offices and principal place of business were located in Montgomery County. The charges relate to Access Funding’s acquisition of structured settlement payment rights belonging to 94 individuals, primarily lead poisoning victims in Baltimore City. Many victims were people of color. The payment rights had a total present value of over $21million. In exchange for the payment rights, Access Funding gave the owners cash lump sums totaling less than $7 million, and in some cases as little as 8 cents on the dollar of the payments’ discounted present value.

“These individuals preyed upon vulnerable victims of lead paint poisoning in Baltimore City,” said Attorney General Frosh in a press release. “The victims received a small fraction of the actual value of their structured settlements, depriving them of a much-needed lifeline meant to support them long term.”

Boghosian was an executive and ultimately the Chief Operating Officer of Access Funding. According to his Linkedin profile at time of posting Boghosian is the  Executive Vice-President of Reliance Funding, an entity that arose from the burning embers of Access Funding. Smith was Boghosian’s best friend and an attorney who purported to provide independent advice to every customer of Access Funding in Maryland for almost a two-year period. Sud was Access Funding’s attorney who filed petitions in court to obtain court orders transferring the victim’s structured settelment p ayment rights.

"Boghosian, Smith, and Sud prevented the 94 owners of structured settlement payment rights from receiving the independent professional advice without which transfers of structured settlement payment rights cannot occur.

Smith pretended to provide the required independent advice when in fact he was secretly receiving kickbacks through Sud when Access Funding successfully obtained Smith’s clients’ payment rights. The defendants also made or caused to be made false statements to the court regarding the owners’ receipt of independent professional advice to induce the issuance of court orders transferring the owners’ payment rights" said Frosh.

Raffi Boghosian criminal case Circuit Court of Maryland           121354004

Anuj  Sud criminal case Circuit Court of Maryland                121354002 

Charles E Smith Jr criminal case Circuit Court of Maryland      121354003

 

Related Posts

CFPB Press Release Regarding Stipulated Financial Judgment Against Charles E. Smith 11-2021

CFPB Stipulated Financial Judgment Against Access Funding 12-2021

Journalist Wins Award of Distinction For Exposing Baltimore Structured Settlement Cash Now Fraud - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

How Maryland Structured Settlement Protection Act Failed Mary Alice Rose - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

Maryland Class Action Slams Structured Settlement Buyers and Lawyers Who Victimized Baltimore City Blacks - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

Former Maryland liquor board commissioner sentenced in bribery scheme - The Washington Post (relates to Anuj Sud being disbarred in 2018)

 

 

Structured Settlement IPA is A Necessity When Selling Structured Settlement

by John Darer® CLU ChFC MSSC RSP CLTC

Is independent professional advice REALLY on the table in Maryland as special interest groups huddle to discuss possible reforms to the Maryland Structured Settlement Protection statutes?

Maryland's structured settlement market has received unwanted attention after it emerged in April 2015, that Freddie Gray (yes THAT Freddie Gray), was in the process of selling his Allstate structured settlement to Peachtree,  just days before his death sparked the recent Baltimore riots.  Issues related to the legal action that gave rise to the structured settlement have been speculation for a possible theory of defense to those accused of causing his death.

Then a lawsuit with serious allegations against Derwood, MD lawyer Charles E. Smith, Jr. and CES Law Group, an irritating pock mark on the effectiveness of the State of Maryland's Structured Settlement Protection Statute.  Smith is being sued for legal malpractice arising out of his providing a questionable structured settlement IPA to Maryalice Rose, who is said to be a functional illiterate with cognitive deficits.  [ Read my June 27, 2015 post on Maryalice Rose v Charles E. Smith Jr et al ]

Some settlement purchasers argue that structured settlement IPAs, which cost between $500-$1,500, are an unfair tax on the seller and is something that is not encountered in other financial transactions such as opening a bank account, liquidating a bank account, buying a life insurance policy or buying or selling stocks, bonds or real estate. Proponents also see no need for court approval for the same reasons.  The flaw in their argument is that those industries are heavily regulated and  failure to adhere to the law could result in your losing your license, or in some cases some time in jail.  As you read this there is no license required  to work in the structured settlement secondary market AND there is no regulator in any state! Moreover, in many cases the structure is all these people have!

What is needed in Maryland and other states, in my opinion, is the following:

• Mandatory court appearances for sellers
• Filing only in jurisdiction where seller resides.
• Must show proof of having resided in state for 6 months  (acceptable proof standard e.g. electric bills,  auto registration, where children go to school}
• Certified information about prior transfers to accompany petition to transfer submitted for court approval.
• Mandatory independent professional advice [already in place, leave it alone]
• Standards for independent professional advice

And another thing, the cost of independent professional advice is a rough dollar equivalent of the kick backs and swag offered by settlement purchasers. For instance, what is the going rate for a free IPAD?

Here's what Master Funky Chicken, an online rapper with apparent keen interest in structured settlements, has to say in his Independent Professional Adviser Rap

 

 

Maryland IPA Lawsuit Seen By Some As Hurting Annuitants | Say What?

by John Darer® CLU ChFC MSSC RSP CLTC

Some in the structured settlement secondary market fear that legal malpractice lawsuit against Derwood Maryland lawyer Charles E. Smith and CES Law Group LLC is bad for structured settlement annuitants.

Why would a lawsuit that effectively alleges that a lawyer didn't do his job properly and act in his client's best interest be bad for annuitants?  It seems counter-intuitive. The fear, as expressed to me by one industry participant, is that the lawsuit may make those who provide IPAs skittish and hesitant to provide independent professional advice.  Interesting from members of an industry sub-culture in which some bad actors sometimes suggest to unsophisticated sellers that an IPA will delay the process. Is $500-$1,500 a pop, fair compensation for the potential exposure? Is it worth the risk, some may ask.  If some charge more to cover the exposure,  in some states it comes out of the hide of the annuitant.  Those IPAs who are sharp enough to have errors and omissions coverage may see rate increases as insurers analyze the exposure.

But what is that saying?  Should we overlook advisor mediocrity when it comes advice given to the cognitively impaired, the elderly, the disabled or the naive?

Many settlement purchasers showcase real or imagined magnanimity as if they are super-heroes. If Robin was just some schlub how good would Batman really be?

It's bad enough that settlement purchasers have been the subject of allegations in other recent lawsuits, in multiple states, which charge that the representatives of the structured settlement buyers coached the respective sellers to waive their statutory right to independent professional advice to create an expectation that the transaction would go quicker.

A Sub-Par IPA Hurts the Annuitant and Misleads the Judge

 Image: Dreamstime.com