by Structured Settlement Watchdog
In November 2024, while unwitting victims of the SuttonPark Nightmare first faced the stark reality of life impacting really late payments and an information void, an article appeared concerning an investment made by 777 Partners in La Liga football club, Sevilla New investigation against 777 partners for money laundering – Pledge Times.
A legal complaint filed against 777 Partners framed its operation as a Hobson's choice between a "shell game" and an "outright Ponzi"
See my May 8, 2024 blog Lawsuit Claims 777 Partners "Operating Giant Shell Game At Best and Outright Ponzi At Worst" - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews
Consistent with my mission as Structured Settlement Watchdog to help provide consumers and stakeholders with the clearest path to accurate information about structured settlements, I continue to help "connect the dots" to help fill the information void and to provide my take on what has been happening, for the victims of the SuttonPark Nightmare. Allegations in an Amended Complaint filed in September 2024 may be helpful to sharpen the picture.
September 2024 Leadenhall Partners Amended Complaint v 777 Partners, SuttonPark entities et al.
Excerpts of Allegations
"This action concerns a years-long pattern of fraud perpetrated on the lenders of hundreds of millions of dollars of debt by a group of entities operating under the domination and control of Defendants Josh Wander, Steven Pasko, and Kenneth King".
"To induce Leadenhall to fund their operation, Wander, along with his group of alter ego entities, “pledged” over $350 million in assets as collateral to Leadenhall, knowing all along that the assets either did not exist, were not actually owned by Wander’s entities, or had already been pledged to another lender. Wander has already admitted to rampant and fundamental breaches of the parties’ agreements—the only question now is whether Leadenhall will be able to recover millions of dollars in damages from a house of cards on the brink of collapse".
"In March 2023, a third-party lender to 777 Partners called Credigy shared with Leadenhall a list of assets that 777 Partners had ostensibly pledged for the exclusive benefit of Credigy pursuant to a separate credit arrangement with 777 Partners.
11. By reviewing the list of assets pledged to Credigy, Leadenhall discovered that over 1,600 assets worth approximately $185 million, which 777 Partners had purportedly pledged to Leadenhall, had in fact been “double-pledged”—i.e., the same collateral had been pledged to both Credigy and Leadenhall".
16. "The entire scheme reached an inflection point in early 2024, when an employee of one of Wander’s companies that is a party to Leadenhall’s LSA disclosed to Leadenhall that, in an attempt to prevent Leadenhall from confirming that collateral had been double-pledged, Wander-affiliated borrowers had submitted forged financial statements to Leadenhall following Leadenhall’s receipt of the anonymous tip. Wander’s employee also disclosed that, prior to on-site meetings between Leadenhall and 777 Partners’ personnel in November 2022, 777 Partners had altered internal records to try to cover up the double-pledge of collateral. The insider also disclosed that the boundaries between A-CAP and 777 Partners did not really exist at all—specifically, A-CAP had dictated an express agreement with 777 Partners granting A-CAP the right to control all facets of 777 Partners’ operations".
46. "(Josh Wander) "Wander, through his trade name 777 Partners and its subsidiaries and affiliates, invests in, among other things, various forms of “receivables.” Relevant to this action, those receivables include future cash flows from so-called “structured settlements” and lottery winnings. A “structured settlement” allows an injured plaintiff, typically in a personal injury suit, to receive a settlement or damages award over time in periodic payments rather than as a lump-sum payment".
47. "This form of investment business runs on buying future cash flows from injured parties or lottery winners who are entitled to large amounts of money over a long period of time, but who need more money in the near term than those cash flows permit, and who are thus willing to sell their future cash flows for a lump sum that is a percentage of the present value".
48. "Wander uses the profits from this business both to purchase additional receivables and to infuse capital into other ventures, including Wander’s interests in professional football*. Leadenhall also learned more about the causes of the double-pledge and failure to own Collateral. Beginning in 2021, Wander and 777 Partners considered purchasing a portfolio
of assets valued at approximately $250 million from JG Wentworth, a financial services company well known for purchasing structured settlements and lottery annuity payments in exchange for lump-sum cash settlements (and renowned for the tagline, “It’s my money, and I need it now!”)."
_________________________________
*Leadenhall Partners is a British company based in London. Reference to football=soccer, for American readers
_______________________________
152. SuttonPark Capital conducted due diligence of the JG Wentworth portfolio and specifically insisted on receiving a “data tape” from JG Wentworth that listed the portfolio’s structured settlement and lottery annuity receivables by unique identifier and calculated the net present value of each asset by their discounted cash flow.
153. "But before SuttonPark Capital acquired the JG Wentworth portfolio of assets, Wander directed Bennett, Adnani, and the Capital Markets group to use the JG Wentworth data tape to list JG Wentworth’s assets as collateral for 777’s lenders, including Leadenhall and Trinity Life (which later executed an agreement with 777 Partners by which 777 Partners would acquire Trinity Life, though the transaction was never consummated)".
154. "Of course, because the assets had not been properly acquired by SuttonPark Capital, SuttonPark Capital did not own the “Collections” from those assets to pass onto Leadenhall. Servicing Agreements § 3.1 (requiring Servicers to deposit “Collections” into Leadenhall’s accounts, defined to include “(all cash payments (including Settlement Payments and Scheduled Net Lottery Payments, if any) or proceeds of such Receivable, whether in the form of cash, checks, wire transfers, electronic transfers or any other form of cash payment.”). To conceal that SuttonPark Capital did not actually own the assets it had pledged, the Capital Markets group “topped up” Leadenhall’s collection account with other funds to make it appear as though the cash flows were incoming".
173. In the monthly Compliance Report issued to Leadenhall as of September 30, 2021, however, and thereafter, asset 69039 continued to show as being pledged by the SuttonPark Borrower exclusively to Leadenhall: Excerpt from September 2021 SuttonPark Borrower Compliance Report:
File No File Name Portfolio Name Case Type Discount Rate PV
69039 109068 SPLCSS II STRUCTURED SETTLEMENTS 3.83% $45,143.79
174. That 777 Partners deliberately altered financial records to conceal the true state of Leadenhall’s collateral is proof that the deficiency was not a “mistake” but a series of recurring, carefully orchestrated acts of fraud
Download Amended Complaint Leadenhall v 777 Partners et al 9-6-2024 Doc. 187
LEADENHALL CAPITAL PARTNERS LLP AND LEADENHALL LIFE INSURANCE LINKED INVESTMENTS FUND PLC,
Plaintiffs,
vs.
JOSH WANDER, STEVEN PASKO, KENNETH KING, 777 PARTNERS LLC, 600 PARTNERS LLC, SPLCSS III LLC, SIGNAL
SML 4 LLC, INSURETY AGENCY SERVICES LLC, DORCHESTER RECEIVABLES II LLC, SUTTONPARK CAPITAL LLC,
SIGNAL MEDICAL RECEIVABLES LLC, INSURETY CAPITAL LLC, SUTTONPARK SERVICING LLC, and ADVANTAGE
CAPITAL HOLDINGS LLC,
Defendants.
United States District Court Southern District of New York Civil Action No.1:24-cv-03453-JGK
Don't Forget the Pawns in the Dirty Game Exposed by the Leadenhall Partners' and ING Capital Lawsuits
So in addition to the hundreds of millions of dollars at stake for Leadenhall Partners in their lawsuit, the tens of millions at stake for ING Capital in another lawsuit filed in October 2024, there is the not so small matter of:
- the structured settlement payees who made partial sales of structured settlement payments and were forced into payment servicing arrangements, who had to endure severe payment delays for several months, and an intolerable information void;
- the small investors, many retirees pitched structured settlement receivables as investments in some cases mislabeled as annuities who sought dependable income and faced the same
The result of the dirty game that has been devastating to many, unaware of all the fiddling about going on, apparently for years. Financial regulations are designed to protect such classes. Why were there none to protect the unwitting pawns? I've purposely published victim impact stories so that the likes of Josh Wander and company can see the consequences of their actions.
What can be done now to protect these classes from another catastrophic failure? Are there disclosures that should be made up front? To the extent there are any, are they adequate? #CFPB #rohitchopra #attorneygenerals
Reading
Selling A Structured Settlement in 2025? Get The 411 on Cash Now. Don't Be a Victim 4structures' has added the SuttonPark Nightmare into a beacon of information for would be sellers.
Comments and Trackback Policy