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

Annuitant Negotiates 30% More AFTER MD IPA Signs Off on Worse Structured Settlement Factoring Deal

by Structured Settlement Watchdog

Maryland structured settlement protection laws, stiffened since the Access Funding scam that came to light in 2015, require mandatory Independent Professional Advice (IPA) See Independent Professional Advice (IPA) for Structured Settlement Sellers (4structures.com)  and MD Cts & Jud PRO T. 5, Subt. 11, Refs & Annos

Avoid a nasty overbite of your payments, shop around for the best deal if selling your structured settlement    Source: Dreamstime  Baltimore Maryland, National Aquarium

But IPAs under Maryland structured settlement factoring reforms are not perfect as is evident by a recent case I came across. 

Perhaps the IPA fee should be refunded

After the annuitant paid the IPA, the IPA actually signed off on a low ball offer from a structured settlement factoring company. The annuitant however, took matters into his own hands and was able to get competing offers that were 30% better than what the IPA signed off on.

The discount rate the educated annuitant negotiated was sub 5%*!

It shows again, that if you must go down the road of parting ways with stable tax free structured settlement income you absolutely must shop around. Note that the company that low balled you in the first place might actually pay the most when in competition. 

In a sign that unethical Florida structured settlement factoring sharks still target Maryland seals, the annuitant was being told to do the transaction in Delaware. In the process of gathering the names of these companies to submit to Brian Frosh, the Maryland Attorney General.

*The interest rate environment is subject to change and rates available when you choose to obtain a quote may be materially different. That's why you should stay calm and always shop around.

Selling A Structured Settlement in 2023? Get The 411 on Cash Now. Don't Be a Victim (4structures.com)

 

 

Wilcac LIfe Registers as a Structured Settlement Transferee in MD Giving Its Annuitants "Home Team" Liquidity Option

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Wilcac Life Insurance Company is listed is one of the three registered structured settlement transferees in Maryland, giving former Continental Assurance Company (CNA) structured settlement annuitants a "home team" liquidity option.  Wilcac Life Insurance Company acquired the structured settlement portfolio of CNA several years ago. It's name is an amalgamation of Wilton Re and the initials for Continental Assurance Company.

Maryland regulations established in the wake of the Access Funding debacle make it unlawful for a factoring company, or “structured settlement transferee," to acquire structured settlement payment rights in Maryland without first registering with the Office of the Attorney General. 

It is unclear whether or not Wilcac intends to buy structured settlement payment rights from annuitants of life insurance companies it has not acquired. A number of insurance companies buy securitizations of structured settlement payment rights from companies such as JG Wentworth.

If you have a structured settlement originally with Continental Assurance Company, which is now Wilcac Life Insurance Company, and have liquidity needs by all means get a quote from Wilcac Life, but ALWAYS shop around. Always speak to an independent licensed financial professional.

MD Attorney Shafted Multiple Allstate Structured Settlement Payees with Bogus IPAs

by Structured Settlement Watchdog

Charles E. Smith's Structured Settlement IPA Work | The "Pffft" That Keeps on Lingering

Allstate offered an Advanced Funding Exchange Notice (AFEN) liquidity option as a rider its standard

"Trusty" Lawyer IPA

structured annuity contract, which according to its terms, permitted annuitants to exchange their future payments for a lump sum at a discount rate of 8%.  This is material information that was publicly available and that attorney Charles E. Smith should have known when he was engaged to provide independent professional advice. 

Charles E. Smith's bogus independent professional advice to Baltimore lead paint victims with structured settlements has already been the subject of a Washington Post expose, or two.   I also posted about his "work" in June 2015 (see link below).

But having been provided with and examined a list of cases where Charles E.Smith was listed as the provider of independent professional advice (or alleged independent professional advice), at a trade conference,  the details of just how badly Charles E. Smith's shoddy advice shafted Allstate structured settlement annuitants in particular, including the late Freddie Gray and his family, have become crystal clear.

Discount rate on a sampling of Maryland structured settlement transfer cases involving Allstate Life Insurance Company payee where Charles E. Smith is listed as the IPA. Compare to Allstate's AFEN rate of 8%.

Melinda Buchanan  CAE14-13520  10.48%

Brittany Marshall    CAE14-13538   18.71%

Melinda Buchanan  CAE-14-13537  10.48%

Vincent Jones Jr.   CAE 13-35467   13.93%

Jason Blake            CAE 13-36530  16.73%

Tysean Robinson      CAE 13-37648  18.05%

Crystal Linton          CAE  13-37649  22.52%

Crystal Linton           CAE 13-28909   19.85%

Frank Driver              CAE  14-02175   25.07%

Brian Stokes              CAE 13-23519     22.80%

Freddie Gray Jr.       CAE 13-28911      17.10%

Carolina Gray            CAE 13-28911      17.10%

Fredericka Gray        CAE 13-28910     17.10%

Floyd Lindell             CAE 13-28912      12.31%

MD Lawyer Charles E. Smith Sued for Bad Structured Settlement Advice in IPA   June 19, 2015

How many of the payment streams from these cases ended up as structured settlement derivatives sold as scam labeled "secondary market annuities" to investors?

Maryland's structured settlement transfer laws were amended and higher standards became required for IPAs as a result of the furor created by the Washington Post expose.  An appeal of the settlement in a class action lawsuit brought on behalf of victims, by the Maryland Attorney General, is pending oral arguments in March 2019.

 

 

 

 

 

Structured Settlement Buyers Using Unregistered Corporations Targeted By Maryland AG

by John Darer® CLU ChFC MSSC RSP CLTC

The Washington Post reports December 18, 2015 that in papers filed in court in the past month, the Maryland Attorney General has contested six proposed  structured settlement factoring transactions that unregistered corporations filed in Maryland state court to buy structured settlement payment rights, spurring the withdrawal of five of the petitions. (In such transactions, the structured settlement buyers pay the seller of the structured settlement a discounted lump sum, and the seller signs ownership of all or part of the remaining payments over to the structured settlement buyer) Some of the unregistered entities, investigators found, have no established holdings.

Court papers say that "an increasing proportion of the petitions for approval of these transactions filed in Maryland courts have been filed on behalf of unregistered [out-of-state] LLCs

Court papers say that "an increasing proportion of the petitions for approval of these transactions filed in Maryland courts have been filed on behalf of unregistered [out-of-state] LLCs [limited liability companies], many of which appear to be related to one another,” according to the Washington Post. “This extraordinary proliferation of unregistered LLCs deters regulatory and judicial oversight and may make it more difficult for Marylanders who may have been harmed in these transactions to obtain relief for any such harm.”

Maryland is looking into whether it can look to invalidate deals filed by unregistered entities.  Why not?  West Virginia's Structured Settlement Protection Act requires structured settlement buyers to register with its Secretary of State. Here is what West Virginia requires:

§46A-6H-8. Registration with the secretary of state.

(a) A transferee or other person in the business of soliciting or purchasing future payments shall file a registration statement with the secretary of state before advertising or arranging transfers of consumer’s future payment rights in this state. The registration statement shall contain:

(1) The name and address of the transferee;

(2) The name and address of the transferee’s agent for service of process within the state, or if the company does not have one within the state, a statement that the secretary of state will serve as the agent for service of process; and

(3) A full and complete disclosure of any prior or pending litigation involving alleged violations of this article’s provisions or consumer complaints filed with the attorney general’s office of this state that allege violations of this article’s provisions, or a notarized statement that there has been no such litigation or unresolved complaint relating to the operations of the transferee.

(b) The transferee shall update the statement within thirty days after a change of information occurs.

(c) Each transferee registering pursuant to the provisions of this section shall maintain a copy of the registration statement. The transferee shall allow a consumer, interested party or court to inspect the registration statement on request.

(d) The secretary of state may charge each transferee that files a registration statement with the secretary of state a reasonable fee not to exceed one hundred dollars to cover the cost of filing.

Not only are unregistered LLCs being used,  but some LLC's don't even exist within a short period of time after a series of structured settlement factoring transactions have been approved.  In one case that was recently subject of a Georgia Attorney General investigation, family members acting as trustees  of a special need trust and somehow got a judge to approve 3 structured settlement factoring transactions filed by Florida LLC's that, according to Sunbiz.org, ceased to exist a year after the transactions were concluded.  I was able to tie one of the LLCs to a NASP member. The family member trustees were eventually removed in favor of another trustee.

Until a much needed licensing and regulatory framework is pit in place, it's important that state Attorneys General step it up as Brian Frosh is doing in Maryland.  There is a lot of reckless business conduct in the structured settlement factoring business that is going unchecked and harmful to consumers.

Welcome to the "Frosh Pit!"

 

Read  Maryland probes buying of settlement payouts by "unregistered shell" firms

Read Maryland Attorney General Release of December 11, 2015 Court Filings Seek Greater Transparency in Potentially Harmful Financial Transactions Involving Lead-Paint Poisoning Victims and Other Injured Marylanders

Maryland law requires out-of-state companies doing business in the state to register with the State Department of Assessments and Taxation, a process that makes it easier to hold companies accountable if their conduct violates state law or harms citizens. The Attorney General can bring court actions to restrain companies from doing business in Maryland if they fail to register or otherwise violate Maryland corporate law.

Novel Idea: Levy fines and enforce existing corporate law to finance regulatory structure

Think of this, if ALL states' Attorneys General conducted an investigation and audit of structured settlement buyers doing business in their and started levying fines for past non compliance, they would easily be able to finance the a proper licensing and regulatory structure to set rules and monitor the marketing and solicitation by the structured settlement buyers and protect structured settlement annuitants.  Connecticut, for one, has pretty onerous fines.

 

 

Mass Tort Lawyers Preparing for Battle With Structured Settlement Factoring Companies?

by Structured Settlement Watchdog®

David Haynes, a partner with The Cochran Firm says that a number of law firms are investigating the business conduct of structured settlement factoring companies and they are "going to get these companies and the independent advisers who enable this 'highway robbery' to take place" 

His comments contrast his statement in the same interview that the structured settlement industry (primary market) "is legitimate and helpful". These came in an interview on RT Network on The Big Picture Show's Screwed News segment hosted by Mike Papantonio, the Pensacola Florida Mass Tort lawyer and partner in Levin Papantonio. The show aired on Tuesday December 8, 2015. Watch Episode One of "Mass Tort Lawyers v Structured Settlement Factoring Companies and Independent Professional Advisers"

Coinciding with the anniversary of Pearl Harbor, the utterance of the words of Admiral Isoroku Yamamoto "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve" by someone in the structured settlement factoring industry and those financing them, would not be out of place.

 

 

Bethesda's Access Funding Slammed By Washington Post for Preying on Poor Blacks

by Structured Settlement Watchdog®

Bethesda's Access Funding has been raked over the coals on page one of the Washington post for alleged predatory behavior targeting Baltimore's lead-poisoned poor blacks with structured settlements, including the late Freddie Gray.  The Washington Post's Terrence McCoy's thoughtful in depth expose attempts to shine a bright light on what he calls the little-noticed, effectively unregulated netherworld of structured settlements".  (emphasis added).

McCoy asserts that Baltimore has become a prime target. It’s here that one teen — diagnosed with “mild mental retardation,” court records show — sold her payments through 2030 in four deals and is now homeless. He says" it's here that companies blanket certain neighborhoods in advertisements, searching for a potentially lucrative type of inhabitant, whose stories recall the legacy of Freddie Gray".

The Washington Post investigation reviewed thousands of pages of court records, interviewed industry insiders and 8 victims of lead of lead poisoning and concluded that Access Funding's court documents illuminate the mechanics of the settlement purchasing and how little scrutiny it receives. 

Maryland’s structured settlement protection act is “substantially weaker” than in most states, according to a cite of Craig Ullman, an attorney with Washington DC's Hogan Lovells who was cited by McCoy.  Maryland currently doesn’t require that settlement recipients appear in court, as Illinois’ law does.   It also doesn’t make purchasing companies file their petitions in the seller’s county of residence, as in New York, Oregon and other states.

If the annuitant does not appear in court, the judge cannot ask questions, important questions. Among the allegations in lawsuits that have been filed in New York and Virginia in the last year against several different settlement purchasers ,  were that victims were coached by the representatives of the settlement purchaser as to what to say.  Do you really think an affidavit was handwritten or dictated by the annuitant and then typed up by the law firm for the buyer?   or was it a case of 'sign here, sign here'? Taking those allegations as a possibility,  a judge that simply takes affidavit evidence in life impacting financial transactions cannot do a thorough enough job of determining best interest unless the annuitant appears, in my opinion.

According to the Washington Post, an alleged victim of Access Funding said she feels hunted, “like a target or something.” Settlement purchasing companies, she said, pester her with phone calls and letters. Just the other day, Rose said she opened the mailbox and there was a letter from Access Funding, which is based in Chevy Chase MD.

Court scraping is alive and well in Maryland, facilitated by Maryland’s court system which  makes it easy to find the right clientele. Its case search puts lead-paint lawsuits into their own category, meaning a few keystrokes can call forth thousands of names. This unique confluence of factors constitutes the “perfect storm of bad stuff", according to a McCoy's cite of Earl Nesbitt, executive director of the National Association of Settlement Purchasers

Terrence McCoy and the Washington Post have shined in using the Post' media platform to bring national attention to the shortcomings of the structured settlement secondary market.  His article demonstrates that there needs to be much better regulation of structured settlement buyers and how they solicit customers.

Read How companies make millions off lead-poisoned, poor blacks  Washington Post August 25, 2015

 

 

MD Lawyer Charles E. Smith Sued for Bad Structured Settlement Advice in IPA

by Structured Settlement Watchdog®

Independent Professional Advice is a mandatory under the Maryland Structured Settlement Protection Act for structured settlement sellers in the State of Maryland.  The logical conclusion for this requirement is to provide greater assurance that a structured settlement annuitant knows what he or she is doing and makes an informed decision, without the influence of the cash now pusher or buyer.

Yet shocking news has emerged as a Montgomery County Maryland attorney's alleged actions have further shaken the credibility of the under-regulated structured settlement factoring world and confidence in the current system in place to protect annuitants.

Derwood MD lawyer Charles E. Smith and CES Law Group LLC have been sued over allegedly bogus independent professional advice.  Smith allegedly advised an illiterate, intellectually disabled young woman on the sale of a structured settlement (designed to protect her throughout her lifetime) for a small and severely discounted amount of cash, without meeting her or providing counsel on the potential consequences of selling the structured settlement payments. Attorney Smith did not make any inquiry or investigation into whether Maryalice Rose had the financial capacity and ability to handle a sum of money all at once,  according to a Daily Record report of the complaint (emphasis added)

The victim of the alleged intentional misrepresentation is 20 year old Baltimore resident Maryalice Rose. The result of Charles E. Smith's alleged negligence is that Maryalice Rose lost a significant portion of the structured settlement she was due to receive for damages, arising from a lawsuit settlement for brain-related injuries from childhood exposure to lead-based paint. The legal action against Charles E. Smith and his firm seeks compensatory damages and over $5 million in punitive damages.

Easy Access Funding Assisted by Questionable IPA

The proposed sale of the settlement began when Rose received an unsolicited phone call from a representative of a Access Funding LLC, who told her she would receive a “fair and substantial sum of cash” if she agreed to sell her settlement to the company, the lawsuit claims.

A number of settlement purchasers such as Access Funding use "mini-max" imagery (  the concept of "sell your teensy weensy payments for a huge lump sum") as misleading bait.  I will deal with the common predatory sales pitch in another post.

In Rose we see a disturbingly familiar "coaching" allegation, similar to what we saw in the Terrence Taylor and Michael Lafontant complaints, where the Rose complaint alleges that Brendan Franks, allegedly a representative of Access Funding, asked Rose what she planned to do with the money, she responded that she wanted to help her mother out financially with her mother’s house. Because Franks knew a Maryland court had to approve the transaction, he told Rose to say that she wanted the cash payout so she could purchase her own home, according to the complaint.

In November 2013, a notary public hired by Access Funding gave Rose multiple documents to sign, despite, according to the complaint,

1. She was unable to read them or determine if they were accurate before signing them

2. No “reasonable attorney” would have recommended the transaction

Please note that at the time of posting Access Funding has not been named in the lawsuit.

Read Structured Settlement Protection Act IPAs | What's the Standard?, my December 27, 2014 blog post in which I question the standard of independent professional advice.

Also Montgomery Lawyer faces Malpractice Suit  Maryland Daily Record June 16, 2015

Also see Maryalice Rose v Charles E. Smith etal.  Circuit Court for Baltimore City  Case Number 24C15002960

The State of Maryland has had it share of problem actors in the structured settlement secondary market of late.

• In March, a Mount Airy Maryland man, David Springer, was found by Judge Marvin Garbis to have engaged in questionable business practices, including but not limited to running a "purported company" and using fake identities in social media and other advertising to the public. We exposed how there was also use of fake paid testimonials that were held out to the public as real customers of the purported company Sovereign Funding Group.  The BBB of Greater Maryland has been lambasted for continuing to give the nonexistent purported company its highest rating and misleading consumers.
  
• In the last 6 months I have exposed Maryland rooted JRR Funding for, among other things, using fake paid testimonials that were held out to the public as real customers on one of its websites, Einstein Structured Settlements.