$16 M default judgment entered against seller of living trust
By Michelle Massey, Texarkana Bureau
Southeast Texas Record
4/1/2009 7:25 PM
U.S. District Judge Harry F. Barnes granted plaintiffs a default judgment for more than $16 million against The Estate Plan, a company accused of ripping off senior citizens in Texas and Arkansas.
The Estate Plan and other living trust sellers are facing allegations of "masquerading as qualified financial advisers, estate planners, lawyers, and paralegals" to "exploit and prey" upon senior citizens with the creation and selling of "unnecessary and often useless" living trusts.
The suit claims companies intentionally misstate the law, and use fear of the estate tax to get senior citizens to buy "plans," that are often ineffective and unnecessary.
Once the plans are purchased these operators convince senior citizens to use their IRA accounts or other tax-exempt accounts to purchase variable annuities without disclosing the risks, fees, surrender charges, or commissions.
Defendants are accused of fraud, unauthorized practice of law, negligence, breach of fiduciary duty and conspiracy.
Defendants named in the lawsuit are John R. Vermillion, John Vermillion and Associates LLC, CLA USA Inc., CLA USA Insurance Services, CLA Marketing, CLA Estate Services, CLA Insurance Services, Charles Loper Jr., Charles Loper III, Steven Morgan, Robert Reese and The Estate Plan Inc.
The plaintiffs filed an amended complaint on Sept. 11 adding defendants Winning Strategies Marketing, Inc., Quest Staffing Group Inc., James E Bradshaw Jr, Joel Carson and Olaf Turek.
Correction: U.S. District Judge Harry F. Barnes granted plaintiffs a default judgment for more than $16 million against The Estate Plan after failing to answer the complaint. The Estate Plan has been severed from the suit. Charges are still pending against the others and all are maintaining their innocence. The commenter below is correct.