Thursday, April 2, 2009

Estate Planning Fraud Alert

$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.


Anonymous said...

Your summary is misleading as the Default Judgement was only against The Estate Plan. The other Defendants were severed from the case.

The Defendants listed are still denying all the allegations.

Hughes Estate Group Attorneys said...

Thanks for pointing it out.

Anonymous said...

I just severed my employment from winning strategies and would be willing to testify against them. Employees are basically told to bully these people on the phones to get them to 'estate planning workshops' to get them in front of a salesperson who they are told is a licensed senior advisor. I cannot continue to lie to get seniors to spend money on services they do not need. The things the telemarketers are told to say are misleading to say the least. If Winning Strategies Marketing was really removed from this lawsuit then it is a shame. They are were this all begins for these poor people spending money on services they do not need.

Anonymous said...

i also was employed at winning strategies marketing and was threatened that if we didnt get the seniors to the meal we would lose our job....i also was unable to keep up the dishonesty and bullying means to lie to these people....they are the ones who are profiting from this and should pay for doing this to our senior citizens!

Anonymous said...

I am glad I took the time to look into this company. As they called me and painted a very different pitcher. Thanks to all of you.

Anonymous said...

Someone JUST called me from this company....I asked them what they got out of it. and they said basically nothing...The founder was concerned with how citizens who had wills were forced into Probate Court because the wills were too old, etc... He said there were no charges and nothing they were trying to SELL....Well, obviously, that is not true....If they have to LIE to you in order to get you to their workshop, they have ALREADY compromised their integrity.....What else would they do??? I'm NOT attending their "workshop"...and am very glad I took the time to look them up.

Anonymous said...

I worked for CLA for several years. They are financially raping and pillaging the senior community. First, they scare the hell out of them at a seminar that the seniors were coerced and harassed with repeated phone solicitations into attending. And then, they high pressure them into buying a living trust and some "promised services" that they never deliver. When I worked there, nearly 30% of the sales cancelled due to lack of follow through and failure to provide what they promised. This company even went so far as to cheat the State of Texas out of employment taxes by classifying their employees as contractors using a flimsy contract that was not legal. Its a place where you can make a huge income if you are willing to sell your soul to the devil to do it.

Anonymous said...

The majority of the comments DO NOT specify exactly which specific company (defendant) they are talking about. My real world experience tells me "Deep Pocket Law Suits" are common. I get very little clear info from the comments or story. Help me understand clearly, if you can.

Anonymous said...

Beware of CLA USA. Its a matter of time before regulators shut these criminals down.

SheBear said...

This is very concerning. I did attend the workshop BEFORE checking them out. The pitch was for a contract with them for lifetime review of your assets that are and should be in your trust.

The $3,795 fee for a couple would be discounted $500 for attending the workshop. It became somewhat ambiguous whether you needed to pay and sign up before leaving the workshop, but if you did and later had a change of heart, you could cancel and get a refund. What concerned me most was the "credentialed" estate planning attorney who would prepare the trust and other included documents was supposedly located in Searcy, AR. When I commented about the distance the representative said they do the interview by phone and then prepare the documents for review in your home with the CLA USA representative assigned to your contact.

I couldn't stay for the free meal because of another commitment so I left without further discussion. When someone tells me this special price is only good for today but only if you accept before you leave, I'm suspicious. I'm even more suspicious when I'm told there's no obligation if you take the offer today and decide later not to go forward if you haven't started services yet. We were told the attorney gets $650 from the lifetime fee. The attorney was not named, so I wonder if perhaps he/she may be part of "scheme", if in fact that's what it actually is.

Even so, I'm washing my hands of the whole thing.

Unknown said...

Attended the seminar feb 2018. I am well versed in fraudsters attempts smooth operations and and high sales pitchmen. Run as fast as you can away from these folks!

Anonymous said...

Interesting read. I am a licensed insurance agent that got a call from them recently looking for annuity sales agents. I sell the top paying annuities to date. Annuities only do one thing well...either they accumulate well, provide a long term care benefit or give a lifetime payout well. Surprised that they only had one company that was a top pick that had a great LTC rider.

No idea what their commission schedule is but based on can't be good.

No need to pay a yearly fee to review your documents each year. A great insurance agent with financial experience can do the job for free. They just hope you tell you friends about what a great job they did for you.

You can't get great Trust documents for about $3,500 that include about 10 documents to cover yourself really well and help preserve your assets.

And there annuities that don't have caps and follow indexes that are doing 10% to 30% right now. Yes, That's right with no risk of your principle. No fees if you don't add a income rider. You can't get those from Edward Jones or your bank either. The broker can't make enough money on them (especially if you're 70 years old or older) so they rather have your money in the marker so they can charge you an outrageous yearly fee.

If your over 60, stay away from Variable annuities...lots of fees and you still have market risk.