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Category: Annuities

Lawsuit Alleges Financial Advisers Should Have Known Investments With Pension Factoring Company Were Questionable, Says News Report

Lawsuit Alleges Financial Advisers Should Have Known Investments With Pension Factoring Company Were Questionable, Says News Report

The Pittsburgh Post-Gazette today reported that a recently-filed lawsuit alleges that financial advisers and others should have known that investments in a pension-factoring company were questionable. In the story (Investors, Regulators Can’t Find Architect Of Massive Pension Scheme, available here), Len Boselovic reports that “Scott Kohn, an ex-felon who orchestrated a nationwide scheme that victimized retirees as well as investors seeking safe monthly income, is nowhere to be found.” Boselovic said that officials “from Pennsylvania’s Department of Banking and Securities trying…

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Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

The Wall Street Journal recently reported that Future Income Payments, LLC, has apparently collapsed and left investors “stranded.” In an article published July 24 (here), the Journal last month said that the company “appears shut” and the man who ran it, Scott Kohn, has disappeared. The Journal said that Kohn was a  “64-year-old felon” who “ran a company from a Nevada strip-mall mailbox” and that investors now say the company “took them for more than $100 million in losses.” Said…

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Michigan Appeals Court Affirms Attorneys’ Fees Award in Structured Settlement Protection Act Dispute, Where Factoring Company Did Not Comply with Statute

Michigan Appeals Court Affirms Attorneys’ Fees Award in Structured Settlement Protection Act Dispute, Where Factoring Company Did Not Comply with Statute

The Michigan Court of Appeals last week affirmed an award of attorneys’ fees to insurers based on a factoring company’s failure to comply with the state’s structured settlement protection act. J.G. Wentworth S.S.C. v. Morris, No. 333413, 2018 Mich. App. LEXIS 347 (Mich. Ct. App. Feb. 22, 2018), involved a dispute over a single structured settlement payment due to be paid in 2015 to payee Anthony Morris.  Between 1998 and 2007, Morris entered into a series of transactions whereby he…

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In J.G. Wentworth’s Second Bankruptcy, Trustee Objects, But Court Approves Plan

In J.G. Wentworth’s Second Bankruptcy, Trustee Objects, But Court Approves Plan

Settlement factoring company J.G. Wentworth has emerged from its second bankruptcy in less than a decade. Judge Kevin Gross, of the U.S. Bankruptcy Court for the District of Delaware, earlier this month issued an order confirming a prepackaged reorganization plan of J.G. Wentworth based on an agreement with its lenders. A trustee had objected to the plan (see “JG Wentworth Ch. 11 Plan Approved Over Trustee Objection”, Law360 (subscription required), available here), but nonetheless the court approved the plan on…

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Report: J.G. Wentworth To File For Second Bankruptcy In Less Than A Decade

Report: J.G. Wentworth To File For Second Bankruptcy In Less Than A Decade

The Philadelphia Business Journal on Friday reported that J.G. Wentworth will file for bankruptcy, the second bankruptcy filing by the factoring company in less than a decade. The Business Journal said the Pennsylvania “company reached an agreement with lenders to significantly reduce its debt and enhance its balance sheet” and that the “agreement also calls for the board of directors the be reconstituted to reflect new ownership of the company.” In addition, according to the report, the “restructuring will be…

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Court Rules Against Pension Factoring Company That Challenged Consumer Financial Protection Bureau’s Authority, Investigation

Court Rules Against Pension Factoring Company That Challenged Consumer Financial Protection Bureau’s Authority, Investigation

A federal court has upheld the constitutionality of the Consumer Financial Protection Board’s structure, and further found that the CFPB’s investigation into a pension factoring company’s business practices was neither overboard nor outside the CFPB’s jurisdiction. In Consumer Fin. Prot. Bureau v. Future Income Payments, LLC, Case No. SACV 17-00303-JLS ((SSx), 2017 U.S. Dist. LEXIS 80074 (C.D. Cal. May 17, 2017), Judge Josephine L. Staton of the federal district court for the Central District of California granted the CFPB’s petition…

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In Latest Opinion in Long-Running Series of Lawsuits Over Stranger-Originated Annuity Transactions, Rhode Island Court Grants Insurers’ Request for Restitution

In Latest Opinion in Long-Running Series of Lawsuits Over Stranger-Originated Annuity Transactions, Rhode Island Court Grants Insurers’ Request for Restitution

For years, the story of Joseph Caramadre’s stranger-originated annuity transactions have been told and re-told in lawsuits in Rhode Island state courts and federal courts in the First Circuit. In fact, the latest opinion in such a lawsuit starts with this Rhode Island federal court Chief Judge William E. Smith saying that “Joseph Caramadre’s stranger-initiated annuity transaction (‘STAT’) schemes have been described at length not only by this Court, but also by the First Circuit Court of Appeals and the…

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Report: Federal Judge In Rhode Island Orders Restitution For Insurance Fraud Conspiracy That Included Stranger-Originated Annuity Scheme

Report: Federal Judge In Rhode Island Orders Restitution For Insurance Fraud Conspiracy That Included Stranger-Originated Annuity Scheme

A federal judge in Rhode Island this week ordered that two men must pay $46 million in restitution for the losses they caused in an insurance fraud scheme that involved, among other things, stranger-originated annuities, according to a news report in the Providence Journal-Bulletin. United States District Court Judge William E. Smith, of the District of Rhode Island, ruled that estate planner Joseph A. Caramadre and his former employee, Raymour Radhakrishnan, must pay more than $46 million to insurance companies…

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What’s An ‘Advance’?

What’s An ‘Advance’?

In the world of secondary insurance markets, an “advance” is a payment to a customer or potential customer of a secondary market transaction.  There are other names for the term, but advances are usually made by a company in order to induce the customer to proceed with a transaction with that company. There can be many ways an “advance” can be made, and some companies advertise the fact that they offer advances – although the fine print is somehow not…

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Veterans Benefits Transactions Drew Legislator’s Attention A Decade Ago

Veterans Benefits Transactions Drew Legislator’s Attention A Decade Ago

Pension factoring has drawn considerable attention this year from state and federal officials, as described, for example, in these posts here, here and here. But more than a decade ago, pension factoring drew the attention of at least one federal legislator. In 2001, Florida Congressman E. Clay Shaw criticized the practice, according to a newspaper article that ran at the time.  Said the article, headlined “VA Benefits Sales Under Fire” (linked here): “A South Florida congressman said he is outraged…

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