The following press release was issued by the Pennsylvania Attorney General on April 27, 2006.

April 27, 2006

Attorney General Corbett files second suit alleging "Living Trust" sales scheme; Court asked to shutdown operation after new reports of deception 

HARRISBURG - Attorney General Tom Corbett today announced that a second civil lawsuit has been filed against the operators of a living trust sales scheme, who are accused of deceiving elderly consumers into purchasing Revocable Living Trusts and other estate planning products that pay the sellers high commissions, but may not be in the consumers' best interest.   

The Attorney General's Charitable Trusts and Organizations Section simultaneously filed a motion for special injunction and for preliminary injunction that asks the court to immediately require that the defendants cease all illegal operations until the lawsuits are decided.  A Commonwealth Court hearing on the motion is set for 10 a.m. Wed. May 3.

The suit identifies 11 defendants, including Montgomery County lawyer Brett B. Weinstein, who was named in the Attorney General's original October 2004 complaint. Corbett said this latest legal action follows an investigation into additional complaints from elderly consumers, who claimed that they were defrauded by the defendants.

Both legal actions accuse the defendants of intentionally deceiving consumers into believing that they were receiving competent legal and impartial estate planning advice, when in reality, they were coaxed or deceived into purchasing only the products that the defendants sold.

The lawsuit identifies the defendants as:

Brett B. Weinstein, Esquire, 900 East 8th Ave., Suite 300, King of Prussia, Montgomery County, PA.
American Family Prepaid Legal Corporation, doing business as American Family Legal Plan, 3505 Cadillac Ave., Costa Mesa, CA, and 670 Woodbourne Road, Suite 100, Langhorne, PA.
Heritage Marketing And Insurance Services, Inc., doing business as Heritage Marketing & Insurance,  3505 Cadillac Ave., Costa Mesa, CA, and 210 Penn Central Blvd, Suite 307, Pittsburgh, PA.
Stanley Norman, of Trabuco Canyon, CA, and owner-operator of American Family and Heritage Marketing.
Jeffrey L. Norman, of Trabuco Canyon, CA, and owner-operator of American Family and Heritage Marketing, and father of Stanley Norman. 
Todd B. Garry, a.k.a, Todd Garfinkle, of 16 Heather Court, Newtown, PA, and licensed insurance salesman in the Commonwealth.
Patrice Kimbler, of 1927 Poplar Road, York, PA, who is not licensed to sell insurance in the Commonwealth. 
Lewis Kopelman, of 5907 Wertztown Road, Narvon, PA, who is not licensed to sell insurance in the Commonwealth. 
Ronald Patten, of 213 Wickshire Circle, Lititz, PA, and is licensed to sell insurance in the Commonwealth.
William F. Woods, of 3709 Sharon St., Harrisburg, PA, and is licensed to sell insurance  in the Commonwealth.
John Does, number 1 through 25, who are individuals to be identified as defendants in connection with the case.

According to the complaint, the defendants market their estate planning services to mostly older consumers through mass mailings and seminars to induce the purchase of their estate planning documents and annuity products.

To make the sale, the defendants falsely infer that:

The non-lawyer representatives are attorneys or employed by Weinstein as members of his legal office, when they are actually insurance agents who work for American Family or Heritage Marketing or both.
The non-lawyer representatives are qualified to legally advise consumers regarding the advantages or disadvantages of revocable living trusts, probate and other estate planning matters. 
The probate process will greatly reduce the size of the decedent's estate because of attorney and executor fees. 
Revocable living trusts will lessen or eliminate taxes.
Probate will expose private matters to the public but a trust will keep everything private.
Probate exposes a decedent's estate to litigation but a revocable living trust will not.   
Court costs are very expensive and probate will result in delays.
Revocable living trusts meet their needs without fully explaining or examining other estate planning vehicles. 
Other estate planning vehicles are inferior and have negative drawbacks.
They were "representatives," "estate planners," "asset preservation specialists," or other titles when they were insurance sales persons. 
They were exercising independent, unbiased judgments about the consumers' estate planning options when they were primarily interested in making large commissions from the sale of revocable living trusts and annuity contracts.  

After consumers agreed to purchase the revocable living trust plans, the defendants
then persuaded them to exchange or convert their investments for various types of annuity contracts, even if that move had a negative financial impact or tax consequence, the suit alleged. 
 

As part of the overall scheme, the complaint also accuses the defendants of preying on elderly consumers by selling long-term deferred annuity contracts to those who would not live to derive full benefits, misrepresenting the rates of return, costs, penalties and other terms of the contracts, plus using scare tactics or omissions to sell estate planning products that were not appropriate to their needs.

"In our view, the defendants horribly misled older Pennsylvanians about the financial consequences of the trust or annuity packages that they purchased," Corbett said. "The allegations in this case are among the most insidious financial misrepresentations perpetrated on the elderly to be investigated by this office."

In at least one case, investigators said a non-attorney salesperson, without full consent or knowledge of an elderly consumer, was marking "no" to medical life support procedures on the documents being prepared. 

The suit alleges violations of Pennsylvania's Consumer Protection Law and unauthorized practice of law provisions of the Judicial Code.

Corbett said Weinstein is accused of failing to comply with an interim consent decree regarding the October 2004 lawsuit and an Assurance of Voluntary Compliance he entered into with the Attorney General in 2001 that barred him from violating the law in the sale of estate planning products.

The suit and preliminary injunction asks the court to immediately halt the defendants from illegally conducting any current or future marketing or sale of estate planning products and forfeit any profits that were made as a result of their illegal actions. Additionally, the legal action asks the court to require the defendants to pay full restitution to consumers and pay fines of as much as $3,000 per violation along with the Commonwealth's investigation costs. 

Consumers who wish to file complaints with the Attorney General's Office in this case are asked to call 1-800-441-2555 to obtain a complaint form or file electronically by visiting www.attorneygeneral.gov.

The complaint and preliminary injunction were filed in Commonwealth Court in Harrisburg. The case is being litigated by Senior Deputy Attorney General Thomas M. Devlin of the Attorney General's Charitable Trusts and Organizations Section.
April 27, 2006

Attorney General Corbett files second suit alleging "Living Trust" sales scheme; Court asked to shutdown operation after new reports of deception 

HARRISBURG - Attorney General Tom Corbett today announced that a second civil lawsuit has been filed against the operators of a living trust sales scheme, who are accused of deceiving elderly consumers into purchasing Revocable Living Trusts and other estate planning products that pay the sellers high commissions, but may not be in the consumers' best interest.   

The Attorney General's Charitable Trusts and Organizations Section simultaneously filed a motion for special injunction and for preliminary injunction that asks the court to immediately require that the defendants cease all illegal operations until the lawsuits are decided.  A Commonwealth Court hearing on the motion is set for 10 a.m. Wed. May 3.

The suit identifies 11 defendants, including Montgomery County lawyer Brett B. Weinstein, who was named in the Attorney General's original October 2004 complaint. Corbett said this latest legal action follows an investigation into additional complaints from elderly consumers, who claimed that they were defrauded by the defendants.

Both legal actions accuse the defendants of intentionally deceiving consumers into believing that they were receiving competent legal and impartial estate planning advice, when in reality, they were coaxed or deceived into purchasing only the products that the defendants sold.

The lawsuit identifies the defendants as:

Brett B. Weinstein, Esquire, 900 East 8th Ave., Suite 300, King of Prussia, Montgomery County, PA.
American Family Prepaid Legal Corporation, doing business as American Family Legal Plan, 3505 Cadillac Ave., Costa Mesa, CA, and 670 Woodbourne Road, Suite 100, Langhorne, PA.
Heritage Marketing And Insurance Services, Inc., doing business as Heritage Marketing & Insurance,  3505 Cadillac Ave., Costa Mesa, CA, and 210 Penn Central Blvd, Suite 307, Pittsburgh, PA.
Stanley Norman, of Trabuco Canyon, CA, and owner-operator of American Family and Heritage Marketing.
Jeffrey L. Norman, of Trabuco Canyon, CA, and owner-operator of American Family and Heritage Marketing, and father of Stanley Norman. 
Todd B. Garry, a.k.a, Todd Garfinkle, of 16 Heather Court, Newtown, PA, and licensed insurance salesman in the Commonwealth.
Patrice Kimbler, of 1927 Poplar Road, York, PA, who is not licensed to sell insurance in the Commonwealth. 
Lewis Kopelman, of 5907 Wertztown Road, Narvon, PA, who is not licensed to sell insurance in the Commonwealth. 
Ronald Patten, of 213 Wickshire Circle, Lititz, PA, and is licensed to sell insurance in the Commonwealth.
William F. Woods, of 3709 Sharon St., Harrisburg, PA, and is licensed to sell insurance  in the Commonwealth.
John Does, number 1 through 25, who are individuals to be identified as defendants in connection with the case.

According to the complaint, the defendants market their estate planning services to mostly older consumers through mass mailings and seminars to induce the purchase of their estate planning documents and annuity products.

To make the sale, the defendants falsely infer that:

The non-lawyer representatives are attorneys or employed by Weinstein as members of his legal office, when they are actually insurance agents who work for American Family or Heritage Marketing or both.
The non-lawyer representatives are qualified to legally advise consumers regarding the advantages or disadvantages of revocable living trusts, probate and other estate planning matters. 
The probate process will greatly reduce the size of the decedent's estate because of attorney and executor fees. 
Revocable living trusts will lessen or eliminate taxes.
Probate will expose private matters to the public but a trust will keep everything private.
Probate exposes a decedent's estate to litigation but a revocable living trust will not.   
Court costs are very expensive and probate will result in delays.
Revocable living trusts meet their needs without fully explaining or examining other estate planning vehicles. 
Other estate planning vehicles are inferior and have negative drawbacks.
They were "representatives," "estate planners," "asset preservation specialists," or other titles when they were insurance sales persons. 
They were exercising independent, unbiased judgments about the consumers' estate planning options when they were primarily interested in making large commissions from the sale of revocable living trusts and annuity contracts.  

After consumers agreed to purchase the revocable living trust plans, the defendants
then persuaded them to exchange or convert their investments for various types of annuity contracts, even if that move had a negative financial impact or tax consequence, the suit alleged. 
 

As part of the overall scheme, the complaint also accuses the defendants of preying on elderly consumers by selling long-term deferred annuity contracts to those who would not live to derive full benefits, misrepresenting the rates of return, costs, penalties and other terms of the contracts, plus using scare tactics or omissions to sell estate planning products that were not appropriate to their needs.

"In our view, the defendants horribly misled older Pennsylvanians about the financial consequences of the trust or annuity packages that they purchased," Corbett said. "The allegations in this case are among the most insidious financial misrepresentations perpetrated on the elderly to be investigated by this office."

In at least one case, investigators said a non-attorney salesperson, without full consent or knowledge of an elderly consumer, was marking "no" to medical life support procedures on the documents being prepared. 

The suit alleges violations of Pennsylvania's Consumer Protection Law and unauthorized practice of law provisions of the Judicial Code.

Corbett said Weinstein is accused of failing to comply with an interim consent decree regarding the October 2004 lawsuit and an Assurance of Voluntary Compliance he entered into with the Attorney General in 2001 that barred him from violating the law in the sale of estate planning products.

The suit and preliminary injunction asks the court to immediately halt the defendants from illegally conducting any current or future marketing or sale of estate planning products and forfeit any profits that were made as a result of their illegal actions. Additionally, the legal action asks the court to require the defendants to pay full restitution to consumers and pay fines of as much as $3,000 per violation along with the Commonwealth's investigation costs. 

Consumers who wish to file complaints with the Attorney General's Office in this case are asked to call 1-800-441-2555 to obtain a complaint form or file electronically by visiting www.attorneygeneral.gov.

The complaint and preliminary injunction were filed in Commonwealth Court in Harrisburg. The case is being litigated by Senior Deputy Attorney General Thomas M. Devlin of the Attorney General's Charitable Trusts and Organizations Section.
This article was first published by the Pennsylvania Bar Association in the Real Property, Probate and Trust Law Newsletter, Summer 2003 edition. It is reprinted with the permission of the author.