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Swanson adds Minnesota to states
alleging senior trust scam
ST. PAUL --
Minnesota's Lori Swanson has become the third state attorney general
in under a year to take legal action against a so-called "trust
mill."
Swanson has filed suit against two California businesses operated by
the same family. Swanson alleges the two bilked Minnesota seniors
out of millions of dollars.
She charges that American Family Legal Plan (AFLP) inappropriately
sold "living trusts" to as many as 2,000 Minnesota seniors. She also
charges Heritage Marketing and Insurance Services, a related
company, with selling annuities deceptively.
Both companies are owned and controlled by
father-and-son partnership Jeffrey and Stanley
Norman and allegedly preyed on the same elderly
people.
"These companies deceptively sold boilerplate living
trusts to senior citizens regardless of whether
those trusts were suitable for the seniors' estate
planning or financial needs," Swanson said.
Pennsylvania Attorney General Tom Corbett filed a
second
suit
against the the Normans, their two companies, a
Pennsylvania lawyer and five insurance agents in
April last year. Corbett originally sued the
defendants in October 2004 after complaints from
seniors.
Both suits accuse the defendants of "intentionally
deceiving consumers into believing 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."
Last October North Carolina Attorney General Roy
Cooper won a state Superior Court
order
preventing the two companies from doing further
business in the state during the course of a state
lawsuit.
Cooper had sued the two in May 2006 for using
"aggressive, unfair and deceptive tactics to
pressure elderly consumers." He estimates that
Pennsylvania seniors lost hundreds of thousands of
dollars to the two companies through unsuitable
investments.
Swanson estimates that AFLP sold trusts to as many
as 2,000 Minnesota seniors at a cost of $2,000 each,
returning the company $4 million. She says Heritage,
whose agents were expected to sell $25,000 in
annuities to each AFLP customer, could have pulled
in $50 million.
Swanson's lawsuit seeks injunctive relief against
the companies as well as civil penalties and
restitution. |
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