OLYMPIA - Washington State Attorney General Bob Ferguson grew up in a family of veterans - with a father who served in the U.S. Navy, both grandfathers serving in the military and several uncles who served in World War II.
That's why he was infuriated to learn unauthorized financial planning companies were allegedly targeting senior veterans with schemes promising new untapped veterans benefits-if the veterans were willing to let these "planners" help manage their financial assets.
"Our veterans made great sacrifices for our country, and they deserve our protection from unscrupulous business people who prey on them," Ferguson asserts.
The Attorney General's office recently settled with four companies, garnering restitution for victims totalling $81,000 in suspended civil penalties, $19,500 in attorneys fees and a court order prohibiting the companies from targeting veterans in the future.
Over the last several years, Kansas Attorney Scott Sexton and American Benefits Advocates reportedly worked with three Northwest companies-in violation of several Washington laws-to offer advice and planning to seniors who were veterans or veterans' spouses.
Ferguson's office says the three Northwest companies were:
- Financial Concepts, owned by Olden (AKA Otis) Manning and located in Spokane;
- Equity Financial Freedom, doing business as American Veterans Financial, Inc., owned by William Moreland and located in Coeur d'Alene;
- Senior Advisory Services, Inc., owned by Mark Zimmerman and located in Mill Creek.
Each marketed a variety of estate distribution documents - including irrevocable living trusts - to help the veterans and/or their spouses qualify for a U.S. Veteran's Administration benefit called Aid and Attendance.
Aid and Attendance is a special allowance in addition to monthly pensions for veterans and/or their surviving spouses who need the aid and attendance of another or who are housebound.
Veterans and their spouses can only qualify for these benefits if they meet special criteria-including having limited income and assets.
According to the assistant attorney general who handled the case, some of the veterans who worked with these planners said they did not recall being fully informed of the risks involved in moving assets to qualify for the USVA benefits, including losing Medicaid eligibility.
Under the terms of the consent decree, the three Washington companies and the Kansas attorney are permanently prohibited from engaging in the following practices without being authorized to practice law in Washington or without a legal exemption:
- Soliciting people or receiving any compensation directly or indirectly for services related to marketing estate distribution documents such as wills or trusts;
- Agreeing to prepare or gather the information required to create a will, trust or other estate distribution document;
- Advising people about a will, trust or other estate distribution document; or
- Selecting, modifying or completing a will, trust or an estate distribution document.
They are also prohibited from:
- Taking financial and estate information from people, claiming to be informing them of USVA benefits while actually using the information to sell estate planning or other financial services;
- Giving or receiving any compensation, in any form, for referrals;
- Intentionally representing that an attorney not licensed in Washington is qualified to advise consumers on estate planning in Washington;
- Misrepresenting the probate process using questionable statistics and surveys;
- Persuading consumers not to consult an attorney or disparaging attorneys' estate planning advice or documents; and
- Engaging in fee-splitting or unauthorized practice of law with a Washington-licensed attorney.
American Veterans Financial was ordered to pay $1,500 in attorney's fees and costs and $10,000 in civil penalties, suspended as long at the company complies with the consent decree. The company must also pay restitution to one victim.
Senior Advisory Services was ordered to pay $4,000 in attorney's fees and costs and $16,000 in civil penalties, suspended as long as the company complies with the consent decree. The company must also pay restitution to two victims from Renton.
Financial Concepts was ordered to pay $4,000 in attorneys' fees and costs and $15,000 in civil penalties, suspended as long as the company complies with the consent decree.
Finally, Sexton was ordered to pay $10,000 in attorneys' fees and costs and $40,000 in civil penalties, suspended as long as he complies with the consent decree.