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Florida attorney lied to hundreds of disabled trust clients, SEC says

Trusts and estates

Florida attorney lied to hundreds of disabled trust clients, SEC says

The headquarters of the United States Securities and Exchange Commission.

The U.S. Securities and Exchange Commission accuses a Florida attorney of defrauding at least 380 clients, most of whom are disabled and receiving Medicaid or Supplemental Social Security benefits.

In its lawsuit, filed Monday in the Middle District of Florida, the SEC accused Jason D. Lazarus, the CEO of Synergy Settlement Services Inc., of marketing, selling investments in and operating two pooled investment trusts that were allegedly created and operated by the nonprofit Foundation for Those With Special Needs Inc. That nonprofit, the SEC said, was a shell company with no operations or employees.

The defendants, including Anthony F. Prieto Jr., investment adviser and president of Synergy Settlement Services, “installed the foundation as an appointed trustee in an attempt to hide the fact that ‘they’ perform all trustee duties and profit of the operations of the trusts by collecting all fees and other funds from the operation of the trusts,” according to the SEC complaint.

The SEC explained that Social Security law allows recipients of Medicaid and SSI benefits to remain eligible for those benefits even if they have received assets that would otherwise disqualify them from government assistance. They must place these assets, which could include compensation or bodily injury lawsuit settlements, in an irrevocable trust established and managed by a nonprofit.

Lazarus and the other defendants violated federal securities laws by lying to potential trust beneficiaries, telling them they would join a nonprofit-run trust and still be eligible for their benefits, the court said. DRY. Rather, they jeopardized the benefits of their clients by operating and managing the trusts for their benefit.

The SEC said Lazarus and the defendants also lied to the Internal Revenue Service and the Social Security Administration, and also diverted all trustee fees to Synergy Settlement Services. According to the agency, they earned over $675,000 in trustee fees and over $100,000 in joinder fees from 2015 to 2019.

“These defendants also improperly used funds from deceased beneficiaries’ accounts to reimburse themselves for employee salaries and other expenses, as well as to make donations to trial attorneys and other organizations that violated their representations. with the IRS and beneficiaries that they would only use such funds to further the trusts mission of helping people with disabilities,” the SEC added.

Reuters, which covers the lawsuit, said Lazarus, Prieto and Synergy Settlement Services did not respond to requests for comment.