by Structured Settlement Watchdog
The Wall case has done more for highlighting the perils of investing in structured settlement receivables than any other case to date
A financial advisor and a defendant in litigation both falsely claimed in a deposition that a Pennsylvania couple had acquired structured settlement annuities, despite knowing or reasonably being expected to know that these were not and could not have been structured settlement annuities. This detail was revealed in documents submitted by Holmdel, NJ’s Altium Group as part of its defense against an unjust enrichment claim. The Walls ended up losing $152,999 by investing in a structured settlement receivables misrepresented as annuities scam, which was later exposed as fraudulent.
Examples from the Defendant’s statement of undisputed material facts that drew the logical conclusion that the Walls were lied to about what they were buying
Beginning in 2011, on the advice of their investment advisor, Roy D’Alessandro (“D’Alessandro”),the Walls invested in five structured settlement annuities(R. Wall Dep. Tr. 43:11–25 [96a]; R. D’Alessandro Dep. Tr. 85:2–22 [157a]).
Comment
The Walls didn’t actually buy structured settlement annuities; instead, they purchased structured settlement receivables that were marketed as annuities, that they understood to be annuities, but weren’t annuities at all.
In December 2018, the National Association of Insurance Commissioners stated in its Statutory Issue paper 160 that factored structured settlement payment streams are neither annuities or insurance products. The fact that both the financial advisor and Altium testified or declared under oath that the Walls invested in structured settlement annuities draws the logical conclusion what verbiage was used to sell multiple times to The Walls by the adviser and, as a result of those solicitations, how the Walls came to believe, as it turns out erroneously, what they were buying.
The Walls had previously worked with the adviser to obtain insurance policies. Thus the advisor would or should have know the difference between an annuity and something that is not an annuity. [“They discussed the investment opportunities that structured settlement annuities offered with their investment advisor, D’Alessandro, with whom they had previously worked to obtain insurance policies (R. Wall Dep. Tr. 12:1–13:23 [86a–87a]; L. Wall Dep. Tr. 27:25–28:24 [102a–103a])]
D’Alessandro explained to the Walls what structured settlement annuities were and that they provided returns that were significantly greater than the returns that were available with certificates of deposit and United States Treasury bills (R. Wall Dep Tr.13:11–23[87a]; L. Wall Dep. Tr. 28:6–11 [103a])
D’Alessandro then began sending the Walls a structured settlement annuity distribution list by email each week (R. Wall Dep. Tr. 12:19–13:10 [86a–87a])
In or around January 2012, the Walls contacted D’Alessandro to inquire about a structured settlement annuity that had originally been issued by the New York Life Insurance Company (“New York Life”) in favor of Kenneth Stevens (“Stevens”)in connection with a personal injury settlement in a Florida state court action(W. Coluccio Dep. Tr. 58:18–59:3 [132a–133a]; R. D’Alessandro Dep. Tr. 39:25–40:6 [143a–144a]).9.D’Alessandro had learned about the Stevens structured settlement annuity from Altium’s website (W. Coluccio Dep. Tr. 58:18–59:3 [132a–133a])
Evidence #2
Despite knowing that payment rights are not annuities, Altiums’ chief executive admits that he said they were in his deposition
Altium brokers the sale and purchase of secondary market annuities (W. Coluccio Decl. ¶¶2–4[158a–159a]; Am. Compl. ¶10[165a])\
The purpose of the Master Agreement was to enable Altium to broker the Walls’s purchase of structured settlement annuities from the original beneficiaries of those products (Master Agreement §§ 2.02–2.03 [1a]) { Altium’s Statement of Undisputed Material Facts Wall v Altium Group LLC Doc 139 pp 18 2/11/19]. Total lie, Altium could not have possibly brokered the purchase of structured settlement annuities. In fact the annuity in question remains owned by New York Life Insurance and Annuity Corporation. Later referred correctly as purchase if payment rights
The agreed-to purchase price for the Stevens structured settlement annuity was $152,833.37 (Am. Compl.¶15[166a]). [ Statement of Facts #22] . This is a statement made in a legal document by Altium in its defense. Again Altium knew, or should have known that The Walls were not actually purchasing the Stevens structured settlement annuity because the annuity could not be sold. Stevens was not a party to the annuity. Stevens could only sell structured settlement payment rights.
Clearly there is massive confusion (or intellectual dishonesty) even today about what was being sold to the Walls and brokered by Altium as their statement of undisputed material facts clearly demonstrates
At no point during his discussions with the Walls leading up to their decision to purchase the Stevens structured settlement annuity did D’Alessandro discuss with the Walls the risk that a court order approving the transfer of the Stevens structured settlement annuity to them could be later vacated, due to fraud or otherwise (L. Wall Dep. Tr.29:3–31:5[104a–106a]; R. D’Alessandro Dep. Tr. 72:19–25 [154a]). { Altium Statement of Facts #23 2/11/2019] The annuity was not transferred and could not have been transferred.
Corona arranges to purchase the structured settlement annuity from the underlying personal injury plaintiff and also arranges to obtain the required state court approval (Am. Compl.¶9[165a]) { Statement of Facts #27} Again there was no annuity being purchased and once a case is settled Stevens is no longer a plaintiff.
The total commission that Altium received for brokering the Walls’s purchase of the Stevens structured settlement annuity was $4,874.46 (W. Coluccio Decl. ¶12 [161a]).
- In the end the Pennsylvania couple are out $152,999 and have had to spend time and a considerable amount of money in an attempt to enforce their rights. Their investment has been a money loser.
- They believed they were buying structured settlement annuities even though they weren’t actually buying annuities. How did they form such belief? I think its obvious now.
- The purchase of structured settlement derivatives ( scam labeled SMAs or Secondary Market Annuities) through intermediaries instead of directly from the originator has considerable risks, not the least of which is the potential complete loss of investment.
- Insurance companies that issue legitimate annuities, spend millions of dollars marketing a regulated product to retires and others. What was sold to The Walls and is being sold to others is an unregulated product. Structured settlement derivatives are scam labeled annuities to freeload off the goodwill of major insurers and to hoodwink potential buyers as to the safety of the investments.
The Perils of Structured Settlement Receivables
In April 2019 I, John Darer, along with Stephen Harris, then a partner of Philadelphia law firm of Cozen & O’Connor and Peter Vodola, then a partner in West Hartford’s Reardon Scanlon LLP, will be participating in a panel on the Perils of Recycled Structured Settlements at the NSSTA annual meeting in Charleston SC. Investors are solicited on the basis that these receivables are annuities and they’re not. Caveat Emptor applies
The Walls “paid his company in full and received nothing in return”
Defendant Altium’s Corporate Designee and President, William Coluccio, confirm(ed) during his deposition testimony that the Walls paid his company in full and received nothing in return. (Coluccio Dep. 57:20-58:3, Feb. 22, 2017, Joint Appendix 0286a-0287a)
So You Want to Buy Today? Here’s the Disclaimer from Altium Group LLC
Altium Group is acting merely as a listing service for such factoring companies. Altium Group does not represent or warrant the safety or creditworthiness of any of the listed structured settlements. Altium Group is not providing, and does not provide, any legal, accounting, tax, financial, risk analysis, or other advice or guidance of any kind to Purchaser of any listed structured settlements.
It was a different story back in the day when Altium’s website boasted of “Up to 8% Return and Unparalleled Safety of Principal“
Altium claimed in prior website iterations that its clients use its products for retirement planning, CD alternatives… (screen shot 12/21/2016)
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- The Truth About Structured Settlement Receivables – Structured Settlements 4Real®Blog September 5, 2024
- Secondary Market Annuities Explained for Investors – Structured Settlements 4Real®Blog January 4, 2022
- The Secondary Market Annuity Scam Explained – Structured Settlements 4Real®Blog July 9, 2017