by John Darer® CLU ChFC MSSC RSP CLTC
Investors in structured settlement payments rights from sellers in structured settlement transfers by corrupt forger, ex Miami lawyer Juan Manuel Camacho Jr.,are sucking wind, as the issuers of the underlying annuities have purportedly frozen payments while the mess is sorted out.
The Camacho forgeries and similar forgeries in New York illustrate the dangers for investors in structured settlement payment rights.
Investors are seduced by higher implicit rates than they might be able to achieve elsewhere and structured settlement buying intermediaries are only too happy to oblige. Structured settlement payment rights are derivative financial instruments whose solicitors are not currently required to hold a license and whose sales practices, with the exception of a state or two, are subject to little to no regulation or enforceable ethics rules, particularly conflicts of interest. Some companies like Novation Funding LLC and Seneca One LLC have recently been exposed here for advertising one thing to sellers and then doing deals with huge spreads that are blatantly to the advantage of the investor and not the seller [ Cedric Martez Thomas for Novation and Lauren Nesbitt for Seneca One]
Transfer of structured settlement payment rights requires a court to determine that the structured settlement transfer is in the best interest of the seller and any applicable dependents of the seller.
If the Court approval was procured by fraud, or in the case of the Camacho cases, there was not a valid order, the validity of the transfer is thrown into doubt. It’s a real mess that at best reduces the yield to the investor by adding costs. Where investors are dependent on the income it’s a potential nightmare.