by John Darer CLU ChFC MSSC CeFT RSP CLTC
Pooled SNT Class Action Lawsuit Filed Disabled Child, by his Parents and Co-Guardians are Lead Plaintiffs
A class action lawsuit has been filed by the parents of Clark Chamberlin, parents and co-guardians of a disabled minor child against alleged responsible parties, in the United States District Court for the Middle District of Florida styled:
Plaintiff Clark Chamberlin, a disabled minor child, by and through his parents and co-guardians Todd Chamberlin and Kelli Chamberlin (“Plaintiffs”) bring this Class Action Complaint (“Complaint”) against Defendants Boston Finance Group, LLC (“BFG”); Boston Asset Management, Inc. (“BAM”); Leo J. Govoni (“Govoni”); John W. Staunton, Esq. (“Staunton”); Jonathan Golden (“Golden”); Prospect Funding Holdings, LLC (“Prospect Funding”); Prospect unding Partners, LLC (“Prospect Finance”); Prospect Funding Holdings (NY) III, LLC (“Prospect III”); and American Momentum Bank, individually and on behalf of all others similarly situated
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
CASE NO.: 24-cv-00438
CLARK CHAMBERLIN, a disabled minor child,
by and through his parents and co-guardians TODD
CHAMBERLIN and KELLI CHAMBERLIN, on
behalf of themselves and all others similarly
situated,
Plaintiffs,
v.
BOSTON FINANCE GROUP, LLC, a Florida
limited liability company;
BOSTON ASSET MANAGEMENT, INC., a
Florida corporation;
PROSPECT FUNDING HOLDINGS, LLC, a
Florida limited liability company;
PROSPECT FUNDING PARTNERS, LLC, a
Delaware limited liability company;
PROSPECT FUNDING HOLDINGS (NY) III,
LLC, a New York limited liability company;
LEO J. GOVONI, an individual;
JOHN W. STAUNTON, an individual;
JONATHAN GOLDEN, an individual;
AMERICAN MOMENTUM BANK, a Texas charted(sic) bank,
Defendants.
This SNT Class Action Lawsuits is a BIG DEAL that elevates the importance of governance and overight of financial and nonprofit orgranizations
COUNT I: CONVERSION
Against BFG, Govoni, Staunton, and Golden
COUNT II: BREACH OF FIDUCIARY DUTY
Against Govoni, Staunton, and Boston Asset Management
COUNT III: BREACH OF FIDUCIARY DUTY
Against American Momentum Bank
COUNT IV: AIDING AND ABETTING BREACH OF FIDUCIARY DUTY
Against Govoni, Golden, Staunton, and BFG
COUNT V: AIDING AND ABETTING BREACH OF FIDUCIARY DUTY
Against American Momentum Bank
COUNT VI: NEGLIGENCE
Against Govoni, Golden, and Staunton
COUNT VII: NEGLIGENCE
Against American Momentum Bank
COUNT VIII: VIOLATION OF UNIFORM FRAUDULENT TRANSFER ACT,
FLA. STAT, §726.105 Against BFG and Prospect Funding
COUNT IX: UNJUST ENRICHMENT
Against BFG
COUNT X: UNJUST ENRICHMENT
Against Prospect Funding and Prospect Finance
COUNT XI: DECLARATORY RELIEF – ALTER EGO
Against BFG, Prospect Funding, Prospect Finance, Prospect III, Govoni, Golden, and
Staunton
Note that the SNT Class Action is a civil lawsuit against Defendants against the Founder of the LARGEST Administrator of Pooled Special Needs Trust in the USA and others. Allegations must be proven in a Court of Law.
According to the allegations in the 57 page Class Action Complaint in the Middle District of Florida Case 8:24-cv-00438-SDM-AEP Doc. 1 Filed 02/19/2024
- This tragic case involves a decade long predatory scheme that began in 2009 and
continued at least through 2020 to misappropriate over $100,000,000.00 of special needs trust
assets belonging to the most vulnerable members of our society.
2. The corporate trustee for 2,000 special needs trusts created pursuant to federal law
filed bankruptcy on February 9, 2024, almost two years after its current board of directors
suspiciously claims to have first become aware of this scheme carried out by the trustee’s founders,
insiders, attorneys, and their related entities created to perpetrate this unfathomable
misappropriation, reporting that over 1,500 of the trusts are missing all or a part of their assets.
3. Prior to the bankruptcy filing, no notice of what has now been shockingly revealed as provided by or on behalf of the trustee to those damaged by the misappropriation, leaving already vulnerable individuals without a means of much needed financial support beyond the public assistance they require and receive. Based on what the trustee has revealed in bankruptcy filings, no reasonable action was taken to recover the special need trust losses from any of the individuals or entities that bear responsibility.
4. American Momentum Bank, the bank where the special needs trust funds were deposited and where the perpetrators also banked during the relevant time period, did nothing to prevent the money from being taken. That bank was apparently asleep at the switch despite numerous red flags that any reasonable bank would have acted to address a decade ago. Therefore, the bank also bears liability to the Plaintiffs and Class Members.
5. A class action is necessary to return the value of the misappropriated, pooled special needs trust assets to their beneficiaries and to hold the individuals and entities involved responsible for the extensive damage done. Therefore, Plaintiffs for their son, Clark Chamberlin, and on behalf of other similarly situated special needs trust grantors and beneficiaries, files this suit against the Defendants seeking money damages for conversion, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, negligence, fraudulent transfers, and unjust enrichment, as well as declaratory relief.
6. Defendants in this action are individuals and entities that, rather than applying the care and attention warranted to protect crucial SNT assets, caused and/or aided and abetted the decade-long misappropriation of $100,000,000.00 of SNT assets through their acts and omissions, in contravention of Plaintiffs and Class Members’ rights and resulting in their injuries.
50. To be the trustee of pooled SNTs, the Center was required to create each pooled SNT. To do so, the Center entered into an irrevocable master declaration of trust in each state for which it would serve as trustee. In Florida, for example, the Center entered into a Master Declaration of Trust on March 10, 2001 (“The Florida Pooled Trust”) and amended that trust to be effective prospectively and retroactively, on October 22, 2009. The Center acted similarly to maintain pooled SNTs in other states. A Pooled Trust Joinder Agreement is required to participate in the pooled SNT.
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SIDE BAR: WHAT IS A POOLED SPECIAL NEEDS TRUST?
“A person with only a small amount of money may prefer the low cost of a pooled trust. They may also appreciate working with a nonprofit that is finely attuned to the needs of those living with special needs”. Source: What Is a Pooled Trust, and How Can It Protect My Benefits? (specialneedsanswers.com)
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According to allegations in the Class Action Complaint Case 8:24-cv-00438-SDM-AEP Doc. 1 filed 02/19/2024,continued…
51. In many, if not all cases, the Center, while serving as the trustee, acted to convert Beneficiaries’ interests in their individual and irrevocable SNTs to an interest in pooled SNTs by directing the grantors of the original individual SNTs to execute a Pooled Trust Joinder Agreement, but did so without receiving any court approval.
52. Converting the individual SNTs to pooled SNTs eliminated the Beneficiaries’ families’ and heirs’ remainder interests in trust property upon the Beneficiary’s death. This means, for example, that under a pooled SNT, if the Beneficiary’s trust owns personal property, including money, and real estate where the Beneficiary and his parents live together, the Beneficiary’s parents will have no right to or interest in that property if the Beneficiary pre-deceases them, with no regard to the Beneficiary’s desire or intent or what a court had approved.
54. As it turned out, and as detailed below, in order to facilitate insider loans, upon information and belief, pooled SNTs were used to misappropriate $100,000,000.00 from SNTs for which the Center was the trustee, with the Defendants acting or causing others to act to make harm the Plaintiffs and Class Members
Documentation Anyone?
According to allegations in the Class Action Complaint, Case 8:24-cv-00438-SDM-AEP Doc. 1 filed 02/19/202424,continued...
64. In or around 2009, shortly after Govoni and Staunton resigned from their director positions, the Center began transferring what totaled $50,000,000.00 from SNT accounts maintained at American Momentum Bank to one or more BFG accounts maintained at American Momentum Bank, purportedly as a loan to BFG identified as a “credit facility.” BFG’s principals are the Center’s founders, Govoni and Staunton (the latter also the Center’s attorney), and Golden (a lawyer the Center alleges worked for and with Govoni for more than 15 years).
65. Incredibly, the Center states in Bankruptcy Case filings that it has no copies of any loan documents memorializing the alleged BFG Loan, although it admits the loan documents are referenced in an August 2011 letter from BFG to the Center. The Center also claims it has no records that its Board of Directors or any other party approved the BFG Loan.
69. Astoundingly, the Center claims it just discovered the BFG Loan in April 2022 and attendant depletion of over $100,000,000 SNT assets that had been taking place over a decade long period affecting approximately 1,500 SNTs for which the Center served as trustee.
70. The Center alleges in Bankruptcy Case filings it first became aware of the $100,000,000.00 fraud following Janicki’s resignation from her positions with the Center in or around April 2022, when the Center claims it found an unsigned November 11, 2021, letter from BFG to the Center’s Board of Directors that Janicki left behind. Apparently, Govoni sought to modify the terms of the Note and Line of Credit Agreement by extending the maturity date of the Note and reducing the required interest payments, though the loan had long ago matured.
72. Until filing the Bankruptcy Case in February 2024, the Center gave zero notice to the SNT Beneficiaries of the existence of the Center’s loans to BFG or BFG’s defaults on those loans, waiting at least 22 months to make any of this public, with apparently no reasonable action having being taken to sue BFG, Govoni, Staunton, Golden, American Momentum Bank, or any other individual or entity involved in the misappropriation of SNT assets for which the Center is the Trustee.
118. (John)Staunton’s law firm was engaged to represent Plaintiffs in the creation of the Clark J. Chamberlin Special Needs Trust and to obtain court approval for it, appearing in the guardianship proceeding for that purpose. On August 18, 2011, Plaintiffs, as grantors, executed the Irrevocable Declaration of Trust, with the Center signing that agreement as the trustee, to manage and oversee the settlement proceeds as the trust’s fiduciary.
119. In January of 2014, the hospital resolved the claims against it, which resulted in additional funds to be included in the SNT for Clark. In July 2014, the Center directed Plaintiffs to execute a Pooled Trust Joinder Agreement for the Florida Pooled Trust, even though the individual SNT for Clark was irrevocable. Thereafter, assets from prior and subsequent settlements with defendants to the medical malpractice case were placed in the pooled SNT for Clark, including cash, structured settlement payments, real estate, and a vehicle. This includes settlement proceeds in 2016, 2019, and 2020
Down load Copy of Complaint filed v Defendants BAM, Leo Govoni et al. 2-19-2024
What if you have a trust with the Centers with a structured settlement payable to one of the trusts with misappropriated funds?
To be continued…