In an article published Friday the 13th Baxter states "The unfolding fraud scandal involving high-rolling South Florida lawyer Scott Rothstein raises questions about the nature of structured settlements. Did Rothstein manipulate these financial arrangements to his advantage or concoct something else entirely?

Baxter includes the link to the Wikipedia entry for structured settlements and if he actually read the entry that is connected to the link he'd see that what Rothstein concocted was something else entirely. Furthermore, given what we know so far is there any reason to believe anything that Scott Rothstein has said?

For anyone researching structured settlements that is writing stories about Scott Rothstein please review the following flow chart which accurately describes what happens in a REAL structured settlement transaction. If any reporter reviews this chart and THEN goes back and reads every account of the purported money flow in the Rothstein scam it is patently obvious that it is a label that is being used to mischaracterize  what really happened.

Baxter's ill informed article states "the traditional structured settlement is essentially an annuity. If, for example, a law firm were to settle a major case with the City of Miami that would pay out over one year, the firm might go to its lender bank and ask to borrow against the settlement. But when a settling party has a sketchier track record of creditworthiness, plaintiffs can sell their settlement stake to investors who assume the risk at a premium"

Fact:  A structured settlement is not a product, it is a method for paying damages that has its foundation in various sections of the Internal Revenue Code

Fact:  A structured settlement can be funded with annuities or obligations of the United States government. Source: IRC 130(d)

Fact: The "structured settlement" example used by Baxter describes a legal financing transaction for lawyers.

Edward H. Davis , Jr.(pictured above), a Miami lawyer with Astigarraga Davis who specializes in asset recovery is asked to weigh in.  Davis was cited to have said "Structured settlements are basically people buying annuities at a discount, but they come with a risk, because presumably the person or entity that owes the money could default."

Fact: Edward H. Davis, Jr. has no bona fides on the subject of structured settlements. Click here for his professional biography as it appears on his firm's web site.

Fact: Structured settlement are not "basically people buying annuities at a discount". Comment: By publishing Edward Davis ' quote Baxter simply makes himself and AmLaw look like a horse's ass. Consider that Baxter and AmLaw link to the definition of structured settlement in Wikipedia and then quote a lawyer, who has no bona fides on the subject, who says something that conflicts with the Wikipedia definition and the structured settlement definition that one can find in the Internal Revenue Code.

Baxter steps on his own tail again when he states  "Lending money to litigants isn't new. People who are caught up in costly civil suits and in need of financial help to fund those suits are willing to pay high yields to borrow money. Rothstein, lawyers say, likely saw a way to cash in on this by acting as the middleman who found investors to advance reduced settlement funds to plaintiffs".  That's pre-settlement financing dude, NOT structured settlements!

In a response to LBN colleague Mark Wahlstrom who expressed similar concerns to mine in comments on the AMLaw blog, Baxter says "thanks for the feedback. I understand the sensitivity to the linkage between Rothstein and structured settlements, but the fact remains that this is what the lawyers closest to the situation are saying at the moment.

I tried to show in the post above how Rothstein allegedly warped the template of structured settlements to suit his own needs, not cast aspersions on the nature of those settlements themselves. The fact is that Rothstein is raising these questions himself by beating the structured settlement drum.

Until prosecutors file charges against Rothstein I think we'll all be pretty much in the dark as to what exactly transpired here".

Baxter's response to Wahlstrom is a cop out to cover up poor research. Nevertheless I do encourage him and other reporters to keep digging and look to informed sources with bonas fides on the topic of structured settlements.

Just a week ago weren't we reading an article from Harriet Bracky's column in the FL Sun-Sentinel:

 James Logan of James E, Logan Associates, Ltd.  Farmington Hills, MI (center), along with fellow NSSTA Board members Larry Niemi and now NSSTA President Dan Durbin on their installation at the NSSTA annual meeting La Jolla, CA in  2008.  Source : NSSTA

Unfortunately by continuing to mischaracterize a professional certification conferred by the National Structured Settlement Trade Association (Download CSSC completion certificate circa October 2007) as being conferred solely by the University of Notre Dame, James Logan has not honored his leadership commitment to the NSSTA as a member of the NSSTA Board of Directors. 

Both Logan and his daughter, Christine Logan Garascia, a  member of the NSSTA Political Action Committee, disgracefully continue to state on their corporate website that they received their Certified Structured Settlement Consultant certification from the University of Notre Dame, when the program is only hosted at the University.

All checks for the tuition to the 4 day program are paid to NSSTA and the certificate given to those who complete the program clearly states that the National Structured Settlements Trade Association confers the designation. The University of Notre Dame does not list the CSSC program as a course on its website. In August 2009 the NSSTA Board of Directors voted to publish specific guidelines on the promotion of the designation and written notifications were sent by email to all NSSTA members (according to Executive Director, Joe Ricci).

As a member of the NSSTA Board of Directors, James Logan is part of the structured settlement industry's front to Congressional leaders that's important to the viability of our brand and product. 

James Logan, CSSC (top right), as part of the NSSTA delegation at the AAPD Gala March 5, 2009
Source : NSSTA

How many members of Congress or Senate leaders do you suppose want to take money from industry leaders with mischaracterized or misrepresented credentials, at a time when financial services overhaul is on the table and integrity of rating serves are being questioned? Having a Board member mischaracterizing or misrepresenting credentials undermines the industry's credibility and lobbying efforts.

Fellow industry commentator Mark Wahlstrom, CEO of The Legal Broadcast Network recently questioned the relevance of the National Structured Settlement Trade Association (NSSTA). There is a growing level of discord among NSSTA membership about the organization. Having a so-called leader like James Logan, CSSC, who flouts the wrong thing to do, with impunity from the NSSTA Board, simply says something about the standard for integrity within the organization.

I have publicly called for James Logan's resignation or suspension from the NSSTA Board of Directors. The NSSTA bylaws provide for the suspension of a member of the Board of Directors for cause. If James Logan, or any other person serving the trade association , does not have a few minutes to accurately represent his or her credentials then I opine that they are not fit to serve as a leader representing the industry. At a time when we are actively dealing with the fallout from alleged $1B Ponzi lawyer Scott Rothstein misrepresenting what a "structured settlement" is, the last thing we need is to have OUR so-called leaders mis-characterizing or misrepresenting professional credentials. NSSTA should be enforcing its own guidelines but hasn't.

Those who are friends of James Logan who have disdain for the manner of James Logan's "crucifixion" should instead be a true friend to James Logan and get him to change is errant ways.

The New York Daily News published the following in an article dated November 12, 2009 and attributed it to the Reuters news organization:

"The settlement ventures allegedly offered to investors by Rothstein involved lucrative whistle-blower and employment discrimination cases. The investors would make up-front cash payments to individuals owed money by the courts to buy the right to collect the full amount of the settlements later".  (underline for emphasis)

Comments

1. Minimal research by Reuters and the New York Daily News would show that the Courts would not owe money to individuals as the result of a successful lawsuit.
2. In a law suit there are plaintiffs and defendants. In the case of Qui Tam (whistleblower cases) the plaintiffs are referred to by the Civil War era label of "Relators". The Defendant may or may not be insured.
3. Whether a legal case is resolved by way of (1) negotiated settlement (2) arbitration or (3) bench or jury verdict/judgment the terms of the settlement, arbitration or judgment will set forth who must pay, how much they must pay, and to whom. Generally the Defendant will pay, or. if insured,  the insurer on behalf of the Defendant.

This author, John Darer offers his services as a qualified resource to any investigative reporter, or any news organization with an interest to accurately report about structured settlement, settlement planning, structured settlement factoring, structured settlement factoring company business practices or legal settlements. In addition to the personal knowledge of this author, John Darer can provide introductions to other legitimate sources of information. on these topics and other related topics to help reporters get to the information they need to write accurate news pieces.

John Darer has written over 2,150 blog posts on the subject matter described, has over 26 years of financial services experience including over 20 in the stuctured settlements. He is also a featured structured settlement expert commentator on The Legal Broadcast Network.  Click for John Darer's full bio.

Members of the media may also wish to refer to:

"The Miami Division of the Federal Bureau of Investigation (FBI) and the Miami Field Office of the Internal Revenue Service (IRS) are seeking information from individuals who have invested in the Rothstein Structured Settlement Investment (RSSI) or from individuals who have information that would be helpful to the investigation. To facilitate information gathering, the FBI has established a dedicated e-mail address and an informational telephone line 1-800-CALL-FBI, "Rothstein Option."

Details of the investigation cannot be discussed at this time, as the investigation is ongoing. However, the FBI and IRS are seeking to identify victims and to obtain any information to determine the extent of any potential fraud.

In an effort to determine the scope of the matter and the amount of losses that may be involved, investigators are requesting that individuals provide:

• Basic contact information (name, address, telephone numbers, e-mail address.)
• Amount of investments/losses with the Rothstein Structured Settlement Investment.
• Whether you can verify your investments by providing the most recent statements.
• Any additional information that may be helpful.

Information may be provided via dedicated e-mail address Rothstein.Investment@ic.fbi.gov or to informational telephone line 1-800-CALL-FBI, “Rothstein Option” (1-800-225-5324.) If you have investigative information that may aid the criminal investigation, you may also submit it via email or telephone. For those who would like to return funds received from Rothstein please call the 1-800 number and someone will get back with you with specific instructions on how to return the funds.

Hard copy documentation may be mailed to:

FBI Victim Assistance Program
Rothstein Investment
16320 NW 2nd Avenue
Miami, Florida 33169"

Comments

1. Earlier today the FBI representative said that Rothstein scam losses could top $1billion. 10 days ago the number was $50-$100 million. Needless to say it's looking like Scott Rothstein is going to go away for a very long time.
2. It is a pity that the IRS has chosen not to caption the words "structured settlement", given that a portion of the snake oil that Rothstein was allegedly peddling had to do with the sale or purchase of alleged interest in structured settlement payment rights.
3. It is a pity that the IRS in endorsing this press release has chosen to ignore what is set forth as a definition of structured settlement in 5891(C)(1) of the Internal Revenue Code.
4. It is a pity that the IRS has chosen to ignore the definition of structured settlement factoring transaction set forth in 5891(C)(3) of the Internal Revenue Code.
5. Scott Rothstein is the scumbag's poster child. Scott Rothstein represents everything that is the antithesis to what the many honorable structured settlement consultants, registered settlement planners and sudden money financial advisors work to accomplish for their clients every day. It is therefore, patently unfair that the words "structured settlement" are not appropriately captioned to denote that what Rothstein's scam involved putative "structured settlements" or alleged "structured settlements" but apparently weren't structured settlements.
6. I can't help but gloat a little about the irony dripping from cash now pusher factoring firm named Structured Settlement Investments, LP. I've long felt that the name of the company was misleading. Now, while there is no evidence of the company's involvement with Rothstein, the company's label is forever stained by the FBI and IRS label of the Rothstein scam as "structured settlement investment".

Naturally such a poor demonstration of "keeping current" begs the obvious question of how current those up the "NALU river" are on the matters on which they claim to be experts.

Come on folks, stop the insanity, this stuff isn't THAT hard to figure out!

 Update your websites!

Furthermore, the word intelligence conjures up images of "secret information, especially about an actual or potential enemy, including the agency, staff or office employed with gathering such information" (see Answers.com) 

As an ad for the International Spy Museum says  "All Is Not What It Seems". The outdated information presented as standard intelligence WAS NOTobtained via an "SPI" (ironic isn't it?)  Predator drone stationed high over New York City,

or by SPI operatives disguised as cleaning staff.

The word intelligence also means the capacity to acquire and apply knowledge.

In a positive note affirming AIG's ratings, Moodys says that it believes that AIG can pay back the $120 billion it owes United States taxpayers.

14 months after the world seemed over Moodys says "the restructuring plan still relies heavily on government support, but if AIG's operations and global financial markets continue to stabilize, the company can likely generate enough value to repay the government". They also remarked that the 3rd quarter results "show continued stabilization of the core insurance operations despite challenging market conditions''

The ratings agency also praised former MetLife CEO' Robert Benmosche's strategy to rebuild some of the AIG's businesses previously on the short list to be sold, but also noted that a decline in realizable value could lead to downgrades. Here's what Fox Business had to say:

While the recent track record of rating agencies suggests we should add the word "guarded" to this new sense of optimism to go along long with a "grain of salt", the recent intense scrutiny of such agencies suggests such agencies would be less inclined to give a favorable report unless a better job had been done on their homework.

Mum's the word from the structured settlement industry's AIG "grave dancer", Patrick Hindert, Executive Director of Forge Consulting subsidiary, The Settlement Services Group.

Cravenho says:

"The process of servicing payments for structured settlement recipients after completing a structured settlement factoring transaction is not a new practice and is a common occurrence in the industry".

"The issue is caused when an annuitant decides to sell a portion of their payment, but rather than selling an entire payment, they decide to keep a portion of that payment and dice the payment in half or as they see fit. Most insurance companies will accommodate this process and send the appropriate portions to both parties, the tort victim and the investor. The problem arises when a structured settlement factoring company does a transaction with an annuitant who decides that they want to dice payments and the issuer is 1 of the 3 companies who will not dice the payments".  WHO ARE THESE INSURANCE COMPANIES?.

Cravenho sees the following problems:

• Certain structured settlement factoring companies were using this scenario as an excuse to service annuities that did not need to be serviced
• The annuitant no longer owns the rights to their future payments
• If the annuitant was ever in a situation where they needed to sell more payments, the structured settlement factoring company who completed their last transaction is the only company that is able to complete any  future transactions for that individual. Cravenho says increase the potential for price gouging

Cravenho suggests the following possible solutions:

1. The first solution would be to have the insurance companies who currently won’t dice payments, start dicing payments. This would eliminate any and all need for any structured settlement factoring company to service payments.
2. Companies who may need to service payments should use a third party bonded, insured, and licensed company to handle their servicing.

Read the full Cravenho post on The Servicing of Structured Settlement Payments

Watch John Darer's Legal Broadcast Network video podcasts on Structured Settlement Payment Servicing

Six months ago I wrote this email Download John Darer email re servicing question to NSSTA Executives 5-15-2009to NSSTA executives and structured settlement market leaders and outlined the issues. While I did receive an email acknowledgment of the receipt of the aforementioned email from an NSSTA executive the day it was sent , there has been no further NSSTA response to this author or to the general NSSTA membership.

Surely members of the structured settlement industry and personal injury community will have had it following the reading of the Scott Rothstein fiasco and the abject confusion of the mainstream press (as well as the lawyers filing the complaint against Rothstein) that manifested in the mischaracterization of "pre settlement funding" with "structured settlements" in reporting of the alleged Ponzi scheme.

Peachtree Settlement Funding has been pulling the "cash now stunt" for years. They used to fraudulently advertise that they could deliver "all your money now" in a structured settlement factoring transaction (see below) until we exposed them. Now they are rolling back the years to say they deliver structured settlement quotes.  Download Peachtree Settlement Ad Pay Per click 11-10-2009. A quick licensee search at various state insurance department websites is likely to dispel the myth that Peachtree Settlement Funding can deliver a structured settlement quote.

Today's "entertainment" from one of Peachtree's "play mates" in Structured Settlement Aper's Pillory, where it's the case of monkey see -monkey do" (but in this case it's NOT flattering! 

Structured Settlements 4Real Wall of Shame Archive on Peachtree Settlement Funding

Download Peachtree all you money now 4132008

Download Get Cash for Structured Settlements_ Peachtree Settlement Fun.. 7192008

Download Peachtree Structured Settlmeent Now BS 11-5-2008

Download Structured Settlement Now untrue Peachtree advertising title 8-15-2009

For those not up to speed on acronyms, ROFLMAO stands for "Rolling on The Floor Laughing My Ass Off"

I'm often bemused by anonymous, at times defamatory, commentary served up by people who are obviously in the structured settlement industry on The Legal Broadcast Network. Instead of acting like men (not being sexist, just judging by the tone of the comments) these wimps practice the art of "gutter sniping".

Common Snipe of the Structured Settlement Industry. These Scolopacidae can be found "lurking in the tall grasses" around posts on The Legal Broadcast Network.