White, et al. v. Symetra Assigned Benefits Service Company, et al.
United States District Court Western District of Washington
Case No. 20-cv-01866

The Court appointed attorneys Edward Stone of Edward Stone Law PC, Alison Chase, Gretchen Freemen Cappio, Lynn Lincoln Sarko, Adele Daniel and Sydney Read of Keller Rohrback LLP, Daniel Simons of Marcus & Marcus PC, and Jerome Marcus and Jonathan Auerbach of Marcus & Auerbach LLC as class counsel in this Class Action.

On August 3, 2022, Judge Marsha J. Pechman of the United States District Court for the Western District of Washington issued an order granting class certification for claims under RICO, the Washington Consumer Protection Act, civil conspiracy, unjust enrichment, and contract claims in this case. The Court certified the following class:

“All persons who are or were, at any time, annuitants of [a structured settlement annuity (“SSA”)] that contemplated life contingent payments issued by Symetra and who subsequently sold to a Symetra affiliate the right to receive payments from that SSA in a factoring transaction.”

Case Overview
When a tort victim settles with the tortfeasor, the parties sometimes agree to “structure” the settlement. A structured settlement provides payments over time, often for the life of the person, rather than as one lump sum payment. Structured settlements often take the form of a structured settlement annuity (SSA) issued by a life insurance company like Symetra. Structured settlements were designed to ensure that the injured person will have access to funds for medical care and other life necessities for years to come-and companies such as Defendants gained substantial tax benefits from issuing SSAs. Because they are intended to protect the person over the long term, SSAs often include terms that restrict the person’s ability to assign their payments to another person or entity.

Defendants Symetra Life Insurance Company and Symetra Assigned Benefits Service Company (SABSCO) issued many annuities to injured persons, with the promise to protect the injury victims’ long-term financial security. As alleged in Plaintiffs’ amended complaint, Defendants solicited Plaintiffs’ rights to their future payments as part of a business scheme. Defendants used their knowledge and unequal bargaining power to profit by purchasing Plaintiffs’ future payments at a steep discount in factoring transactions. In that process, Symetra misled Plaintiffs-the very same injury victims whose long-term financial interests they were supposed to protect-and took away the safety and security that their SSA was intended to provide. Plaintiffs allege that this scheme violates RICO and Washington’s Consumer Protection Act, among other laws.

For more information about this case, please email us at eddie@edwardstonelaw.com, call us at (203) 504-8425, or contact us using our contact form.

 

Pension de-risking transfers totaled $34.2 Billion in 2021, the highest since 2012. Two of the largest pension de-risking deals of 2021 involved Athene Holdings. Lockheed Martin transferred  $4.9 Billion in pension liabilities affecting 18,000 employees to Athene Holdings effective January 1, 2022. Athene also took on $2.8 Billion in pension liabilities from JC Penny affecting 30,000 retirees. In 2020, Bermuda based Athene was fined $45 Million by the State of New York for violations related to its pension de-risking business. According to New York’s Department of Financial Services investigation, Athene improperly entered into 14 pension de-risking transfers involving thousands of New York residents.

On December 17, 2021, the Consumer Financial Protection Bureau settled its lengthy, five-year litigation with Access Funding, LLC, Access Holding, LLC, Reliance Funding, LLC, Lee Jundanian, Raffi Boghosian, Michael Brokowski, and Charles Smith for a paltry disgorgement of $40,000 and a $10,000 civil penalty. The settlement was approved by Judge Ellen Lipton Hollander, who took over the case after the retirement of Judge J. Frederick Motz in 2017. The stipulation states that Lee Jundanian was the CEO of Access Funding from February 2013 – May 2014, and an advisor to the company thereafter, and had an ownership interest in Access Funding from its inception to its dissolution. Boghosian was the chief operating officer of Access Funding from May 2014 to October 2015. According to the settlement stipulation, the Access Funding Defendants neither admitted or denied the allegations in the CFPB’s complaint, except those necessary to establish jurisdiction over the settling defendants.

On December 21, 2021, Maryland Attorney General Brian Frosh issued a press release announcing the indictment of three individuals in connection with the Access Funding structured settlement factoring scheme involving victims of lead paint poisoning.  Raffi Michael Boghosian, Charles Edward Smith, and Anuj Sud were charged with Theft Scheme over $100,000 and Conspiracy to Commit Theft Scheme Over $100,000.  According to the complaint filed by Attorney General Frosh in 2015, Boghosian was the chief operating officer of Access Funding and related affiliates. Sud filed most of the structured settlement transfer petitions on behalf of Access Funding, and Smith purportedly provided professional advice to the sellers. The Maryland Structured Settlement Protection Act, Md. Code Ann., Cts. & Jud. Proc. Section 5-1101, et seq., requires sellers to obtain independent professional advice in connection with any proposed transfer.

Kudos to a group of investigative journalists at the Minnesota Star Tribune for what is to be a four part series on abuses in the structured settlement factoring industry. The interactive article, with the first two parts published on October 3, 2021 is a wealth of data on more than 700 cases approved by Minnesota judges, as well as the personal stories of individuals impacted by some of those cases.

As pointed out by the Star Tribune, “In Minnesota, records show that one in eight transactions approved by local judges involved a seller with documented mental health problems. Many of those individuals received settlements after suffering traumatic brain injuries that permanently disrupted their lives.”

Further, according to the Star Tribune, “In interviews conducted over the past two years, a dozen judges complained about an approval process that seems stacked in favor of the settlement purchasing companies, with key information — such as civil commitment records — usually left out of files.”

Check back for additional posts on this exposé after Parts 2 -4 are published.

Jack Cohen, Board Chairman of the Association of BellTel Retirees passed away suddenly on September 29, 2021. Jack was a tireless advocate for all retirees, as well as a beloved husband and doting grandfather. The world is a lesser place without Jack Cohen, and his sage advice and wisdom on issues facing retirees will be sorely missed by all of us here at Edward Stone Law. Rest in Peace, Jack Cohen.

A link to Jack’s obituary can be found here. If you would like to make a donation to one of the non-profits that were important to Jack, you can do so at the links below.

The Association of BellTel Retirees:  https://belltelretirees.org/donate-now/

Support Connection: https://supportconnection.org/donate-now/

HP Inc., the Palo Alto, California based technology company will transfer $5.2 Billion in pension liabilities to Prudential Insurance Company of America as of October 31, 2021. HP disclosed this information in its recent 10-Q filing. This represents approximately one-half of HP’s U.S. pension liabilities. The pension de-risking transfer affects some 41,000 retirees and beneficiaries.

Last month, on July 12, 2021, in Consumer Financial Protection Bureau v. Access Funding, LLC, et al, (Case No. 16-3759, U.S. District Court, District of Maryland) Judge Ellen Hollander denied a motion to dismiss the amended complaint and a motion for a judgment on the pleadings. The amended complaint filed in 2017 against Access Funding, LLC, Access Holding, LLC, Lee Jundanian (former CEO of Access Funding), Raffi Boghosian, COO of Access Funding, Michael Borkowski, CEO of Access Funding, and Charles Smith, Esq., an advisor for Access Funding alleged that the defendants employed abusive practices when purchasing structured settlements from consumers in exchange for lump-sum payments.  The case was stayed for several years pending the Supreme Court’s decision in Seila Law LLC v. CFPB, __ U.S.__, 140 S. Ct. 2183 (2020). In her July 12th memorandum opinion, Judge Hollander found that while Seila Law was not binding, the facts in that case were similar to the Access Funding case. As such, she denied defendants motion and the CFPB’s enforcement action against Access Funding, Jundanian, Boghosian, Borkowski, and Smith will continue.

This August 2, 2021 Washington Post feature article examines the controversial practice of “race-norming” and its use by the NFL in determining compensation for former players in the NFL Concussion Settlement. The Washington Post’s investigation found that “the NFL and Seeger are responsible for building a settlement claims process that guaranteed race-norming would occur, making it more difficult for some Black former players to qualify for payments, and they failed to act on concerns that the practice was discriminating against Black former players as far back as 2019.” According to the Washington Post, counsel for the NFL, Brad Karp, declined to be interviewed for the article, but in written statements to the Post, “continued to defend the practice of race-norming and disputed claims made by former players, their lawyers, and some members of Congress that the practice is discriminatory.”

Najeh Davenport and Kevin Henry sued the NFL in August 2020, alleging that their “cognitive function” test scores were manipulated using “race-norming” to reduce their chances of receiving benefits under the concussion settlement. Judge Anita Brody dismissed their claims in March 2021 as “an improper collateral attack on the settlement agreement in the NFL multidistrict litigation” but expressed concern over the practice of race-norming and ordered that the NFL and Class Counsel, Seeger Weiss address the issue with Magistrate David Strawbridge. In June 2021, Judge Brody allowed Mr. Davenport and Mr. Henry to participate in the mediation with the NFL and Class Counsel.

Kevin Henry and Najeh Davenport are represented by Cyril V. Smith, Aitan D. Goelman and Ezra B. Marcus of Zuckerman Spaeder LLP, Edward S. Stone of Edward Stone Law PC, and J.R. Wyatt of J.R. Wyatt Law PLLC. The two cases are In re: National Football League Players’ Concussion Injury Litigation, No. 2:12-md-02323 (E.D. Pa.), and Henry et al. v. NFL, No. 2:20-cv-04165 (E.D. Pa).

Lockheed Martin transferred $4.9 billion in pension obligations to two of Bermuda based Athene’s subsidiaries, Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York. This is Lockheed’s second pension risk transfer transaction with Athene, and s is Lockheed’s fourth pension de-risking transfer in the last two years. In 2019, $1.9 Billion in pension liabilities was transferred to MetLife; in 2020 Metropolitan Life Tower (a MetLife subsidiary) took on $1.4 Billion of Lockheed’s pension liabilities, and in 2018 $800 Million was transferred to Athene.

This latest pension de-risking transfer affects approximately 18,000 participants of Lockheed Martin’s pension plan who are currently receiving benefits. Beginning on January 1, 2022, Athene will take over the payment and administration of retirement benefits for these 18,000 retirees and their beneficiaries.