Pennsylvania Files Suit to Stop Alleged Living Trust Scam

A suit filed by Pennsylvania Attorney General Jerry Pappert alleges that hundreds of elderly investors were cheated by illegal sales of living trusts, and some lost tens of thousands of dollars.

The civil lawsuit accuses seven business and nine individuals of engaging in an elaborate statewide living trust sales scheme that deceived older Pennsylvanians into purchasing revocable living trusts, long-term annuities or charitable gift annuities that were costly, not in their best interest or unnecessary. The losses of the elderly alleged victims ranged between $1,800 and $80,000.

In one case, an 85-year-old Delaware County man unknowingly was sold a 10-year deferred annuity with his first payment due when he turns 95.

"This alleged scheme was heavily promoted and potentially hurt hundreds of senior citizens across the Commonwealth who may be unaware that they were cheated," Pappert said, adding that he is seeking an injunction to "ban the defendants from engaging in the illegal advertising, promotion and sale of estate planning products or services in Pennsylvania."

According to the results of a nine-month investigation, two estate planning attorneys -- Barry O. Bohmueller and Brett B. Weinstein -- promoted their estate planning services between 2001 and 2004 using telemarketing, newspaper ads, mass mailings, senior expos and local seminars held in restaurants, country clubs, synagogues or other facilities throughout the state. The attorneys allegedly used insurance sales agents to sell estate planning products.

According to the lawsuit, the defendants encouraged consumers to meet with their "Estate Planning Advisors" or "Certified Senior Advisors" to explain "What Everyone Should Know About Estate Planning Techniques, Financial Planning Strategies" and "Estate Preservation." The promotional materials led consumers to believe that they were receiving impartial estate planning advice, the attorney general said.

Consumers who attended the presentations or allowed the defendants into their homes, the attorney general's suit states, were advised to purchase a revocable living trust. The trust was presented as an estate planning document that was in the consumers' best interest, regardless of their individual financial holdings. Many were sold living trust kits for about $1,800, whether they needed them or not.

Consumers said they were unaware that the sales representatives were insurance agents who received commissions on the sales. In fact, the alleged victims said they were led to believe that the sales agents were lawyers or estate planners.

To encourage the sale of living trusts, the suit claims that the defendants used scare tactics and deceived consumers by falsely claiming that living trusts are superior to wills.

Pappert urged consumers who suspect that they were victimized in the alleged scheme to contact his office immediately by calling 1-800-441-2555 to obtain a complaint form. Consumers may also download a complaint form or electronically file a complaint by visiting www.attorneygeneral.gov.