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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA - page 7 / 18

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sign the Investor Application and mail – or personally deliver – the Application with a check or

credit card payment.

  • C.

    Misrepresentations and Omissions Relating to the Investment Plans

    • 1.

      Undisclosed Massive Commissions, Fees and Costs

    • 23.

      The Defendants have failed to disclose to investors that their entire investment

program is a sham designed to enrich themselves and their sales agents. Instead of investing

money as they promise, the Defendants’ accounting documents show they use as much as 90

percent of investors’ funds to pay sales agents’ commissions, administrative fees, and other

costs.

24.

For example, the accounting documents show Pension Fund and PFA Assurance

are charging Liberty Trust investors average fees and costs of 80 percent on first-year

investments, leaving only about ten percent of investors’ funds actually used to purchase mutual

funds and nine percent for insurance. In some cases, the Defendants invested nothing, instead

using 100 percent of investors’ funds to pay sales agents’ commissions and other fees and costs.

The Defendants use PFA International to pay the sales agents these exorbitant commissions.

25.

Documents pertaining to the one-time contribution plan, The Capital Plan, show

the Defendants charge investors average fees of 30 percent on each investment – 15 percent as

commissions and 15 percent as net profit to Pension Fund or PFA Assurance.

26.

Neither the brochures nor the Investor Application – the documents investors see

before investing – disclose these outrageous commissions, fees, and costs. After investors

complete and execute the Investor Application and send in their first payment, they receive a

“Guide

to

Plan

Provisions”

(“Guide”).

The

Guide

contains

more

information

about

the

retirement trust plans’ investment and insurance components, but in contrast to the pre-purchase

7

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