Misrepresentations about Relationships with Banks and Broker-Dealers
Pension Fund and PFA Assurance have marketed as one of the more appealing
aspects of their investment program their supposed affiliations with numerous banks and
brokerage houses, who allegedly act as trustees or custodians of investors’ accounts.
For example, the Defendants’ current brochure states that some important reasons
to invest are “total safety, because the money deposits are received directly by HSBC Bank,
USA . . . total protection, because the Liberty Trust Plan is backed up by a legal instrument
called a trust . . . your investment will always be protected.”
Current Investor Applications refer to HSBC as a plan trustee, and Defendants’
website referred to Raymond James as “custodial bank.” When the Defendants maintained
relationships with Lehman Brothers and Merrill Lynch, the client applications referred to these
institutions as “trustees” and “trustee banks.”
However, these representations are false.
None of the financial institutions has
ever served as a trustee or custodian for investors. With the exception of SunTrust, none of these
institutions has ever had a direct agreement or any contact with a fund investor. Defendants
merely opened standard bank or brokerage accounts in the name of Pension Fund, through which
they pooled investor money to purchase shares in mutual funds. The Defendants have never
opened individual accounts in investors’ names, and investors do not receive statements or
confirmations from the financial institutions.
To perpetuate their lies about their relationships with financial institutions, the
Defendants forged investment certificates with counterfeit seals and issued them from Pension
Fund’s offices in Coral Gables, Florida. None of the financial institutions authorized Pension
Fund or the other Defendants to use their trademarks. The unauthorized certificates were printed