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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA - page 9 / 18

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  • 2.

    Misrepresentations about Relationships with Banks and Broker-Dealers

  • 29.

    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.

30.

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.”

31.

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.”

32.

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.

33.

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

9

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