(Vocus) May 19, 2010
Structured settlements were not involved in a recent Florida-based Ponzi scheme, which attracted intense national media coverage that stated that they were at the crux of the fraud, according to industry expert Andrew Cravenho, head of Settlement Quotes LLC.
A Ft. Lauderdale attorney named Scott Rothstein has been charged with numerous felony counts as the mastermind of a $1.2 million dollar Ponzi scheme where he obtained funds from investors through bogus investments and pending lawsuits. (United State District Court Southern District of Florida Case No. 09-60331)
Media reports of the alleged scheme have contained many errors, said Cravenho, an industry expert on structured settlements and CEO of Settlement Quotes. Rothstein's fraud involved short-term employee discrimination and sexual harassment lawsuit "settlements" that he claimed he won and was managing for his unsuspecting clients, Cravenho said.
These were not structured settlements, defined as negotiated agreements in a tort action to provide payments over time. It happens after a court process where one party was hurt and the other party is told to pay. The matter could be personal injury, worker’s compensation for an on-the-job injury, property loss, wrongful termination or a wrongful death claim where a spouse and/or minor children are seeking compensation for lost wages and intangible support, or similar issues. Structured settlements are not usually considered for minor or short-term injuries.
Cravenho said that the Rothstein scheme is very different than the legitimate, structured settlement fixed-term annuity transactions, in that:
- Fixed-term annuity transactions must be court-approved.
- With a legitimate structured settlement, an insurance company guarantees and makes all payments.
- Structured settlements are independently verified by an insurance company, the annuity issuer.
- The Rothstein Ponzi scheme involved short-term lawsuit settlement payments that are not IRS-defined structured settlements (IRS Code Section 130).
Cravenho is CEO of Settlement Quotes, LLC, a structured settlement factoring exchange with a unique business model that allows it to give annuitants the best prices.
About Settlement Quotes
Settlement Quotes is a market leader in providing a marketplace for the purchase and sale of structured settlement payments and other annuities in every state. It provides quotes on structured settlement and other insurance annuity payments.
For more information, visit http://www.structuredsettlement-quotes.com.