Lerman Firm Featured Prominently in The Economist

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Article on Affinity Fraud and Ponzi Schemes Appears the Same Day That Principal Cathy Lerman Comments on the Dangers of Self-Directed IRAs in The Star Tribune

I applaud The Economist and The Star Tribune for their excellent journalism and for calling attention to the deceptive methods utilized in Ponzi schemes to swindle victims.

The Lerman Firm, a South Florida-based law practice, is prominently featured in a feature story appearing in the latest edition of the highly respected magazine The Economist. The article, authored by reporter Matthew Valencia and titled “Fleecing the Flock,” explores how and why Ponzi perpetrators bilk victims by employing affinity fraud.

The Lerman Firm, as well as Schiller & Schiller, PLLC law firm in Raleigh, North Carolina, which serves as local trial counsel, and Salpeter Gitkin, LLP in Fort Lauderdale, Florida, which serves as co-counsel, are currently representing victims in a class action lawsuit filed in Federal Court in Raleigh, North Carolina (Case Number 5:11-cv-00547-BO). The suit alleges that Ephren W. Taylor, Jr. and others perpetrated a Ponzi scheme against hundreds of investors, many of whom lost their life savings as a result. Taylor, who described himself as “America’s youngest African American CEO of a public company,” and claimed he was an “ordained minister,” targeted mainly members of African American churches.

The Lerman Firm also appeared today in an article in The Star Tribune, Minnesota’s largest daily newspaper. That article explored how self-directed IRAs are being misused by fraud promoters to facilitate Ponzi schemes. The Star Tribune article quotes Cathy J. Lerman, Founder of Cathy Jackson Lerman, PA, and notes that potential investors in Ponzi schemes are not aware of how little protection is actually provided by self-directed IRA custodians. The Taylor class action suit also names Equity Trust Company, a large self-directed IRA custodian, as a co-conspirator.

“I applaud The Economist and The Star Tribune for their excellent journalism and for calling attention to the deceptive methods utilized in Ponzi schemes to swindle victims,” said Lerman. “Through religious affinity fraud Ponzi operators convince their victims to trust them because of their ‘mutual’ religious affiliations. By requiring their targets to use self-directed IRAs, which are not required to audit the actual value of the investment accounts or even to verify that investments are made, Ponzi schemers are able to abscond with their victim’s money and extend the length of time their scams go undetected. Hopefully these articles will help call attention to these issues, reach victims, and educate the broader public about this kind of fraud,” said Lerman.

The full text of the Class Action Lawsuit against Ephren Taylor, Equity Trust and others, as well as the articles by The Economist and The Star Tribune are available in the Newsroom section of http://www.lermanfirm.com. Cathy Lerman continues to make herself personally available to talk with victims with first-hand knowledge of the Taylor/City Capital Ponzi schemes, as well as individuals with information that may assist the litigation team in pursuing justice for these victims.

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Evan Nierman
Lerman Law Firm
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