MARSHALL, Texas (CN) – A civil RICO complaint claims the Millennium Marketing Group defrauded more than 500 people nationwide in a $300 million ERISA scam. The three named plaintiffs say they were defrauded of $397,000.
The Eye Consultants of Northern Virginia and two doctors say the scheme was created by longtime insurance salesmen Norman Bevan and Scott Ridge, “and their attorney, Kathy Barrow.” Barrow, however, is not named as a defendant.
“This is a civil RICO mail/wire fraud case in which the defendants defrauded 500+ people nationwide out of $300+ million by using an enterprise purporting to be an ERISA employee welfare benefit plan,” the complaint states. In a footnote, it adds, “It is not an ERISA plan as the Court in the Murphy case … already has found.”
The Murphy case is Murphy et al v. Millennium et al.” in 193rd District Court of Dallas County, Texas “which has been going on for two years.” A second footnote to this case continues: “In Murphy, the undersigned represent 19 plaintiffs and intervenors against 19 defendants. This RICO suit is being filed because the discovery in Murphy has revealed the Defendants are using the Millennium Plan as a criminal enterprise which, stripped to its essentials, is a nationwide theft ring. The Defendants have used the Millennium Plan as a RICO enterprise to swindle millions of dollars from hundreds of people.”
A slew of other corporations are also named as defendants, including Innovus Financial Solutions, Ridge Insurance, Republic Bank & Trust, Secureplan Administrators, Milliman Inc., American General Life Insurance, and The Guardian Life Insurance Company of America.
All the following allegations are taken from the 65-page federal complaint:
Republic Bank & Trust acted as trustee by holding the life insurance policies, sending monthly invoices and assisting in confiscation of money from the fraud victims. Guardian Life Insurance sued the Millennium Plan as a sales outlet for whole life insurance plans. In addition, Guardian Life sent its insurance agents to one-day seminars known as Millennium Universities, to instruct people on how to market the fraudulent policies.
The sales pitch claimed that clients’ investments would be returned with interest, would be tax-deductible and protected from creditors under a 419A plan.
The 419A plan has been common ground for insurance scams, according to the complaint. In a bona fide 419A plan, the amount of the employer’s contribution must be reasonable in relation to the benefit received.
One plaintiff, Dr. Michael Goldberg, claims he was defrauded in a whole life policy with a face value of $2,100,399 for which he was paid about $100,000 a year.
The IRS says the Millennium Plan was used as a fraudulent device and is investigating Barrow, Bevan and Ridge under 26 USC §6700, “Promoting abusive tax shelters,” according to the complaint.
The plaintiffs are represented by Anthony Vitullo with Fee, Smith & Sharp of Dallas.