LOS ANGELES (CN) - Voyager Financial Group defrauded military veterans and the public by claiming it can buy and sell unregistered securities based on VA disability and retirement benefits, a class action claims in Federal Court.
Lead plaintiff Lawrence Vicari sued Voyager Financial Group, VFG LLC, and five of their top officers: Brandon Kogut, Glenn Hopkins, Brittney McClinton, Jonathan Sheets, and Mackenzie Young.
Vicari claims the Delaware LLCs, operating out of Little Rock, sold unregistered securities they call "Veterans Benefits Contracts."
Vicari says he paid $62,574.29 to acquire the disability benefits sold by a veteran in Virginia. Vicari was to get $90,000 in return: 120 monthly payments of $750 each, according to the purchase application attached as an exhibit to the complaint.
Voyager describes itself on its website as "a national distributor, broker, and consulting firm for a diverse array of products, services, and contracts in the financial services arena. VFG specializes in the factored income stream market, working to satisfy the needs both of individuals and entities receiving structured payments and those wishing to take advantage of the stability and return on investment that these products can bring. ...
"By acting as a liaison between the individuals receiving structured incomes and those wishing to purchase those factored streams, Voyager Financial Group is able to utilize these relationships in such a way as to bring maximum equity and profitability to all sides of the factored income stream transaction," according to its website, checked this morning.
But the whole deal was illegal, Vicari claims.
The complaint does not estimate how much money changed hands, or how much was lost or gained. Nor does it state where the individual defendants are. It identifies them by job title: Brandon Kogut as chief officer of VFG; Glenn Hopkins as director of business development; Brittney McClinton as "director of compliance"; Jonathan Sheets as "owner of VFG"; and Mackenzie Young as "director of case management."
Vicari claims that Voyager advertised its illegal, unregistered securities "through the use of publicly available websites and spreadsheets with details about available deals to induce plaintiff and the class to enter into illegal and irrevocable investment contracts."
The complaint states: "VFG defendants' business includes finding individuals who are receiving structured payments, pensions and/or disability incomes from the government, and offering a lump sum in exchange for their promise to turn over all or a portion of their payments, in the form of the securities, which are investment contracts. These individuals, or 'sellers,' are often ex-military, injured during service and in need of a large amount of money quickly. VFG enters into contracts with 'sellers" which assign VFG the right to sell the securities once an investor is found. The investor, or 'buyer,' often retired, is looking for a secure, risk-free investment."
Vicari is one such buyer, he says. "Another such investor is former Oregon Governor Neil Goldschmidt," who is not named as a party to the complaint.
Vicari claims that the Voyager defendants claim that these securities are legal, risk-free, guaranteed by the United States, and will benefit veterans, though in fact the sale of these securities is "not lawful, was not risk-free, was not guaranteed to the investor by the United States government, would not benefit veterans and would in fact lead to loss of all or some of the investors' money and gain to VFG defendants. This scheme in fact did lead to the loss of all or some of the class members' money invested and to unlawful gain by FVG defendants. VFG fraudulently failed to disclose the true facts to plaintiff and other class members. Further, some of the payments, which the owner of the veterans' benefits cannot lawfully assign, have now been stopped and cannot be lawfully or effectively secured to plaintiff or the class members. VFG defendants failed to disclose to plaintiff and the class members that such contracts were illegal and irrevocable [sic] upon breach, were not frisk free, were not guaranteed to them by the United States government, and would not help veterans, who were also innocent and induced to enter into this unlawful scheme to defraud innocent investors of their money. VFG defendants benefited and received money from the sale of the securities.
"Plaintiff has reason to believe that defendant VFG fraudulently induced a large number of investors across California and other states to purchase securities during the class period."
The class period is Jan. 31, 2008 to Jan. 31, 2013.
Vicari claims the defendants violated securities laws.
The complaint states that Voyager "makes money by the sale of securities in the form of contracts for the right to receive Veterans Administration and other military structured payments, awards, and/or disability incomes owned by veterans and military retirees throughout the United States ('Veterans Benefits' or 'Veterans Benefits' Contracts'). These veterans benefits contracts are securities under the federal securities laws. FVG defendants have not registered these securities with the federal government as is required and have not complied with the federal law in connection with the sale of securities. The veterans benefits are paid by the United States government to the veterans and are guaranteed to the veterans. These veterans benefits and the right to the income from the veterans' benefits or securities are sold by and through VFG to innocent investors ('Investors' or 'Class Members') throughout the United States by the VFG defendants and their agents, including to Mr. Vicari ('Class Representative'). VFG defendants are agents of the veterans. VFG defendants and their agents represent to the veterans that this is a lawful transaction and that they have the right to sell their interests for a lump sum now and that their interests in the veterans' benefits will be paid to class members. VFG defendants and their agents represent to the investors and class members that the purchase of the securities in the form of contracts for the right to military and Veterans Administration structured payments, awards, pensions, and/or disability incomes owned by veterans throughout the United States, is lawful, risk free, is guaranteed as long as the United States government is solvent and stands, and will help veterans, among other things ('Misrepresentations'). VFG defendants know or should know that these statements are false when they are made to their selling agents and know that the selling agents, as they instruct them to do, will in fact tell investors and class members that the purchase of securities in the form of the right to military and Veterans Administration structured payments, awards, pensions, and/or disability incomes owned by veterans throughout the United States is lawful, risk-free, is guaranteed as long as the United States government is solvent and stands, and will help veterans, VFG defendants and their selling agents know or should know that investors and class members will rely on the misrepresentations in selling and purchasing the securities."
Vicari seeks compensatory damages and costs for violations of the Exchange Act.
He is represented by Don Howarth, with Howarth & Smith.