Groups Prey On Seniors, Class Claims

DETROIT (CN) - Under the guise of offering estate planning and tax advice, Financial Services of America and the Area Seniors Adult Retirement Education Association "prey upon senior citizens" to "fraudulently convert their retirement assets" in a boiler-room "solicitation scam," a class action claims in Macomb County Court.

"This case concerns an industry specifically designed to exploit and prey upon senior citizens and/or retirees in order to fraudulently convert their retirement assets into unsuitable financial products under the guise of offering free tax and estate planning services," the complaint states.

Individual defendants include Richard David James, president and CEO of Financial Services of America, and Mark Kersten, a principal of FSA. James, Kersten and FSA "were authorized agents and/or representative of Allianz Life Insurance Company of North American and North American Company for Life and Health Insurance with regard to the purchase and/or sale of insurance contracts and/or annuity agreements," the complaint states.

"As part of the scam individuals were told that AREA (k/n/a/ APSA) was a nonprofit organization offering 'free tax and estate planning services' to its participating members. In reality, AREA - which encompasses at least one entity organized as a for-profit corporation - is nothing more than a boiler room telephone solicitation outfit for FSA."

It adds: "FSA encourages their agents to use manipulative and coercive tactics by rewarding them with unconscionable commissions which can be triple the normal rates paid on sale of typical investment products."

Also sued are America's Professional Services Association, America's Professional Services Financial, America's Professional Services of Michigan, Adult Retirement Education Association Area, and America's Professional Services.

Plaintiffs are represented by John Herman of Berkley, Mich.

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