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Saturday, May 25, 2024 | Back issues
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‘Life Coaches’ Called Ponzi Operators

     AUSTIN, Texas (CN) - "Life coaches" used a string of shell companies to run a Ponzi scam that raked in $8 million to $20 million, investors claim in a class action.

Named plaintiffs Cheri Lucas and April Fisher sued Coaching by Coral LLC dba The Secret to Life Coaching and CEOs Coral Rose Grant fka Coral Rose Thomas and Gary McGonagle Grant II aka Mac Grant. Multiple affiliates and purported shells are also named as defendants.

Lucas and Fisher seek to represent a class of "all persons who have entered into 'coaching contracts' or 'investor contracts' with any of the defendants."

The Secret to Life Coaching says on its website that its mission is to "help people design and live the life of their dreams." CEO and founder Coral Grant says on the website that she "learned the secrets to be able to live every day on purpose and manifest her absolute dream life in every way." She uses coaching, a TV and radio show, articles, speaking engagements, and writing to teach people these secrets.

Actually, Lucas says in the complaint: "Coral's fraudulent tendencies did not come to her fully formed from the ether. She learned at the feet of her mentor, Kevin Trudeau - a career fraudster and federal felon. On information and belief, Coral has visited Trudeau in federal prison to consult with him about her scheme. Coral's criminal activities seem to have been too much even for Trudeau, since plaintiffs have been informed that Trudeau told her to stop.

"In fact, Coral is so close to Kevin Trudeau that she has raised tens of thousands of dollars for the 'KT Legal Defense Fund.' 'KT' stands for Kevin Trudeau."

(Trudeau made a fortune through so-called "infomercials" and books promoting "cures" that "they don't want you to know about." According to publicly available information, he has been convicted of larceny and credit card fraud, was fined $37 million by the FTC for violating a settlement order, and is serving 10 years in federal prison for contempt of court.)

Mac Grant, Coral Grant's husband, is an instructor for the Men's Leadership Training Courses in The Secret to Life Coaching Company. He calls himself a successful entrepreneur, motivational speaker and master coach.

According to the Jan. 18 lawsuit, Coral Grant has been using her companies since 2010 to sign up independent coaches under commission agreements, i.e. "coaching contracts." The coaches are promised a commission percentage or fee for each life coaching client signed up, for signing up other coaches, and for teaching life coaching clients.

The Grants also invited people (coaches, members, clients) to become "investors," i.e. give them flat sums in exchange for non-specific future returns, according to the complaint.

But Lucas claims the Grants "engaged in a pattern of pocketing investors' money instead of using it for any legitimate business purposes," and also took the commissions and fees owed to the coaches under their contracts.

In brief, the complaint states: "Coral and Mac Grant are a threat to the public. They funnel all coach and investor money directly to themselves, without any regard for legality, corporate formalities, securities laws, or any semblance of business judgment or morality. In total, the Grants have stolen over $8,000,000 - and possibly more than $20,000,000 - in money and services from their coaches and investors through their scheme."

Lucas claims the defendants owe her at least $180,000.

Fisher says they owe her at least $5,000.

"The Grants live a lavish lifestyle with their ill-gotten gains," the complaint states. "They lease multiple mansions around the United States, fly around the country in chartered private jets, and lease or own luxury vehicles (Bentleys, for example). Put simply, Coral and Mac Grant arc con artists living high on the hog with the millions they have stolen from their unsuspecting contractors and investors." (Parentheses in complaint.)

The Grants also violate federal laws by not registering securities offerings for their companies, by not filing Form Ds for the offerings, and by filing fraudulent or incomplete tax returns to cover up their illegal income, according to the complaint.

They continually recruit new coaches, clients, and investors to make up for the money they take out of the companies, and use new cash flow to falsely represent that their companies are successful, profitable, and sustainable, the complaint states.

When Coaching by Coral had trouble obtaining credit due to the Grants' pilfering of company funds, Coral emailed the coaches and said that she had to cancel their contracts due to "recent events," according to the complaint.

Some investors and coaches were allegedly told to make payments to one of two shell companies. The class calls it "plain that this arrangement is a continuation of the Grants' Ponzi scheme," but that the Grants' so-called "puppet" has refused to let them access profits in the new shell to which their investment contracts were unilaterally transferred.

"No, the shareholder arrangements that were to provide a percentage of profits made by TSTLC [Coaching by Coral] were not valid, and TSTLC is unable to make any income due to the financial situation that occurred," an email quoted in the complaint states.

But the class notes: "The 'financial situation that occurred,' of course, is that Coral and Mac Grant pocketed their investors' money to live like royalty."

Later in the email to the victims says: "Hopefully you followed the first rule of investing and didn't spend money you couldn't afford to lose."

Attempts to reach the defendants for comment through email addresses listed on the companies' websites were met with an auto-reply saying The Secret to Life Coaching Company has been dissolved and that Coral and Mac Grant are continuing their training through Infinity Manifestation.

Lucas and Fisher seek class certification and at least $10 million in actual and statutory damages for fraud, theft, racketeering, breach of contract, breach of fiduciary duties, gross negligence and deceptive trade, plus $20 million in punitive damages and $250,000 in attorney's fees.

They are represented by Camden Chancellor in Odessa and Arnaldo Pereira in Austin.

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