Boston Accident Injury Lawyer Blog

Massachusetts Investment Fraud Lawyer, Keith L. Miller, reviews the latest court filings by the Receiver in the  SEC vs. Millennium Bank action now pending in the U.S. District Court for the Northern District of Texas:

It appears that the Millennium Bank Receiver has begun the process of liquidating assets seized as a part of the SEC action against Millennium Bank, its affiliates, and the individuals who helped perpetrate this multi-million dollar ponzi scheme. On May 22, 2009, a set of motions were filed in the Northern Texas U.S. District Court seeking specific authority to sell off a range of personal property items. The Court has yet to rule on the motions

For example, one motion has been filed, seeking court authority to sell off the infamous  Millennium jet airplane, which was seen and photographed in 2008 and 2009 in places as far and wide ranging as Caracas, Venezuela, Geneva, Switzerland, and Lyon, France. The plane flies no more and is presently stored and maintained in a hangar in Atlanta, Georgia.

The aircraft apparently has an appraisal of $5.6 million, but the Sovereign Bank has a secured lien of $4.3 million and the Receiver seeks the Court's authority to sell it for a price not less than $3.7 million, which would still leave a debt owed to the bank. Thus, the sale of this valuable asset will bring no money to the Receiver's estate, or end up reimbursing any monies to swindled investors.

Jewelry, cars and wine collections and a home owned by Jackie Hoegel are in the list of items, which the Receiver seeks to liquidate, some requested to be sold on Ebay. However, it seems unlikely that this collection of assets, and the hundreds of thousands, which might come in, will even put a small dent on the hundreds of millions taken as the result of this fraud.

Continue reading "Millennium Bank Receiver Seeks to Sell Assets of Perpetrators" »

A closer look at the Millennium Bank Ponzi Scheme: Boston trial lawyer, Keith L. Miller, takes a look at the facts involving Caribbean based Millenium Bank, which operated out of offices in Napa, California until closed by the SEC in March, 2009.

William J. Wise had a problem. In late 2003, his fledgling bank in tiny St. Vincent and Grenadines (SVG) was not generating sufficient income from investor deposits to support either the bank's overhead or his own extravagant personal lifestyle. The island's banking regulators had moved to suspend Millennium's license to operate, and Wise was scrambling.

After filing an appeal of the bank's suspension order, Wise appears to have struck a deal with the SVG banking authority, which gave the bank new life. The bank would re-capitalize and an outside controller would be put in place to oversee the Millennium's operations. Many believe that the SVG banking authority made the deal only after Mr. Wise had made donations, some of it cash, to select members of the ruling party on the island.

At this point Wise needed a new strategy. And indeed it appears he came up with a new "business plan". SVG would remain the titular base of the bank's operations, but banking activity, and in particular the movement of money would go elsewhere, avoiding the watchful eye of the controller and the SVG authorities. Wise would move operations to Napa, California, and create fictitious Limited Liability Companies (LLC's) in Las Vegas, Nevada, based loosely on Millennium's purported Swiss parent, United Trust of Switzerland, in order to open bank accounts there. 

To promote new business, he would combine an aggressive internet and print advertising campaign with an irresistible banking product, "safe" high interest Certificates of Deposit ("CDs"), which no American bank could match or even approach.

The Millennium line of CD products could easily be found on a newly created interactive website, whose sponsored links began to regularly and prominently appear on popular search engines such as Google and Yahoo. Potential customers would type in keywords seeking "high interest CDs", and Millennium's three line ad would appear with a link to the bank website.

 Toll free numbers were provided on the Website, which directed calls to the Napa offices, and apparently the calls started coming in. Reluctant callers were referred to several U.S. based Milllennium Bank representatives, whose job was to reassure these potential investors and close new business, earning commissions on the gross amount of the monies deposited. These "finders" were authorized and instructed to develop personal relationships with clients, often traveling to have face to face meetings. Customers were assured that their money was safe, as the representatives advertised that they too were investors.

Continue reading "Millennium Bank Ponzi Scheme: "Show me the Money, Willie"" »

Massachusettts Personal Injury Attorney, Keith L. Miller, reviews and analyzes a recent U.S. First Circuit Court of Appeals decision. This is the second part of a two part blogpost, involving the denial of an employee long term disability claim, where the insurer both reviewed and paid claims, allegedly giving rise to a conflict of interest. The First Part reviewed facts leading up the to the employee's application for long term disability insurance, which the insurer rejected, and resulted in an action in Federal District Court.

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In June of 2002, the plaintiff employee in this case filed for long-term benefits. She would qualify as disabled under the long-term plan if, for two consecutive years, she was unable to perform the material and substantial duties of her occupation, and subsequently was unable to perform "the material and substantial duties of any occupation". The same Liberty nurse who had denied her earlier claim, also reviewed this file, which contained medical support for a finding that the plaintiff's symptoms had become worse. She had also completed an activities questionnaire in which she claimed to have severe restrictions on her ability to sit, stand, walk, drive, and concentrate.

In her second review, the Liberty Mutual nurse discounted the IME report, suggested that the plaintiff's condition was not as grave as the completed questionnaire implied, concluded that the plaintiff did not qualify for benefits and Liberty denied the claim. The plaintiff requested further review. Liberty responded by hiring a private investigator to observe the plaintiff's activities. The investigator produced reports and photographs showing that the plaintiff was active.

With this information, Liberty then utilized a referral service furnishing physicians to evaluate the functional abilities of claimants. One of its physicians concluded that the plaintiff was capable of working full-time in her primarily sedentary position. On December 10, 2002, Liberty reaffirmed its earlier denial of benefits.

Fourteen months later, an administrative law judge ruled the plaintiff was entitled to social security disability benefits retroactive to her last day of actual work. The judge premised this decision on a subsidiary finding that the plaintiff was disabled within the meaning of the Social Security Act. Although the definition of disability under the Act differed from the definition of disability under the Liberty's plan, the plaintiff forwarded the SSDI ruling to Liberty, along with a further report from her rheumatologist, seeking reconsideration of the denial.

Liberty refused to reverse its decision, which resulted in the district court action. The U.S. District Court granted summary judgement to Liberty, deciding that Liberty had not abused its discretion in denying the claim. On initial appeal, the Appeals Court affirmed, but then the United States Supreme Court made a ruling, which changed the substantive law in the area and resulted in a successful request for rehearing of this case.

In rehearing the case, the Court analyzed the Supreme Court's decision in  Metropolitan Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008). There, the Supreme Court had reviewed a denial of benefits by an administrator that passed judgment upon and paid claims under an ERISA-regulated plan.  It concluded that courts should recognize that a conflict exists whenever a plan administrator, whether an employer or an insurer, is in the position of both adjudicating claims and paying awarded benefits.

Continue reading "Conflict of Interest Evident when Disability Insurer Both Reviews and Pays Claim for Benefits Says First Circuit Court of Appeals" »

This is the first of a two part Blogpost, where Massachusettts Personal Injury Attorney, Keith L. Miller, reviews and analyzes a recent First Circuit U.S. Court of Appeals decision. The case involves an employee disability claim and issues pertaining to a perceived conflict of interest.

In this case, the U.S. First Circuit Court of Appeals remanded a case to the District Court, where an employee challenged the denial of her request for long-term disability benefits. The Plaintiff alleged that the employer's insurer, who denied her benefits, both reviewed and decided on her eligibility and was responsible for the payments, which was a conflict of interest. She also alleged that a physician referral service the insurer utilized was biased, given it generated large revenues from its reviews, and usually recommended in favor of the employer.

The Court justified the remand, based on a recent decision of the United States Supreme Court in Metropolitan Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008). The Supreme Court had previously reviewed a denial of benefits by an administrator that passed judgment upon and paid claims under an ERISA-regulated plan.  It concluded that courts should recognize that a conflict exists whenever a plan administrator, whether an employer or an insurer, is in the position of both adjudicating claims and paying awarded benefits.

In this case, in 1996 a primary care physician had diagnosed the plaintiff employee as suffering from fibromyalgia, which is a disorder involving muscle and connective tissue pain. Patients note heightened and painful response to gentle touch, as well as debilitating fatigue, sleep disturbance, and joint stiffness. The plaintiff was a group leader employed by GenRad, Inc. In spite of the diagnosis, she continued to work. At the time she was covered under a short-term and a long-term disability insurance plan supplied by Defendant, Liberty Life Assurance Company (Liberty), who also administered both plans.

Continue reading "Boston Personal Injury Attorney Reviews Federal Decision Acknowledging Conflict of Interest when Disability Insurer Reviews Request and Also Pays Employee Benefits" »

Boston commercial and personal injury trial Lawyer, Keith L. Miller, takes a look at Caribbean based Millenium Bank, the latest banking Ponzi Scheme to have bilked U.S. and other investors seeking big returns on their investment monies.

On March 27, 2009, St. Vincent and the Grenadines (SVG), by its International Financial Service Authority (IFSA), appointed KPMG-International to assume control over the affairs of Millennium Bank ("Millennium") in order "to preserve records and assets". The IFSA was acting on information obtained from the U.S. Securities and Exchange Commission (SEC), after the SEC had issued a civil complaint against Millennium Bank, a number of affiliates and individual participants, including William J. Wise, Kristi Hoegel and Jackie Hoegel.

This, however, was not the first time that the IFSA had taken action gainst Millennium. In fact, in 2004, the IFSA had legally moved to revoke Millennium's license, a decision the SVG government later reversed, allegedly after the prime minister of SVA intervened on its behalf. Court documents indicate that William Wise, representing himself as a duly licensed Canadian legal counsel appealed the suspension, and ultimately prevailed.

This is when things ostensibly turned for the better for the once fledgling offshore bank. Undertaking an aggressive international marketing campaign led by Wise, deposits grew dramatically based on the promise of high interest CDs, rates which no U.S. bank could even come close to matching. It appears that the plan was successful as deposits grew in dramatic fashion.

Unfortunately for investors, who believed they were buying legitimate certificate of deposits in exchange for their cash, it appears that the bulk of the funds were being diverted to accounts held by Wise, principally at Washington Mutual Bank in Las Vegas, Nevada, and used for the personal needs and extravagances of these individuals.

Continue reading "Millennium Bank Scam: William Wise successfully reversed the St. Vincent and Grenadine Banking Authority's attempt to revoke its License in 2004" »