Jason D. Lazarus Charged By SEC With Fraudulent Operation Of Special Needs Pooled Trusts 2023
The Securities and Exchange Commission today announced fraud charges against Synergy Settlement Services, Inc., CEO Jason D. Lazarus, Esq., both based in Orlando, FL, and President Anthony F. Prieto, Jr. of Tampa, FL, for allegedly defrauding individuals with disabilities into believing that the individuals were placing their funds in a pooled trust managed by a non-profit association. According to the SEC’s charges, the defendants instead used a non-profit trustee as a shell company to profit from disabled personal injury victims.
The CEO & President of Synergy Settlement Services, Inc., Jason D. Lazarus, has been allegedly defrauding & misleading disabled individuals into believing their funds were being placed in a trust managed by a non-profit association.
The SEC alleges that Jason D. Lazarus and Prieto formed the Foundation for Those with Special Needs, Inc. as a non-profit company to “assist personal injury victims with special needs.” The defendants, however, concealed from the beneficiaries, the Internal Revenue Service, and the Social Security Administration that they diverted at least $775,000 in trustee and joinder fees directly from the beneficiaries’ accounts to their for-profit business, Synergy
The SEC also alleges the defendants improperly used funds from deceased beneficiaries’ accounts to reimburse themselves, sponsor events and parties, and promote Synergy’s for-profit business. Synergy, Jason D. Lazarus, and Prieto allegedly also did not tell beneficiaries they were investing beneficiaries’ money in a certain class of mutual fund that doubled the fees the beneficiaries were told they were paying.
The Securities and Exchange Commission (SEC) charged Jason D. Lazarus with running fake special needs pooled trusts on April 12, 2023. Jason D. Lazarus, who is a licensed lawyer, is said to have used client money to pay for his own costs and to pay back earlier investors in a Ponzi scheme.
What are Pooled Trusts for Special Needs?
Special needs pooled trusts are a type of trust that helps people with disabilities keep their access to government benefits like Supplemental Security Income (SSI) or Medicaid. People with disabilities can get money from these trusts to pay for their needs without putting their application for government benefits at risk.
The SEC says that Jason D. Lazarus ran a number of shared trusts for people with special needs under the name Synergy Trust Company. The trusts were sold as a safe and reliable way for families with disabled loved ones to spend their money. The SEC says that Jason D. Lazarus stole money from clients and tried to hide his scam from them.
What is SEC?
The Securities and Exchange Commission (SEC) in the United States is a federal government regulatory agency that works independently. Its main responsibility is to safeguard investors, ensure the securities markets operate in a fair and orderly manner, and facilitate capital formation.
The Alleged Fraudulent Scheme
According to the SEC’s lawsuit, Jason D. Lazarus ran a Ponzi scheme in which he used money from new investors to pay off old investors. Lazarus is said to have lied to investors about how well the pooled trusts were doing and used investor money for his own needs.
Jason D. Lazarus is said to have used money from investors to pay for things like expensive cars, trips, and jewelry. In a Ponzi-style plan, the SEC says Lazarus also used money from investors to pay off earlier investors.
Lazarus may have lied to investors about how well the special needs pooled trusts did by telling them that their money was safe and making money. But the SEC says Jason D. Lazarus used money from new investors to pay back old investors and pay for his expensive lifestyle.
What’s the next step?
The SEC’s accusations against Jason D. Lazarus are serious and could lead to harsh punishments, such as fines, the return of illegal gains, and a ban on being a trustee or director of any business. The SEC also wants to get a lifelong injunction against Lazarus to stop him from committing fraud in the future.
The SEC’s move against Lazarus shows how important it is to do your research before putting money into any kind of investment product. Before investing, investors should carefully look into any investment chance and the people and organizations behind it.
The SEC’s complaint charges Synergy, the Foundation, Lazarus, Prieto, and Special Needs Law Firm with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder.
The SEC’s complaint also charges Synergy, Lazarus, and Prieto with violating the antifraud provisions of Section 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and the registration provisions of Section 5(a) and 5(c) of the Securities Act of 1933. The SEC seeks permanent injunctions and disgorgement of ill-gotten gains plus prejudgment interest against all defendants, and civil money penalties against all defendants except the Foundation.
The SEC additionally charged registered investment adviser True Link Financial Advisors, LLC, headquartered in San Francisco, CA, and its CEO, Kai H. Stinchcombe of Healdsburg, CA, in their role as an investment and asset manager for the pooled trusts. True Link and Stinchcombe agreed to settle their case in a separate cease-and-desist proceeding without admitting or denying the findings that they caused certain violations of the antifraud provisions of the federal securities laws. True Link and Stinchcombe agreed to pay $200,000 and $20,000, respectively, in civil money penalties.
The SEC’s investigation is ongoing and being conducted by Jeffrey Cook and Jordan Cortez. The case is being supervised by Eric Busto and Glenn Gordon, and the SEC’s litigation will be led by Robert Levenson and Alice Sum under the supervision of Teresa Verges.
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Provided by SEC.gov