SEC Sues Synergy Settlement Services for Defrauding Individuals with Disabilities
Financial Investigations ı By Marivic Cabural Summers
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The Securities and Exchange Commission (SEC) filed a lawsuit against Synergy Settlement Services, Inc. for allegedly defrauding individuals with disabilities.
The SEC also sued Synergy's CEO and largest shareholder Jason Lazarus, Esq., and its president and minority owner Anthony Prieto, Jr. The federal securities regulator also named Special Needs Law Firm PLLC and the Foundation for Those with Special Needs Inc., as defendants.
In the complaint, the Commission alleged that Synergy, Lazarus, and Prieto fraudulently operated two purportedly charitable pooled investment trusts with $46 million in assets from May 2015 to the present.
Lazarus and Prieto installed the Foundation for Those with Special Needs as the trustee of the pooled investment trusts. Their intention was to hide the fact that Synergy is a for-profit corporation; they are performing all the trustee functions, and profiting from the trusts' operations.
According to the SEC, all of the defendants violated the antifraud and registration provisions of the federal securities laws. They allegedly deceived more than 380 trust members (most have disabilities) by telling them that a non-profit organization is managing the pooled investment trusts so that they will remain eligible for Medicaid and SSI benefits.
In reality, the Foundation is a shell corporation with no operations or employees. Synergy, Lazarus, and Prieto jeopardized the trust members' Medicaid and SSI benefits because they performed the trustee functions of the Foundation.
Additionally, the SEC alleged that Synergy, Lazarus, and Prieto improperly diverted at least $775,000 in trustee and joinder fees from trust members to the company. They also improperly used funds from deceased trust members' accounts for their personal benefits and other expenses. They violated their representations to the IRS and trust members that they will only use such funds to help people with disabilities.
Furthermore, the Commission alleged that the defendants lied to trust members with respect to the investment of the trusts' pooled assets. They concealed the fact that they are investing the pooled assets in a certain class of a mutual fund that doubled the fees being paid by trust members.
In a statement, SEC Miani Regional Officer Director Eric Bustillo said, We allege that Synergy Settlement Services and its executives took advantage of vulnerable victims with special needs, making unethical and illegal profits off of them."
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