Tuesday, February 6, 2018

Social Security Administration Drops Bomb on Kentucky

FRANKFORT, Ky. (AP) – Another 1,965 people in eastern Kentucky could lose their federal Social Security Disability Benefits because of  disgraced Social Security  attorney, Eric Conn, who made millions by bribing Social Security Judge David Black Daugherty to approve disability cases for his clients without holding a Hearing..
The Social Security Administration (SSA) plans to notify nearly 2,000 people in eastern Kentucky that they will have to defend their status in court. All of them are former clients of  flamboyant attorney, Eric Conn, who billed himself as “Mr. Social Security” in television ads before his empire crumbled beneath the weight of a federal investigation. About half of those new cases involve Conn and a convicted former Social Security Administrative Law Judge David Daugherty.

The new cases were identified by the Social Security Office of the Inspector General in November. U.S. Rep. Hal Rogers’ office said notifications will go out soon, but in a piecemeal fashion instead of all at once. People affected will have a hearing before an administrative law judge to determine if they can keep their benefits. People will have at least 30 days to gather evidence and hire attorneys. Disability payments will continue throughout the redetermination process.
These new batch of cases are in addition to the 1,800 cases associated with Conn’s law practice the federal government has already reviewed. Some of them have sued the government seeking to stop those Re-determination Hearings.

   (Pictured above at right, Former Social Security Commissioner, Michael Astrue)                                                                        
 “It is heartbreaking to witness the tragic impact that Eric C. Conn’s fraud scheme continues to have on the lives of people living in Eastern Kentucky,” Rogers said. “While I appreciate notification from the Social Security Administration, I question the need for additional redetermination hearings while litigation is still pending in the federal court system.”
Beginning in May 2015, the federal government suspended benefits for hundreds of eastern Kentuckians associated with Attorney Conn and Judge Daugherty, prompting panic in one of the poorest regions of the country heavily dependent on those checks. The government eventually restored those benefits until each person could have a hearing, but not before a few people killed themselves in what family members said was caused by the stress of losing their checks.
Eventually, 1,800 people had their cases reviewed and 1,500 had redetermination hearings. Of those 1,800 initial cases, about 53 percent kept their benefits “received favorable or partially favorable decisions,” Hinkle said.
Those hearings took more than a year to resolve. Nearly all of the people involved could not afford attorneys, prompting a nationwide search for lawyers who could represent them for free. Robert Johns, executive director of AppalRed Legal Aid, said 136 lawyers volunteered, including 59 from Kentucky.
“We thought we were done with that,” Johns said of those initial 1,800 cases. “We’re going to likely be gearing up for the same kind of effort to try to get these (new) folks some help.”
pleaded guilty to federal charges last year. But just before he was supposed to be sentenced, removed his electronic monitoring bracelet and fled. He led state and federal authorities on a chase for six months before he was captured in December at a Pizza Hut in Honduras. He’s now back in custody in Kentucky, where he faces more charges.
Ned Pillersdorf, an eastern Kentucky attorney who has represented several of Conn’s former clients, said he worried about the impact this second round of notices will have on the region.
“This will hit eastern Kentucky like a nuclear bomb,” he said.
Seventy-two years ago, death fell from the sky over Japan. Two years ago, death fell on Eastern Kentucky in the form of letters from the Social Security Administration. Some of the deaths came by way of suicides.
One can hardly think of a crime a Judge could commit more egregious than Bribery. For a Judge to use his position for personal gain is unforgivable. For a Judge to extort bribes from the lawyers that appear before him is a crime worthy of going to jail. Judge David Black Daugherty is such a Judge.

He extorted bribes from Attorney Eric Conn. Attorney Conn was found guilty of defrauding the Social Security Administration (SSA) and the people of the United States of about $60 Million. Judge
 Daugherty’s decisions in cases in which Conn bribed him obligated the Government to pay more than $550 million in lifetime SSA benefits. Daugherty pleaded guilty to two counts of receiving illegal gratuities.
 Daugherty was charged along with Attorney Eric C. Conn. Conn made bribery payments to Daugherty from October 2004 to April 2011. Conn pleaded guilty to one count of theft of government money and one count of payment of gratuities.
He was released on Bail, and placed under house arrest. He was forced to wear a GPS ankle monitor while awaiting sentencing. Sometime in June  he removed the  GPS monitor and fled the country.
He was arrested on December 2nd in Honduras and returned to the United States. A trial date for the escape charges has been set for February 2018.
Conn was a millionaire only a few months ago. Now he is broke and behind bars convicted of fraud and bribery. He dubbed himself “Mr. Social Security" and collected more than $7 million in payments for filing bogus Social Security Disability Claims from 2004 to 2011.
Conn had been sentenced in absentia on July 14 to 12 years in prison. He was ordered to repay $5.7 million to the U S Government (Treasury) and $45.5 million to the Social Security Administration Trust Fund. 
 A judge ruled that Conn violated the terms of his Bond when he escaped to Honduras. He has been  forced to forfeit the property put up for his Bail. That includes his Floyd County law complex, valued at $659,100.
The astonishing variety of social media postings and nonstop chatter about The Conn and Daugherty Cases have revealed a level of satire that has produced no shortage of laughter. This humorous interlude is in sharp contrast to the gloom that has descended over the Kentucky mountains. For more than two years the dark clouds caused by Conn and his colorful array of conspirators has stubbornly hung over the most poverty-stricken region in America.
Now that the laughter is dying down, some sobering facts are emerging. Almost a thousand of Conn's former clients have lost their Social Security Benefits. They have also lost their health insurance and are receiving ominous letters from the Social Security Administration demanding those who struggled to exist on $800 per month they must pay back amounts often in excess of $100,000. There have been confirmed suicides. How many? We may never know the true number for sure.
Kentucky feels a lot like Hiroshima and Nagasaki.We did not see it coming.

Thursday, January 25, 2018

Financial Advisor Dies In Motor Cycle Accident

Marshall motorcyclist dies after crash on Sunday

Gregory Dean Bodoh, a Marshall resident, died Monday 22 January as a result of a traffic accident on Sunday 21 January on John Marshall Highway east of The Plains, Virginia.

A Ford F-150 on Sunday, Jan. 21, turned left from Route 600 and westbound onto John Marshall Highway (Route 55) before it struck a 2013 Harley Davidson motorcycle in the eastbound lane.

The driver of the motorcycle was Gregory Dean Bodoh, 71 years old. He was flown to INOVA Fairfax Hospital, where he died early Monday morning, state police Sgt. Les Tyler said.

David P. Prause, 39, who lives near Broad Run, drove the Ford pickup.

“It’s still under investigation,” Sgt. Tyler said of the accident. “No charges have been currently placed.”

A 71-year-old Marshall man died Monday following a motorcycle crash on Va. 55.
The collision happened about 5:50 p.m. Sunday just south of Interstate 66.
Gregory David Bodoh, 71, of Marshall, was traveling east on 55 on a 2013 Harley Davidson when a westbound 2005 Ford F150 made a left turn in front of him, said state police Sgt. Les Tyler.
Bodoh was flown by helicopter to Inova Fairfax Hopsital where he died of his injuries about 1 a.m. Monday, Tyler said.
The truck’s driver, David P. Prause of Broad Run, has not been charged.
The crash remains under investigation.


A Ford F-150 on Sunday, Jan. 21, turned left from Route 600 and westbound onto John Marshall Highway (Route 55) before it struck a 2013 Harley Davidson motorcycle in the eastbound lane.

The driver of the motorcycle, Gregory Dean Bodoh, 71, got flown to INOVA Fairfax Hospital, where he died early Monday morning, state police Sgt. Les Tyler said.

David P. Prause, 39, who lives near Broad Run, drove the Ford pickup.

“It’s still under investigation,” Sgt. Tyler said of the accident. “No charges have been currently placed.”

A 71-year-old Marshall man died Monday following a motorcycle crash on Va. 55.
The collision happened about 5:50 p.m. Sunday just south of Interstate 66.
Gregory David Bodoh, 71, of Marshall, was traveling east on 55 on a 2013 Harley Davidson when a westbound 2005 Ford F150 made a left turn in front of him, said state police Sgt. Les Tyler.
Bodoh was flown by helicopter to Inova Fairfax Hopsital where he died of his injuries about 1 a.m. Monday, Tyler said.
The truck’s driver, David P. Prause of Broad Run, has not been charged.
The crash remains under investigation.

On the surface, Daryl Bank looks like a local businessman who has made it big.
His face is on the cover of books offering financial advice. His voice was broadcast on radio stations here and in more than two dozen other markets around the country.
His Virginia Beach-based company, Dominion Investment Group, has 10 offices in seven states and offers a "full range of financial services" with a network of more than 200 independent consultants, according to its website.
But Bank, a 1988 graduate of Chesapeake's Indian River High School, has been sanctioned by federal regulators, and his business is facing serious allegations in Virginia and Arizona.
In 2010, he was permanently banned from registering as a broker in the U.S., and his longtime business partner, Roger Hudspeth, a 1986 graduate of Portsmouth's Churchland High, was fined $5,000 and suspended for 30 days.
The Securities and Exchange Commission filed a civil complaint in April against Bank and others in Arizona, alleging they illegally took millions of dollars from clients.
On July 27, Bank was arrested in Port St. Lucie, Fla. Police say he pointed a gun at a woman who was trying to serve him with civil court papers.
And Thursday, at a State Corporation Commission hearing in Richmond, regulators could decide whether to temporarily stop Bank and several associates from operating in Virginia while investigators continue to look into allegations of fraud.
Despite the civil sanctions, Bank and Hudspeth have been pitching their services and selling illegal products, federal and state securities regulators say.
Bank's radio show, "Daryl & the Bull," aired Saturday afternoons on AM 1650 in Hampton Roads until mid-July, when the station pulled the program after being contacted by The Pilot.
Until recently, Hudspeth hosted free seminars for seniors about maximizing their Social Security benefits. And the company's YouTube channel - flush with recordings on topics from tax preparation to investing in diamonds - was updated as recently as July 31.
Two elderly Hampton Roads women told The Pilot they each have invested more than $100,000 with Dominion Investment Group. They spoke to The Pilot on the condition that their full names would not be used.
Barbara, a 77-year-old from Chesapeake, said she had worked with Hudspeth for a decade. She said she lost at least $50,000 when one company ran out of money, and she's been told by a Dominion employee she can't immediately access $25,000 invested in another company.
Ann, an 86-year-old from Hampton, said Bank was like a member of the family. She said she had no reason to believe her money was in jeopardy until the FBI came to her home to ask about the investments.
Afterward, she tried to pull her money out of a company, but she said Dominion told her it had to find another investor to buy her out.
Bank, 45, did not return calls seeking comment for this story. Hudspeth, 46, declined requests for an interview but confirmed Friday he no longer works for Dominion Investment Group. He recently had been listed as a partner on the firm's website.
Tom Sporkin, an attorney with Buckley Sandler LLP in Washington, who is representing Bank and several of his companies in the Arizona case, declined to discuss the allegations against his client: "I look forward to vigorously defending Mr. Bank and the Dominion entities in court."
It was not immediately clear whether Bank retained an attorney in Florida after his recent arrest. He posted a $20,000 bond and was released, according to a spokesman for the St. Lucie County Sheriff's Office.
Bank was charged with two felonies: aggravated assault with a deadly weapon and assault on an elderly person. Police allege he pointed a gun at a 69-year-old woman who was trying to serve him papers at his home. The documents were related to a suit brought against Bank and his wife, Catrina Davis, by Prudential Insurance Co., according to an arrest affidavit.
Ann, the Hampton woman, and her daughter, Lanette, sat in stunned silence in Ann's living room when The Pilot told them about Bank's arrest and his previous problems with regulators. He used to sit down with them once a year in that same room to go over Ann's portfolio.
"I find it hard to believe, even now," Lanette said. "Because he's like your best friend. He's like a part of the family when he comes over and he's chit-chatting and he's talking."
It's not clear when Bank and Hudspeth first met, but they were political science majors at Old Dominion University around the same time. Hudspeth earned his bachelor's degree in 1990; Bank graduated in 1993.
Bank first registered as an "investment adviser representative" and broker with UBS Financial Services Inc. in Virginia Beach in 1996, according to federal databases. Hudspeth registered with Next Financial Group Inc. as a broker in 2003 and as an investment adviser in Chesapeake in 2004.
From 2005 on, they were affiliated with the same firms, according to the Securities and Exchange Commission, the government agency that registers investment advisers, and the Financial Industry Regulatory Authority, which oversees brokers. (FINRA is an independent, nonprofit organization that enforces federal securities laws, but it is not an arm of the government.)
Licensed brokers are allowed to sell stocks, bonds and mutual funds. Investment advisers don't sell securities but can recommend financial products to clients.
In 2003, Bank formed Dominion Investment Group as an arm of Resource Bank, according to an undated essay on the company's website. It went independent a few years later as the economy crashed.
Bank and Hudspeth, the only employees at that point, were selling fixed annuities and insurance in Virginia Beach.
The essay says about Bank: "Inspired by his dynamic history of overcoming obstacles and taking risks that ultimately paid off, his mindset about his business during this economically challenging time was exactly the opposite from most businesses and financial firms. While everyone else was preparing for the worst and scaling back, he had one thing on his mind: expansion!"
Bank's and Hudspeth's troubles with federal authorities started in 2008, when FINRA filings accused both of misconduct.
Investigators alleged that Bank and a business partner, Gregory Bodoh, misappropriated $160,000 in commissions that belonged to the now-defunct Bank of the Commonwealth and its subsidiary, Commonwealth Financial Advisors LLC.
Bank was employed by Bank of the Commonwealth from 2005 to 2008 - separately from his work with Dominion Investment Group. According to FINRA, he funneled money to Bodoh through an arrangement with Commonwealth Financial Advisors; Bodoh then transferred the money to a company owned by Bank, who kept most of it but returned some to Bodoh.
Around the same time, FINRA accused Hudspeth of selling shares of real estate investment trusts to clients in 2007 and 2008 without having the proper license.
Bank, Bodoh and Hudspeth settled with FINRA in February 2010. None admitted guilt, but Bank and Bodoh were permanently banned from the authority, meaning they could no longer register as brokers or work for firms registered with it.
Bank gave up his license and was "discharged" by the company he was registered with, Capitol Securities Management, according to FINRA's broker database. Hudspeth was fined $5,000 and suspended for 30 days.
"Barring an individual from the industry... is the strongest sanction FINRA can assess," George Smaragdis, a spokesman for the authority, said in an email to The Pilot. "While FINRA does not have the authority to bring criminal charges against an individual or firm, FINRA can and does actively refer hundreds of matters to the relevant authorities every year."
Smaragdis said FINRA can't confirm whether information about particular cases was forwarded to law enforcement officers.
Bank moved from Virginia to Port St. Lucie after being barred by FINRA, according to an affidavit from the lead investigator of the Virginia State Corporation Commission's Division of Securities and Retail Franchising. The date was not specified.
Soon after the FINRA settlements, Bank began expanding his public profile and building a web of limited liability companies under the umbrella of Dominion Investment Group. The operations in Virginia and Florida expanded to offices in Arizona, Colorado, Delaware, Nevada and Pennsylvania.
Bank's radio show is broadcast in 15 states, according to the company website. Each show lasts 45 minutes to an hour, covering topics such as annuities, taxes, identity theft and college planning. Recent segments are called "Daryl & the Bull: Putting Your Financial House in Order," featuring Bank and Bradley Sperling, a Dominion employee, as "The Bull."
Colleen Dick, station manager for Chesapeake-Portsmouth Broadcasting, the company that programs AM 1650 WHKT in Hampton Roads, said she was unaware of Bank's history with FINRA or the recent civil complaints filed against him in Arizona and Virginia.
The company paid WHKT to broadcast its show, Dick said. Often, the commercials played between segments were advertisements for Dominion.
"Attention, savers. Here's your chance to create up to 30 percent or more in cash flow," one commercial said in January 2014. "Your $25,000 may create $10,000 or more of annual earnings. In these times, we understand it's hard to make 4 percent, no less up to 30 percent, but there is an opportunity that exists that's proven itself over the last nine years."
The narrator didn't identify the opportunity.
WHKT took the show off the air early in July, the same week The Pilot called to ask about it, Dick said. "Daryl & the Bull" was under a year-long contract that started in October.
"We want to make sure our listeners are not caught in the middle of anything, so that was certainly part of it," Henry Hoot, regional vice president for Chesapeake-Portsmouth Broadcasting, said when asked whether Bank's FINRA ban contributed to the decision.
Bank also was a contributor to two recent books published by Celebrity Press: "SuccessOnomics: Learn The Secrets Of Success In The New Economy From Today's Leading Entrepreneurs and Professionals" and "Get in the Game: The World's Leading Entrepreneurs & Professionals Reveal How YOU Can Get Off the Sideline and Start Improving Your Health, Wealth & Lifestyle."
In both, Bank was one of dozens of contributors. J.W. Dicks, co-owner of Celebrity Press, said his company Google searches all of its authors before allowing them to be published, but Bank's history with FINRA did not come to light.
"Obviously, you've brought concerns to me, particularly about the search," Dicks said. "You don't know what you don't know."
Bank paid $7,164 to be published in "SuccessOnomics" and $8,700 to be included in "Get in the Game," Dicks said.
For an extra fee, the company prints individualized book covers with a photo of the contributor on the front. Bank has his own "SuccessOnomics" cover, and he hand-delivered a signed copy to Ann, the elderly client in Hampton. Bank had been managing her family's money since the late 1990s, when she and her late husband met him at a seminar he hosted on investing.
His chapter in the book - titled "One Day I'll Succeed!" - recounts his experiences with Bank of the Commonwealth. He said he and his partners anonymously reported "rampant fraud and deception" to regulators and law enforcement, and then the bank's president and CEO "spun a web of criminal accusations" against him.
"For the first time in my life, I couldn't sleep," Bank wrote. "When I did sleep, I awoke in a cold sweat with wild visions of the FBI breaking in the door to my home or barging into my office and leading me away in handcuffs."
He wrote that he was innocent, but "no one wants the FBI looking at you; this is not a good feeling."
In April, the SEC filed a complaint in U.S. District Court in Arizona against Bank and five other men, alleging they participated in a scheme to bilk millions from investors through the sale of "cellular spectrum licenses."
The complaint says the plan was orchestrated by David Alcorn and Kent Maerki, both of Arizona, and a company they formed called Janus Spectrum LLC. Bank and three others allegedly acted as fundraisers by selling interests in a particular band of the wireless spectrum they claimed would be sought by Sprint and other major cellphone carriers.
In reality, the Federal Communications Commission had limited the use of that band to protect public safety airwaves, according to the complaint. It was mostly used by local law enforcement officers and small businesses like pizza delivery companies.
A Sprint representative told Alcorn in 2010 - two years before the first securities offerings - that the company wouldn't be able to use the spectrum he applied for because of federal restrictions, according to the SEC. Alcorn was told again in 2011.
Documents say the group of six men and 12 companies raised $12.4 million from 2012 to 2014, with Bank bringing in much more than the others. Using several Virginia Beach-based companies, Bank allegedly raised $8.2 million from 111 investors across the country - an average of about $74,000 per person.
Of that, he transferred $4.5 million to his personal and business accounts without the knowledge of his investors, the SEC said.
An SEC spokeswoman declined to comment on the case.
In a response to the complaint, Bank and several of his companies denied some of the allegations and claimed others were ambiguous or irrelevant. They asked the court to dismiss the case.
A hearing has been set for Nov. 5 in Phoenix.
In 2012, officials with the Virginia State Corporation Commission requested documents from Hudspeth for a routine audit. Hudspeth signed a letter claiming neither he nor the affiliate he was managing, Norfolk-based Dominion Investment Advisors LLC, was selling securities.
When a client complained to the SCC's securities division in 2014, an auditor asked to examine the company's records. Hudspeth again denied having sold securities, the documents said.
The division claims that Hudspeth lied to officials both times and that he and his firm unlawfully offered and sold unregistered securities for at least three companies.
In one case, Hudspeth and his company allegedly told clients the business he was selling stakes in was a "hands-free" and "proven" franchise chain called Dental Support Plus, run by Maerki of Arizona. But no stores ever opened, officials claim.
Barbara, the Chesapeake woman interviewed by The Pilot, said she invested $110,000 in 2004 with Hudspeth after she sold her home. When the market crashed a few years later, the woman told Hudspeth she wanted out of stocks, so he suggested other investments.
She does not remember talking about commissions, fees or costs with Hudspeth, according to a questionnaire she filled out for the SEC's division of enforcement, which she provided to The Pilot.
"I trusted him entirely," she wrote to the SEC. "He never discussed risks (only the profits) associated with my investments."
Hudspeth gave her a stack of thorough documents outlining Dental Support Plus before she signed. After she agreed to invest, she received several binders of legal documents and newsletters, "which made the investment look more legit and legal," she wrote.
She bought three franchise units for $25,000 each, which was what she had left after leaving the stock market. She expected to earn roughly $6,240 a year - but she told the SEC she received just one dividend check for $99 between 2011 and 2015.
"I recall saying to him more than once, 'Treat me as if I were your grandmother. Don't put me in anything that you wouldn't put her in,' " she wrote.
When the woman became concerned about her money, she asked to liquidate her account, but she said Hudspeth told her he would first have to find another investor to buy her interests. He eventually found a buyer for one unit, which left her with two shares worth $50,000.
In August 2014, she received a letter explaining that Dental Support had run out of money and would stop operating.
Hudspeth suggested she invest the $25,000 she recovered from Dental Support in two other limited liability companies, she said. She agreed, but has since been told by a Dominion associate that the company has to find another buyer before getting her money back.
"The final straw was when I was having an emotional conversation with Roger," she wrote to the SEC. "Almost in tears, I said to him, 'Before I get my money from this investment (Dental Support Plus), at my age, I might not be around to recover my loss.' His response was, 'Then you won't have to worry about it.' "
Upset, she said she spoke to Bank about Hudspeth's comments and about her failed investments - but he didn't offer her solutions.
"Why would you commit a 74-year-old (then), 77-year-old (now) to this type of investment?" she wrote.
Hudspeth's attorney, Richmond-based Melissa Ann Conner, filed a response in April rebutting the claims made by the securities division of the State Corporation Commission: None of the investors who bought interests in Hudspeth's ventures were technically "investment advisor" clients, and they all presumably understood the disclosures they signed, and therefore they knew they risked losing money.
The products also were exempt from registration requirements, Conner wrote.
The securities division asked the SCC in February to revoke the investment adviser licenses of Hudspeth and the company. It is seeking restitution to investors, civil penalties and an injunction barring them from the securities business in Virginia.
The division subpoenaed files relating to Hudspeth months ago, but just one document had been submitted as of last week. A "hearing examiner," who acts as a judge, set a new deadline of Aug. 24 for the records to be filed.
The state has also requested a temporary injunction against Bank and four of his employees, "given the scope of the interrelated entities and breadth of the defendants' potential violations of the act," according to documents filed by Virginia's securities division in June. About three dozen copies of the original injunction request were refused when the commission attempted to deliver them to Dominion's offices in Virginia Beach, according to documents filed in late July.
The SCC will hold a hearing to discuss the injunction request on Thursday in Richmond.
Through Dental Support and other companies, Bank and his affiliates raised at least $3.1 million from 75 Virginia investors, the filing said. They also sold securities without the licenses they're required to have.
Still, the investigation isn't over.
"The division is concerned that... the defendants will continue to offer and sell the securities in violation of the act or transfer its sales operations to other affiliated companies," the filing said.
Within two weeks of the state's injunction request, Ann, Bank's client in Hampton, was sent four nearly identical and unsigned letters from each of the limited liability companies she had invested in through Dominion Investment: PLI Management LLC, DV8 Group Management LLC, WeMonitor Management LLC and Warped Cigar Management LLC.
"Due to taxes, efficiency, and the desire to keep costs down, we have decided to move the location" of three of the companies from Virginia to Florida, the letters said; Warped Cigar had moved to Nevada.
"This does not affect you or your ownership rights in anyway in the new location," the four letters said.
After Ann's husband died in 2002, at least $250,000 - nearly half of her nest egg - shifted from traditional securities like stocks and mutual funds to limited liability companies recommended by Bank, according to Lanette, the woman's daughter, who lives in Suffolk.
A couple of hundred dollars in quarterly dividends rolled in for years, but within the past couple of years, Ann stopped receiving statements in the mail.
She says the FBI visited her home last winter to ask about her investments in PLI Management. Her daughter called Bank after the investigator left to ask why the FBI had been to her mother's house. Bank, she said, pointed the finger at a former employee, but reassured her that her mother's money was safe.
Earlier this summer, Ann and Lanette asked Bank's associate to liquidate the funds in PLI because they still worried about the FBI involvement. The funds weren't liquidated, according to Lanette.
When she asked for an explanation, she was told by the associate that Bank needed to find a new buyer for a "cross trade" but that he had "good news on one of the other holdings that he would like to discuss," according to an email provided to The Pilot.
A response to the state filed July 21 by Billy Seabolt, a Williamsburg attorney with Family Wealth Law Group, who is representing Bank and the other defendants, accuses the securities division of filing "aggressive motions" before conducting a full investigation. Seabolt asked the commission to strike down the injunction request.
The defendants have cooperated by providing paperwork when the state has requested it, Seabolt wrote:
"These actions are not the actions of people who are seeking to break the law. Though in today's overly regulated society, there might be some 'gotcha' issues by which a governmental entity can lay claim to."
Seabolt said investors were warned that they may face "total loss" when buying Dominion's "alternative products."
"Some clients have lost money but so have people who invested in juno.com, etoys.com, pets.com, altavista.com, Circuit City, K-mart, Sears... " he wrote.
Earlier this summer, a group of Florida residents received a postcard inviting them to a seminar called "Social Security Maximization."
The meeting was at a community college north of Port St. Lucie. It was hosted by Hudspeth, whose LinkedIn page touts his "fiduciary standard" as one of his strengths: "by law, advice must be in client's best interest."
A Pilot reporter pre-registered for the class, but Hudspeth called the afternoon of the event and asked her not to attend. He said she was too young to benefit from the information, and that he had a waiting list of seniors who wanted to attend, so he needed her seat.
"I have nothing to hide," he said, but declined to meet in person that day or in the future.
At the event, an associate of Hudspeth's told the reporter to leave, then shut the door. Before it closed, the reporter saw about a dozen people in the room and empty seats at every table.
After the meeting, one of the attendees, George Durr, 80, said he didn't feel pressured by Hudspeth to buy financial products or transfer his money to Dominion Investment Group. He was given an opportunity to provide personal information, and he expected Dominion to contact him.
Several former Dominion Investment Group employees declined to be interviewed for this story.
Irv Segal, who runs a company called Easy Land Deals in Scottsdale, Ariz., tried to set up a Dominion Investment Group office there in 2014. He said Hudspeth taught him how to host Social Security seminars. The venture didn't work out, so Segal abandoned plans for the branch.
"I was trying to generate leads and Roger was going to be the key person for talking to them about investments for retirement kind of stuff," Segal said. "I was trying to line people up for a review of their Social Security situation.... If they were interested, then Dominion could handle their investments for them."
Segal said he knew Bank and Hudspeth through his work as a franchisee of the Dental Support Plus venture a few years earlier. He said Hudspeth was a straight-shooter with a more low-key style than Bank.
"He has charisma," Segal said of Bank. "You just can't stop listening to him talk."
On his radio show, Bank's lilting Southern accent sometimes lapses into a no-nonsense, rapid-fire delivery. In a January 2014 episode about scams on the elderly, Bank recounted a call from a person he thought was trying to swindle him:
"I played with him for five or 10 minutes, but I abused him in a way that my wife had to have a talk with me afterwards. But I gave him an abuse that I felt like he had earned... because all I could think of is, had he called my grandparents or some other senior in this community... he would have taken advantage of people.
"It just absolutely inflamed me."
Ann said that when she first dealt with Bank, he would show her pictures of his new wife, his dog and eventually his two children, whose names she scrawled in her address book. He'd ask about her family. His voice became so familiar she recognized it immediately when he called.
One constant topic, she remembered, was his grandparents. Bank liked to talk about his close ties to them, especially when he was pitching a new investment. Over and over, she heard him say, "I would never put you in anything that I wouldn't put my grandparents in."
​Sarah Kleiner, 757-446-2318, sarah.kleiner@pilotonline.com

Wednesday, January 24, 2018

If You Cannot Trust The Clerk At The Social Security Office To Help With Your Case, Who Can You Trust?

Feds say Social Security rep scammed thousands from clients. Then he shot a selfie.


Thursday, January 18, 2018

Judge Alex Kozinski And The 9th Circuit

Trump despises the 9th Circuit Court of Appeals; why doesn’t he change it?

While the 9th Circuit has a reputation of having its decisions overturned by the U.S. Supreme Court — which happened 88 percent of the time during the court’s 2016 term — the Supreme Court reviewed just eight of the 9th Circuit’s 6,554 rulings that year. That means that, love them or hate them, the vast majority of court’s decisions become the law of the land.
So why hasn’t Trump moved faster on the 9th Circuit?
Trump is going to have an enormous effect on the 9th Circuit
Erwin Chemerinsky, dean of the UC Berkeley School of Law
One reason is his judicial attentions have been poised elsewhere. The White House and Senate moved quickly last year to confirm Trump’s Supreme Court nominee, Neil Gorsuch. The Senate then confirmed 12 of Trump’s nominees to U.S. appeals courts by the end of 2017, a record for a president’s first year in office. By contrast, President Obama was only able to get three appeals court judges confirmed during his inaugural year.
In nominating those 12 appeals court judges, the White House tended to focus on states that Trump won during the 2016 election, and also those represented by key GOP senators. Trump’s first two appeals court nominations involved Kentucky judges on the 6th Circuit, of special interest to Senate Majority Leader Mitch McConnell. Most of the remainder involve appeals courts in the Midwest and South.
The Senate “blue-slip” tradition may be another factor. The “blue slip” refers to a gentleman’s agreement, not a hard rule, that allows a U.S. senator to reject judicial nominees for their home state by refusing to return a positive blue slip to the Senate Judiciary Committee chairman.
If this tradition is honored, Sen. Dianne Feinstein and other west-coast Democrats will have leverage over Trump nominations in their states. But conservative groups are pressuring Senate Judiciary Chairman Charles Grassley to abandon that tradition, and Grassley has indicated he may not honor blue-slip objections in all situations.
A test case is coming up. Last year, Trump nominated a 44-year-old federal prosecutor from Oregon, Ryan Bounds, to an open seat on the 9th Circuit. Like many of Trump’s judicial nominees, Bounds is a member of the Federalist Society, a conservative group that Trump once stated would be the selector of all of his judicial nominees.
Oregon’s two U.S. senators, both Democrats, objected to Bounds’ nomination, stalling the confirmation. This month, Trump renominated Bounds to the seat, and Grassley is declining to say if his confirmation process will advance. “Sen. Grassley has not made any statements on this particular nominee,” said Taylor Foy, a spokesman for the judiciary chairman.
Feinstein insists that Grassley consult with Oregon’s senators. “If a nominee doesn’t receive [favorable] blue slips from both home-state senators, the committee shouldn’t move forward,” Feinstein said in a statement to McClatchy.
For its part, the White House declined to comment on its approach to the 9th Circuit, saying only that “we are working with and extensively consult all Senators, from both parties, throughout the nomination process.”
If Grassley abandons the blue-slip process, it would eliminate the incentive for Trump to consult with Democrats and could change the 9th Circuit for decades to come, said Barry McDonald, a law professor at Pepperdine University in California.
“He and his advisers have stated they are looking to appoint young, ideologically conservative judges, so they will be on the bench for a number of years,” said McDonald. “The more judges he’s able to appoint, the more of the mark they are going to leave on the law.”
Yet McDonald, who once clerked for Supreme Court Chief Justice William Rehnquist, said abandonment of bipartisan consultation will only add to partisan divides in the judicial system, resulting in more judges on the political fringes. “The blue slip plays a moderating role.”
Eliminating the blue slip process would also inflame already tense relations between Feinstein and Grassley, and Feinstein and Trump.
Through much of last year, the White House was cautious in dealing with Feinstein, who is both a ranking member of Judiciary and a member of the Senate Intelligence Committee, giving her sway over the Senate’s Russia investigations. But Trump recently referred to Feinstein as “Sneaky Diane” in a tweet, after she used her Judicial Committee seniority to release testimony from the founder of the firm behind the infamous Trump dossier.
Controversy over blue slips flares in nearly every administration, depending on who is in power. When Obama was president, Judiciary Chairman Patrick Leahy, a Democrat from Vermont, honored the blue slip tradition, and Republicans used it to block many of Obama’s nominees, including those to the 9th Circuit. That obstruction prompted a 2014 New York Times editorial urging Leahy to abandon the blue slip.
With Trump in power, conservative groups are running ads denouncing Democrats who use their blue slips to block the president’s nominees.
Over the last two months, Feinstein and Grassley have engaged in dueling op-eds over the issue. Grassley argues that defenders of the blue-slip tradition overstate how consistently it has been honored in the Senate over the decades. Feinstein notes that Grassley used the blue slip to block nine of Obama’s nominees in 2015 and 2016.
Partly because of its regional location, the 9th Circuit has decided important cases over the years involving the environment, same-sex marriage and civil rights. Despite its liberal reputation — Rush Limbaugh once called it “the 9th Circus“ — most experts say the appeals court has moderated in recent years, in part because of the retirement of Jimmy Carter and Bill Clinton appointees.
Still, the 9th Circuit and its three-judge panels have struck down two of Trump’s travel bans, and also blocked a Trump order to withhold funding from so-called sanctuary cities. That April ruling prompted former White House Chief of Staff Reince Priebus to tell reporters, “It’s the 9th Circuit going bananas.”
The full 9th Circuit is authorized to have 29 judgeships. When Trump came to office, there were four openings, which became five in December when Alex Kosinski, a libertarian who regularly sided with the liberal majority, announced his retirement amid allegations of inappropriate sexual behavior.
Of the 24 judges now sitting, 18 were appointed by Democrats, and six were appointed by George W. Bush, a Republican. If Trump is able to get all of appointees confirmed this year, that split will shrink to 17-12. Conceivably, Republican appointees could exceed Democratic appointees by the time Trump leaves office.
Since the 9th Circuit operates with randomly assigned, three-judge panels, Trump’s nominees could issue much different rulings than the ones that now dog him, said Kevin R. Johnson, an immigration expert and dean of the UC Davis School of Law. “With more conservatives in the pool, you are more likely to have more conservatives on the panels,” he said.
Johnson said he expects the White House to appoint some “highly qualified people” but ones with a far more right-leaning ideology than many of their 9th Circuit predecessors.
“Trump will move the court to the right,” Johnson said. “Possibly quite a way.”
Stuart Leavenworth: 202-383-6070, @sleavenworth