IRS Attacks CJA & CJA and Associates’ plans
Lance Wallach
Our tax resolution offices have been alerted that taxpayers are starting to be contacted by the IRS concerning plans in connection with CJA & CJA and Associates. If you are in any type of benefit plan, a plan having insurance, 419 plan, 412i, 412(e)(3), 419e, Welfare benefit plans, Prepare Plan, Titanium, Section 79, Captive Insurance or other CJA plan contact our office immediately for assistance.
For more information and additional articles on these subjects, visitwww.vebaplan.com, or call 516-938-5007
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
U.S. TELEMANAGEMENT, INC.,
:
DOCKET NO.
RONALD SCHEIBEL, individually
and on behalf of the U.S.
:
Telemanagement Inc. Defined
Benefit Plan and the U.S.
:
Telemanagement Inc. Welfare Benefit
Trust, S. KENESTON AND
:
ASSOCIATES, INC., and SCOTT
KENESTON, individually and
:
on behalf of the S. Keneston Defined
Benefit Plan,
:
Plaintiffs,
:
v.
:
FIDELITY SECURITY LIFE
:
JULY 31, 2012
INSURANCE CO., CJA ASSOCIATES,
INC., FIRST ACTUARIAL
:
CORPORATION and THOMAS
THORNDIKE,
:
Defendants. :
Class Action Complaint
I.
Summary.
1.
This is a class action brought by two small businesses that established
employee benefit plans and two plan participants in those plans. They sue under §§ 502
(a)(2) and (a)(3) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C.
§§ 1132 (a)(2) and (a)(3), against the fiduciaries who gave them investment advice and
administered these plans.
Case 3:12-cv-01110 Document 1 Filed 08/01/12 Page 1 of 36
2.
Defendant Fidelity Security Life Insurance Company (FSL) through its
agents defendants CJA Associates, Inc. (
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ReplyDeleteCJA & associates 419 412i section 79 scam audits lawsuits
CJA & Associates Company
California Enrolled Agent
January 2, 2009
Abusive 412(i) Retirement Plans Can Get Accountants Fined $200,000
By: Lance Wallach & Ira Kaplan
Most insurance agents sell 412(i) retirement plans!. The large insurance commissions generate some of the enthusiasm'. Unlike other retirement plans, the 412(i) plan must have insurance products as the funding mechanism". This seems to generate enthusiasm among insurance agents;. The IRS has been auditing almost all participants in 412(i) plans for the last few years,. At first, they thought all 412(i) plans were abusive. Many participants' contributions were disallowed and there were additional fines of $200,000 per year for the participants. The accountants who signed the tax returns (who the IRS called "material advisors") were also fined $200,000 with a referral to the Office of Professional Responsibility.
For more articles and details, see www.vebaplan.com and www.irs.gov/.
On Friday February 13, the IRS issued proposed regulations concerning the valuation of insurance contracts in the context of qualified retirement plans.
ReplyDeleteCJA & associates 419 412i section 79 scam audits lawsuits
CJA & Associates Company
California Enrolled Agent
January 2, 2009
Abusive 412(i) Retirement Plans Can Get Accountants Fined $200,000
By: Lance Wallach & Ira Kaplan
Most insurance agents sell 412(i) retirement plans!. The large insurance commissions generate some of the enthusiasm'. Unlike other retirement plans, the 412(i) plan must have insurance products as the funding mechanism". This seems to generate enthusiasm among insurance agents;. The IRS has been auditing almost all participants in 412(i) plans for the last few years,. At first, they thought all 412(i) plans were abusive. Many participants' contributions were disallowed and there were additional fines of $200,000 per year for the participants. The accountants who signed the tax returns (who the IRS called "material advisors") were also fined $200,000 with a referral to the Office of Professional Responsibility.
For more articles and details, see www.vebaplan.com and www.irs.gov/.
On Friday February 13, the IRS issued proposed regulations concerning the valuation of insurance contracts in the context of qualified retirement plans.
III. The Insurance Companies
ReplyDeleteThe Inter-American Insurance Co. of Illinois (InterAmerican)
specializes in providing to small, closely held
corporations products such as qualified pension and profit
sharing plans and group life insurance plans. When Inter-
- 16 -
American was formed in the late 1970’s, it was owned indirectly
by Beaven/Inter-American Cos., Inc. (Beaven/Inter-American), the
wholly owned company of Raymond G. Ankner (Mr. Ankner), who has
worked in the insurance industry for more than 30 years. InterAmerican
liquidated on December 23, 1991, pursuant to a court
order to do so, and Beaven/Inter-American changed its name to
Beaven Cos., Inc. Mr. Ankner currently markets the life
insurance products described herein through a company of his
called CJA & Associates.
ReplyDeletePlaintiffs seek unspecified damages, but they ask the Court to presume that, if the investments had not been made in the FSL annuities, the assets would have been invested in the most profitable alternative investments available to them. As is common in ERISA cases, plaintiffs do not allege what more profitable alternative investments were available, aside from other annuities with comparable returns.
Potential Impact of this Case
We see at least three potential impacts from this new case. First, there is a potential that this class action will spawn a new wave of class actions directed at insurance companies that have sold 412(e)(3) annuities. Although plaintiffs nominally contend that the FSL annuities were unsuitable “as structured,” the complaint reads like a general attack on the suitability of such annuities under any circumstance, and a general attack on the insurance companies who acted as service providers with respect to retirement plans that were funded with 412(e)(3) annuities. Thus, as with the revenue-sharing class actions, where plaintiff’s counsel sued most major insurance company service providers, the Fidelity Life class action could be the first among many filed against the insurance industry.
Second, this lawsuit continues the unrelenting efforts by the ERISA class action plaintiffs’ bar to try to transform insurance companies – mere sellers of retirement products and services – into ERISA fiduciaries. We first observed these efforts in earnest in the revenue-sharing class actions we have defended, and this case appears to continue the trend in which plaintiffs attempt to recast ministerial tasks or sales efforts as fiduciary conduct. The rulings in this case could contribute to the developing body of law regarding what activities can cause entities to qualify as ERISA fiduciaries.
Third, this lawsuit could trigger other non-412(e)(3) lawsuits claiming that other life insurance or annuity-based retirement products and services are “too expensive” or “unsuitable” for retirement plans. We have already observed these same sort of efforts in the ERISA stock drop cases we have defended, in which plaintiffs contend that company stock was unsuitable, and more recently, in some of the plan sponsor revenue-sharing cases, in which plaintiffs contend that certain mutual fund offerings used as investment options are too expensive. This lawsuit could cause the ERISA class action plaintiffs’ bar to look for other types of products for which it could pursue similar claims.
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Published on November 16, 2016
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Lance Wallach
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ReplyDeleteRaymond Ankner -Expected to be the biggest life insurance failure in Illinois : Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : IRS Attacks CJA & CJA and Associates’ plans
Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : IRS Attacks CJA & CJA and Associates’ plans
Posted by Lance Wallach at 3/18/2015 05:38:00 PM
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Labels: 412i, 419, Abusive Insurance, Abusive Tax Shelters, ance Wallach, IRS, IRS Audits, Life Insurance, litigation, Welfare Benefit Plans
3 comments:
Lance WallachMay 13, 2016 at 8:47 AM
III. The Insurance Companies
The Inter-American Insurance Co. of Illinois (InterAmerican)
specializes in providing to small, closely held
corporations products such as qualified pension and profit
sharing plans and group life insurance plans. When Inter-
- 16 -
American was formed in the late 1970’s, it was owned indirectly
by Beaven/Inter-American Cos., Inc. (Beaven/Inter-American), the
wholly owned company of Raymond G. Ankner (Mr. Ankner), who has
worked in the insurance industry for more than 30 years. InterAmerican
liquidated on December 23, 1991, pursuant to a court
order to do so, and Beaven/Inter-American changed its name to
Beaven Cos., Inc. Mr. Ankner currently markets the life
insurance products described herein through a company of his
called CJA & Associates.
Reply
Lance WallachAugust 22, 2016 at 7:52 AM
Class Action Filed against CJA and Associates and Fidelity Security Life
Hartford, CT: A consumer fraud class action lawsuit has been filed against Chicago-based CJA and Associates and Kansas City, Missouri-based Fidelity Security Life Insurance Company (FSL).
The lawsuit alleges that CJA and FSL breached fiduciary duties in duping small business owners into investing millions of dollars of employee retirement benefit money in FSL annuities when up to 95% of the initial money invested was being siphoned off in commissions and fees.
The so-called Section 412 (e)(3) plans are under attack from the IRS as illegitimate attempts to avoid federal taxes. The lawsuit alleges that by advising investment in these plans CJA and FSL breached federal laws governing advice given to employee benefit plans.
Reply
Lance WallachMay 23, 2017 at 12:24 PM
Liquidation Comes For Lavish Insurer
January 26, 1992|By Laurie Cohen.
379
In 1990 Chicago insurance executive Raymond Ankner flew about 100 of his top agents to Germany to celebrate Oktoberfest in Cologne. The cost of the trip was $800,000, billed to Ankner`s businesses.
Most of those acquainted with him didn`t view the expensive junket or other lavish activities as out of line. To them, the red-haired, Brooklyn-born Ankner epitomized the successful insurance man, with a fast-growing operation, a company
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plane, homes in Florida and Vermont and an apartment in Water Tower Place.
But insurance regulators were already beginning to question expenses at his main insurance unit, InterAmerican Insurance Co. of Illinois. When the Illinois Insurance Department obtained a court order last month to liquidate the company, court papers showed a balance sheet crowded with overvalued real estate and questionable intercompany transactions and reinsurance arrangements.
The collapse of InterAmerican is expected to be the biggest life insurance failure in Illinois history, with a gap of more than $30 million between assets and liabilities. It has placed in the hands of state regulators the largest real estate and mortgage portfolio ever managed by the department. InterAmerican`s $33 million portfolio of mortgages and real estate covers several investments