The Securities and Exchange Commission initiated a lawsuit on Monday against a Florida lawyer and his company for allegedly deceiving disabled plaintiffs in order to earn fees from managing a $46 million settlement payout. In accordance with the filed complaint in Orlando federal court, Jason Lazarus, the CEO of Synergy Settlement Services Inc and also a lawyer, made false claims that a non-profit organization would handle pooled investment trusts for the benefit of disabled individuals and their public benefits. However, the SEC has accused the foundation of being a front company that directed business towards Synergy. The lawsuit seeks damages and repayment.
Furthermore, the SEC claims that Synergy misappropriated funds from deceased trust beneficiaries for business expenses and even sponsored beach parties and other events with the intent of attracting potential clients. Despite requests for comment, Lazarus, Synergy, and Anthony Prieto, who serves as Synergy’s president and was also named in the lawsuit, did not respond immediately.
According to Eric Bustillo, the director of the SEC’s Miami Regional Office, the defendants “betrayed the trust of their victims.” Indicated on its website, Synergy, which is based in Orlando, offers a variety of services to safeguard and maximize settlements and has worked with over 1,000 law firms nationwide. To maintain eligibility for Medicaid and Social Security benefits, individuals must adhere to strict asset and income requirements. As stated by the SEC, individuals who receive settlements can protect their benefits by placing the funds into an irrevocable trust managed by a non-profit. Synergy marketed this service to personal injury lawyers by offering two trusts managed by a non-profit called Foundation For Those With Special Needs Inc.
However, the SEC alleges that the foundation did not have any employees or manage the trusts, which had a total of 380 beneficiaries. Instead, the agency claims Synergy, Lazarus, and Prieto used the foundation to siphon $775,000 in fees back to the company. Furthermore, the SEC accuses the defendants of failing to disclose mutual fund fees to their trust clients.
In a related matter, the SEC also reached a settlement on Monday with True Link Financial Advisors and its CEO Kai Stinchcombe, who acted as the investment advisor to the trusts. Without admitting any wrongdoing, True Link agreed to pay $200,000 and Stinchcombe agreed to pay $20,000. The case is SEC v. Synergy Settlement Services Inc, No. 6:22-cv-00820, U.S. District Court for the Middle District of Florida.
The SEC was represented by Robert Levenson and Alice Sum, while the defendants’ representation is not currently available.
Final Judgment in SEC Lawsuit vs Synergy Settlement Services, Lazarus and Prieto
Final Judgment was entered in SEC Lawsuit vs Synergy Settlement Services, Jason D. Lazarus and Anthony F. Prieto, Jr
The SEC action against Synergy Lazarus and Prieto had been pending since May 2022.
Pursuant to the Court’s Order filed on March 8, 2024, judgment was entered in favor of Plaintiff, the United States Securities and Exchange Commission, and against Defendants, Synergy Settlement Services, Inc., Jason D. Lazarus, and Anthony F. Prieto, Jr., as follows:
Synergy to Pay SEC Net Profits Gained, Prejudgment Interest and a Civil Penalty
“Defendant Synergy Settlement Services, Inc. shall pay to the SEC
$43,743.68 for net profits gained as a result of the conduct alleged in this
case, along with $3,772.39 in prejudgment interest, and $400,000.00 as a
civil penalty pursuant to 15 U.S.C. §§ 77t(d), 78u(d), 80b-9(e). Such
payment shall be made in four installment payments as follows:
a. $147,516.07 no later than the close of business on the third day
after entry of this Order and Final Judgment.
b. $100,000.00 on or before January 15, 2024;
c. $100,000.00 on or before February 15, 2024;
d. $100,000.00 on or before March 15, 2024″. Jason D. Lazarus to Pay Civil Penalty
“Defendant Jason D. Lazarus shall pay to the SEC a civil penalty in sum
of $95,000.00 pursuant to 15 U.S.C. §§ 77t(d), 78u(d), 80b-9(e). Such sum
shall be paid in full no later than the close of business on the third day
after entry of this Order and Final Judgment in accordance with the terms
set forth herein”.
Anthony F. Prieto, Jr. to Pay Civil Penalty
“Defendant Anthony F. Prieto, Jr. shall pay to the SEC a civil penalty in
sum of $85,000.00 pursuant to 15 U.S.C. §§ 77t(d), 78u(d), 80b-9(e). Such
sum shall be paid in full no later than the close of business on the third day
after entry of this Order and Final Judgment in accordance with the terms
set forth herein”.
