Sonn was pulled into the case in 2016 when a Mississippi household called, worried they had actually been conned.
Their issues started that September, when 41-year-old Georgia man Gaylon LaBoa passed away in a 40-foot fall from his terrace. The family thought they ‘d invested in currency trading accounts and property tax liens with LaBoa. But they had actually grown suspicious in the months leading up to his death, when he stopped distributing payments and declared there was nothing to fret about.
That indicated one thing: It was time to get sleuthing.
“We feel like we’re investigators, and our job is to go to the criminal offense scene and determine what happened, follow the money and attempt and assist the victims as finest we can,” Sonn stated. “It’s frequently a whodunit.”
Sonn teamed with Sallah, who typically acts as a Securities and Exchange Commission receiver, Katz, Walter Davis of Dunbar Davis in Mississippi and Brian Pastor of the Atlanta Attorney Group, who had received a similar call from a customer in Georgia.
The cause of LaBoa’s death was blunt force injuries to the upper torso and head, according to his death certificate. And a search of his workplace left Sonn persuaded “somebody should have raided it.”
A small safe was open and empty, near a stack of books about how to conceal money, consisting of, “Tricks of Swiss Banking,” “Offshore financial investments that safeguard your money” and “How to move assets offshore for privacy, security and tax advantage.”
Possibly unsurprisingly, LaBoa left no apparent money routes, however a tipster claimed he had life insurance coverage. So Sonn identified LaBoa’s life insurance coverage representative and called every business with which they worked.
“I blasted out 20 letters saying, ‘Hey, my clients were the victim of a Ponzi plan. Any life insurance coverage? Is there residential or commercial property? Was there money?'” Sonn stated.
Sure enough, Hartford Life and Annuity Insurance Co. and Transamerica Life Insurance Co. responded, exposing they had $4 million worth of life insurance coverage for LaBoa.
However it wasn’t that simple.
LaBoa’s ex-wife, Terry Lee Brown, and young kid– referred to as GLL– were the recipients, and they were going to argue.
LaBoa’s alleged victims filed match in Mississippi, claiming they lost about $7 million and reasoning that’s where most of the scheming occurred. But the insurers sued in Georgia, where LaBoa died, with interpleaders asking who they need to pay.
A legal fight took place over which state law applied, and the stakes were high.
“Depending on where it went, both parties had a lot to lose,” Sonn said. “Mississippi law says if you’re swindled in a Ponzi and you can prove your cash was traceable to a possession, you can get the asset. Georgia law was various. It states, for insurance coverage, the beneficiaries have first claim over any creditor.”
It’s “an extremely odd statute,” according to Sallah, who states he prepares to compose an article about how it can make certain policies “creditor-proof” if there’s no equity.
“You take a lot of money, you call your kid as a beneficiary of an insurance plan, you use the taken cash to buy premiums for huge policies, and after that you die,” Sallah stated. “And the creditors that you duped are insulated from pursuing the kid, possibly, for the insurance coverage.”
The complainants’ group worked with a leading Georgia Ponzi plan specialist, who concluded LaBoa was running a Ponzi scheme because the only cash LaBoa’s company Crimson Financial Group had originated from financiers, and was used to purchase the insurance.
Brown’s deposition was likewise telling, in Sonn’s view, as she yielded her ex-husband was never ever the income producer in their marital relationship and existed with his income tax return, revealing he made just $5,000 a year.
“I’m like, ‘How did you believe he was paying for private school? How did you think he was paying spousal support payments? Where did you think the money was originating from?’ ‘I do not know,'” Sonn stated.” We found it suspicious that all this money is being paid for independent school and more than $400,000 was paid to her, but she didn’t know her partner was making any money.”
An investigation exposed LaBoa was a jetsetter who regularly gambled at the Bellagio Hotel in Las Vegas and rented an expensive flat in London with his girlfriend and director of operations Katy Steele, who Sonn states disappeared after LaBoa’s death.
Numerous pleadings later, U.S. District Judge Michael Brown in the Northern District of Georgia bought mediation prior to U.S. Magistrate Judge J. Clay Fuller, who suggested splitting the money.
“It was an all-or-nothing gamble, and I think cooler heads dominated and the child was split,” Sallah stated.
Brown’s lawyers were Georgia solo specialist David Anton and Josh Daniel, Dan Webb and Norma Ruff of Webb Sanders & & Williams in Tupelo, Mississippi.
James Beakes of Butler Snow in Georgia and Deirdre Connolly of D’Arcambal Ousley & & Cuyler Burk in New York represented Hartford, and H. Sanders Carter Jr. of Fox Rothschild in Atlanta represented Transamerica.
They did not right away respond to a request for remark.
In Sonn’s 32 years of Ponzi scheme work — that include the infamous Bernie Madoff and Scott Rothstein cases– this was the second time a supposed operator died under mysterious circumstances.
“What made the case hard was you do not have the perpetrator. What you’re always hoping is the criminal gets jailed and, in order to make a plea bargain in criminal court, he has to tell the court what occurred,” Sonn stated. “You like to discover the truth, however we’ll never understand because he fell 40 feet to his death only a few months after the money vanished.”
If LaBoa were still alive, Sonn said he ‘d love to ask, “What was your exit strategy?”
Like many Ponzi schemers, LaBoa appears to have used common interests to gain people’s trust, satisfying numerous alleged victims through Alabama Crimson Tide football games.
But if they ‘d looked him up, they ‘d have seen he was no longer signed up with the Financial Market Regulatory Authority.
“Have a look at your adviser, and if they’re not signed up and if you can’t get a good background on them, hesitate,” Sonn stated.
Sallah stated LaBoa left behind “a trail of tears,” as much of his alleged victims lost all or the majority of their cash.
“There’s no real winners on either side,” Sallah said. “We’re fighting over cash that he left his child, so it was a tough case.”
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