Swanson adds Minnesota to states alleging senior trust scam

Swanson adds Minnesota to states alleging senior trust scam

ST. PAUL -- Minnesota's Lori Swanson has become the third state attorney general in under a year to take legal action against a so-called "trust mill."

Swanson has filed suit against two California businesses operated by the same family. Swanson alleges the two bilked Minnesota seniors out of millions of dollars.

She charges that American Family Legal Plan (AFLP) inappropriately sold "living trusts" to as many as 2,000 Minnesota seniors. She also charges Heritage Marketing and Insurance Services, a related company, with selling annuities deceptively.

Both companies are owned and controlled by father-and-son partnership Jeffrey and Stanley Norman and allegedly preyed on the same elderly people.

"These companies deceptively sold boilerplate living trusts to senior citizens regardless of whether those trusts were suitable for the seniors' estate planning or financial needs," Swanson said.

Pennsylvania Attorney General Tom Corbett filed a second suit against the the Normans, their two companies, a Pennsylvania lawyer and five insurance agents in April last year. Corbett originally sued the defendants in October 2004 after complaints from seniors.

Both suits accuse the defendants of "intentionally deceiving consumers into believing they were receiving competent legal and impartial estate planning advice, when in reality, they were coaxed or deceived into purchasing only the products that the defendants sold."

Last October North Carolina Attorney General Roy Cooper won a state Superior Court order preventing the two companies from doing further business in the state during the course of a state lawsuit.

Cooper had sued the two in May 2006 for using "aggressive, unfair and deceptive tactics to pressure elderly consumers." He estimates that Pennsylvania seniors lost hundreds of thousands of dollars to the two companies through unsuitable investments.

Swanson estimates that AFLP sold trusts to as many as 2,000 Minnesota seniors at a cost of $2,000 each, returning the company $4 million. She says Heritage, whose agents were expected to sell $25,000 in annuities to each AFLP customer, could have pulled in $50 million.

Swanson's lawsuit seeks injunctive relief against the companies as well as civil penalties and restitution.