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Fraudulent Purchase of Structured Settlement Annuities RICO Class Action

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Plaintiff Larry Dockery was in special education classes throughout his school years, the complaint for this class action says, but after graduation, he was able to work as a janitor—until a machinery accident severed his left arm. Dockery was compensated with a Structured Settlement Annuity (SSA), consisting of periodic payments that he would receive throughout his life. Unfortunately, according to the complaint, Dockery has been stripped of his SSA payments, bit by bit, by unscrupulous parties in a conspiracy to bypass the law.

The class for this action is all persons who (1) were beneficiaries of one or more SSAs, (2) were parties to a proceeding in which defendant Stephen E. Heretick represented a purchaser defendant in this case to get judicial approval of its purchase of the rights to the SSA, where

  • The proceeding took place in the Portsmouth, Virginia Circuit Court,
  • The proceeding was presided over by one of the complicit judges cited in this case,
  • The beneficiary waived the right to counsel and was not represented by a lawyer,
  • The petition for the purchase was approved either on the same day it was filed or within two weeks thereafter, without meaningful review by the court, and
  • The beneficiary was not present at the proceeding.

SSAs are often used to settle personal injury or medical malpractice cases where large sums will be needed to pay for long-term treatment or care of an injured person. SSAs help persons who may be impaired or not financially savvy by providing steady or periodic income streams over long periods of time.

The complaint claims that SSA beneficiaries are vulnerable to unscrupulous companies who want to buy their income streams for low but immediate payments that are not proper compensation for the long-term income.

State and federal laws were enacted to protect beneficiaries, by requiring judicial review of all such purchases to ensure that they are in the best interest of the beneficiaries. Unfortunately, the complaint alleges, a conspiracy has been formed in Virginia that involves attorney Heretick, companies that purchase SSA benefits, and complicit judges.

The complaint alleges that the scheme works like this: The companies gain the confidence of beneficiaries by treating them well and even taking them on outings. They claim to help the beneficiaries by letting them have “their” money sooner. The beneficiaries are induced to waive their right to attorneys to represent their interests and sometimes to claim, falsely, that they live in Virginia, so that the proceedings can take place there. Heretick represents the companies, and he has been granted a block of time in the Virginia courts to bring these proceedings in groups. They are presided over by judges who provide little or no review of the terms of the purchases and simply rubber stamp them. Thus the companies buy the SSA benefits at low prices that don’t fairly compensate the victims.

Because the complaint alleges that this is a conspiracy, it primarily charges the defendants with violation of Racketeer Influence and Corrupt Organizations (RICO) laws. 

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