Diversified Lending Group Litigation
FBBC successfully recovers over $7 million dollars lost by thousands of investors in a California based Ponzi scheme
FBBC has recovered millions of dollars that individuals lost in an alleged Ponzi scheme involving Diversified Lending Group, Inc. (“DLG”). From 2004 to 2008, DLG raised more than $200 million from over 200 investors. The Securities and Exchange Commission (“SEC”) shut down DLG in March of 2009, and had a Receiver appointed to liquidate DLG’s assets. The remaining assets were insufficient to pay legitimate claims from investors. The court appointed Receiver liquidated DLG’s assets, and the individual investors received less than ten cents on the dollar in recovery from the Receiver.
Most Ponzi schemes need the help of third parties to operate, and the assistance of those third parties makes it appear that the Ponzi scheme is a legitimate business. To recover for defrauded investors, FBBC focused on solvent third parties who aided and abetted the operator of the Ponzi scheme, including accountants, attorneys, title and insurance companies.
Specifically, FBBC led a nationwide class action in 2010 for investors in DLG against Jackson National Insurance Company, in an action alleging that Jackson National had knowingly aided and abetted the sale of DLG investments in order to sell its insurance products. And, in 2012, FBBC led a lawsuit against American National Insurance Company, asserting that it, too, had aided and abetted the sale of DLG securities for its own benefit. In Galper v. Jackson National Life Ins. Co. (Los Angeles Superior Court Case No. BC454632), FBBC and its co-counsel recovered more than $6.3 million dollars for its clients. And, in Kramer v. American National Ins. Co. (Los Angeles Superior Court Case No. BC480029), FBBC and its co-counsel recovered $1.5 million in settlements for its clients.