Aftermath of High-Profile Investment Fraud Case Includes Seizing Assets

17 July, 2023

money and gavel next to cuffed hands

Federal authorities have seized nearly $320,000 and two vehicles from Black Harbor Wealth Management founder Chris Dixon and his wife in connection with a criminal case highlighted in Indebted, the year-long investigation by The Greenville News into the buying and selling of military benefits.

Black Harbor had offices in Greenville and Seneca, South Carolina, and Asheville, North Carolina.

Hundreds of people around the country fell victim to an investment fraud scheme that used Indexed Universal Life “IUL” insurance policies combined with an unregistered security known as Future Income Payments “FIP,” and were sold as a way to have “tax-free retirement income for life.”

Unfortunately, the victims of this investment fraud lost their retirement savings, and the advisors and insurance agents made millions. Eventually, FIP collapsed and was found to be a Ponzi scheme.

Rikard & Protopapas has filed lawsuits against Black Harbor and its agents for over 60 people in South Carolina. Rikard & Protopapas have also pursued claims against Pacific Life Insurance Company for their role in the IUL scheme sold by Black Harbor and its agents.

The lawsuits seek to recover money for clients who suffered “devastating” losses of their retirement savings.

Many of these clients said they didn’t know the second investment was a cash advance to veterans through Future Income Payments, according to allegations in lawsuits.

The seizure of those assets stems from criminal charges against former executives with FIP, which provided cash advances from investors to veterans who were struggling financially. The veterans agreed to assign and redirect their military disability benefits or pensions to repay the money at annual interest rates as high as 240%, according to allegations in at least one lawsuit.

Seven judges in six states, including South Carolina, have ruled that these transactions are illegal.

The investors had no idea this kind of conduct was occurring and did not know that FIP was committing this type of fraud.

During the FBI investigation, records indicate that over 2000 investors lost at least $450 million when FIP collapsed in 2018. Some of the people who lost money are former clients of Black Harbor, which was part of a nationwide network of insurance agents and financial advisors that promoted the IUL policies and FIP as what was known as the IRA Reboot.

From 2016 to 2018, Black Harbor promoted this financial plan known as an IRA Reboot that included indexed universal life “IUL” insurance policies as a represented source of “tax-free retirement income.” Clients also were encouraged to buy a second investment to fund the annual life insurance premiums.

Many of these clients didn’t know the second investment was a cash advance to veterans through Future Income Payments, according to allegations in lawsuits. After the company failed and stopped collecting from veterans, Black Harbor’s clients could not afford the life premiums. When they defaulted on the premiums, the clients lost most or all of their money.

Robert Rikard, the attorney representing Black Harbor’s clients, said the insurance agents and financial advisers working with Future Income Payments didn’t do their homework.

“It’s unbelievable that these financial advisors and insurance agents in the middle, who are fairly sophisticated and fairly smart people, did not do 10 minutes of due diligence on the product they were selling — and they would have known that this was a horrible idea,” Rikard said.

Rikard & Protopapas has been representing investors in these cases since 2018 and has recovered over 50 million dollars for their clients who were harmed.

To read more about this investigation please visit the article by Greenville News.

Reach Out to Our Investment Loss Lawyers

Rikard & Protopapas has represented clients all over the state of South Carolina and the country in situations involving significant investment loss. Brokers and financial advisors do not always act in their clients’ best interests. We’re here to provide guidance in these troubling times and fight for the compensation you and your loved ones deserve.

If you lost money as a result of a broker’s actions, please contact us immediately to speak with our legal professionals. It doesn’t cost anything to speak with someone on our team. Call us at 803-805-7546 or fill out a contact form through our site.

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