Frequently Asked Questions
Q: What is happening in the court case?
A: Recent developments. On April 23, 2009, the court entered an Agreed Order Continuing Case, which sets a date for the hearing on the State’s application for a permanent injunction against National Life Settlements, LLC, a Texas Limited Liability Company; National Life Settlements, Inc., a Colorado Limited Liability Company; NATT, LLC, a Texas Limited Liability Company; Howard Glenn Judah, Jr. and Gregory F. Jablonski a.k.a. Gregory F. Joblonski. These individuals and entities are the Defendants in this case. The permanent hearing is currently scheduled for 9:00 a.m. on June 29, 2009, but the date could be rescheduled. The Receiver will post information concerning the hearing date and time on this web site. Investors are welcome to attend the hearing.
In the Agreed Order Continuing Case, the court also imposed a constructive trust over the property in the Receiver’s possession. This trust was imposed for the sole benefit of individuals whom the court determines at a later date are holders of allowed claims against the Defendants. A constructive trust is a legal remedy under which a court takes control of money that was acquired by fraud or certain other types of improper conduct.
Earlier developments. On February 13, 2009, the Texas Attorney General, at the request of the Texas Securities Commissioner, filed a lawsuit against the following defendants: National Life Settlements, LLC, a Texas Limited Liability Company; National Life Settlements, LLC, a Colorado Limited Liability Company; NATT, LLC, a Texas Limited Liability Company; Howard Glenn Judah, Jr.; and Gregory F. Jablonski a/k/a Gregory F. Joblonski. The State’s lawsuit alleges that the Defendants have committed securities fraud. A state district court in Travis County, Texas issued a temporary restraining order and order appointing Janet Mortenson as temporary receiver on February 13, 2009. The court entered a temporary injunction and order appointing Janet Mortenson as permanent receiver on February 26, 2009.
Q: Why are the Attorney General’s Office, the State Securities Board, and the Receiver all involved in this matter?
A: The State Securities Board investigates alleged violations of the Texas Securities Act, including allegations of securities fraud. The Securities Board’s attorneys and investigators work with the Attorney General’s office in seeking injunctions, restitution, and receiverships in civil courts in cases in which the State alleges that securities fraud has occurred. The Securities Board also refers cases for criminal prosecution in circumstances that it deems appropriate. The Receiver does not know whether there will or will not be criminal prosecutions related to this case. Decisions regarding criminal matters are made by prosecutors’ offices, and the Receiver does not participate in making those decisions.
The Attorney General’s Office represents the State and state agencies, such as the Securities Board, in court. The main purpose of the lawsuit that the Attorney General filed, at the request of the Securities Commissioner, was to obtain an injunction to stop National Life Settlements from committing securities fraud and to request that the judge appoint a receiver to take control of assets derived from the fraud.
A receiver is a neutral
party, often an attorney, who is appointed by a court to seize
assets in lawsuits in which there are allegations of fraud or
mismanagement. A
receiver’s job is to gather and protect assets under the court’s
supervision.
The purpose of the
receivership is to bring all assets derived from the alleged
securities fraud into the custody and control of the court.
The court has directed Janet Mortenson, as receiver, to seize
assets and to safeguard those assets until the court enters further
instructions. The
Receiver reports to the court. She does not work for the Securities
Board or the Attorney General.
Q: What did National Life Settlements do with the money it accepted from investors?
A: A certified public
accountant on the staff of the Securities Board is leading the
investigation concerning what National Life Settlements did with the
money it accepted from investors.
Bank records, including thousands of checks and transfers
that came into and went out from National Life Settlements’
accounts, are being examined thoroughly.
Once
the Securities Board has completed this investigation, there will be
a clearer picture of what happened to the money in this case. The
Receiver has seized bank accounts as well as escrow funds,
automobiles, a house, furniture, and office equipment. She is
investigating the records of National Life Settlements to determine
the value and location of other assets the company may own. The
Receiver is also investigating transfers of money that occurred
prior to the receivership, including the Defendants’ payments of
commissions or referral fees.
The Receiver will pursue all credible leads to assets, no
matter where the assets are located.
Q:
Where is the money that the Receiver seized?
A: The Receiver purchased United States Treasury bills with most of the money she seized. United States Treasury bills are the safest investment available in this country. The remainder of the money is in FDIC-insured bank accounts. The interest earned on Treasury bills and bank accounts is an asset of the receivership and will be disbursed according to the Court’s instructions.
Q: How much money will I get back?
A: The
receivership court will determine the method of calculating
investors’ allowed claims.
Each investor with an allowed claim will receive a pro-rata
share of the funds the Receiver has recovered.
It is not possible at this time to estimate how much money
will be recovered and available for distribution to investors.
Q: When will the Receiver distribute the assets she has seized?
A: At this early stage of the investigation, the Receiver cannot estimate the length of time it will take before recommendations can be made to the court concerning a distribution of assets. The Receiver cannot make any recommendations to the court until the Securities Board’s analysis of the bank records is complete. Because it will be necessary to reconstruct thousands of financial transactions, this process will likely take several months.
Q: How does the Receiver get paid?
A: The court ordered that the Receiver’s compensation and the expenses of the receivership will be paid from the assets the Receiver recovers in this case. The Receiver is paid an hourly rate, not a percentage of recovered assets. The court must approve all compensation paid to the Receiver, and the court directed the Receiver to keep receivership expenses as low as possible consistent with an accurate and efficient administration of the receivership estate.
Q: I sent a check to National Life Settlements after the receivership was initiated. What happened to that check?
A: The court directed the Receiver to retain, and not deposit, all uncashed checks from investors. Accordingly, the Receiver has retained all checks that have come into her possession. Additionally, the Receiver closed all of National Life Settlements’ bank accounts, so any wire transfers that National Life Settlements’ former banks received were returned by the banks.
Q: What should I do if I move or change phone numbers?
A:
It is your responsibility to notify the Receiver in writing of any
change in your address or phone numbers. You may fax
this notice to the Receiver at (713) 610-3892, mail it to PO Box
66490,
Q: How do I contact the Receiver?
A: The Receiver’s telephone number is (214) 914-4274. The purpose of this phone line is to receive information about the Defendants’ assets. Please do not call to ask for status reports or updates. Individual reports to investors will not be made. All investors will receive the same information at the same time from the Receiver. Accordingly, periodic updates will be posted on the receivership web site at www.nlsreceivership.com.