Elderly grandmother who lost life savings is first to successfully challenge insurance giant
LOS ANGELES, Aug. 31, 2016 /PRNewswire/ — A Los Angeles Superior Court jury awarded $15.6 million to a grandmother who lost her life savings in a bogus investment fund that was offered by a MetLife insurance agent.
After an eight-week trial, the jury unanimously found that MetLife and two of its subsidiaries, New England Life Insurance Co. and New England Securities, and a former managing partner, Tony Russon, were liable on four civil counts including aiding and abetting violation of California securities laws, negligence, and aiding and abetting deceit and financial elder abuse.
The jury found that MetLife allowed Russon to use insurance sales meetings with prospective customers of MetLife to promote investments in Diversified Lending Group (DLG), a real estate fund that was run by convicted felon Bruce Friedman. The Securities & Exchange Commission sued Friedman and DLG in 2009, alleging that the enterprise was actually a $216 million fraudulent scheme to sell unregistered securities that financed Friedman’s lavish lifestyle.
Christine Ramirez, a retired Simi Valley mortgage processor, invested nearly $280,000 in DLG on the “guarantee” that the unregistered – and ultimately worthless – securities would provide a 12% annual return.
On Wednesday, the jury awarded Ramirez $10 million in punitive damages from MetLife Inc., $2.5 million in punitive damages from New England Securities, $2.5 million in punitive damages from New England Life Insurance Co., and $330,000 in punitive damages from Russon. On Tuesday, the jury awarded Ramirez $239,890 in compensatory damages.
“I am so grateful to the jurors for seeing through MetLife’s finger-pointing argument that they weren’t responsible for the loss of my retirement savings,” Ramirez said. “I am grateful to the judge who presided over my case, to my attorneys who doggedly pursued this case to a successful conclusion, and I am looking forward to the other investors in DLG getting their justice as well.”
Ramirez is one of 98 DLG investors whose pursuit of a class-action case against MetLife was denied last year. Individual cases, however, were allowed to proceed and Ramirez’s was the first to go to trial.
She was represented by Thomas Foley, a founding partner in Foley Bezek Behle & Curtis LLP, who was co-lead counsel with Richard E. Donahoo of Donahoo & Associates PC.
“Our client is finally getting the compensation she deserves for her lost savings,” Donahoo said. “The peaceful retirement she worked so hard for was stolen from her.”
Foley noted that the outcome of the Ramirez case bodes well for the firm’s other clients who invested in DLG.
Testimony at the trial proved that Friedman and DLG were brought into the MetLife sales operation by Russon, who was owed $750,000 by Friedman. Friedman promised Russon half of any future income from the sale of DLG securities to help Friedman repay his debt to Russon. Friedman fled the country after the SEC sued him, but died in jail in France in 2012 while awaiting extradition to the United States.
Ramirez’s legal team successfully argued that MetLife was negligent in not adequately training and supervising its affiliates.
“The evidence we presented in this case clearly showed that MetLife was aware that the branch office run by Tony Russon was not following MetLife’s own policies and procedures, and that they failed to act to correct this dangerous behavior,” Foley said. “If they had, Ms. Ramirez and hundreds of others like her would not have been victimized by this investment fraud.”
Ramirez was represented by Thomas Foley of Foley Bezek Behle & Curtis LLP; Richard E. Donahoo of Donahoo & Associates PC; and John Stillman of Good Wildman.
The case is Ramirez v. MetLife Inc. (Case No. BC576608) in Los Angeles Superior Court, Judge Kenneth R. Freeman presiding.