SPOKANE -- Attorney General Christine Gregoire today filed suit against two marketing companies that allegedly scammed senior citizens out of their life savings by encouraging them to buy high-risk or bogus investments, including insurance products and living trusts.
The lawsuit, filed in Spokane County Superior Court, also alleges that the defendants encouraged Spokane seniors and others throughout the country to use their home equity and retirement accounts to purchase investments that would never benefit them because of their age. Seniors were contacted by direct mail, public seminars and through internet websites.
Named as defendants are National Marketing Solutions (NMS), Senior Asset Preservation Services, Inc., (SAPS), Jeffrey Mitchell and Michael D. Smith. The suit alleges Mitchell and Smith formed NMS in 2001 and SAPS in 2003; they recruited about a dozen people to act as agents to sell insurance, estate planning and financial products to consumers in Washington and elsewhere.
Mitchell and Smith also marketed products from two other companies, Mobile Billboards of America (MBA) and Heritage America. MBA was touted as a low to medium risk investment that promised seniors, "Monthly Income You Can Count On!"
Seniors were encouraged to invest in a scheme to install two-sided billboards on the sides of large trucks. In return, the investors were promised a 13.49 percent return, plus their original $20,000 investment, at the end of seven years. The lawsuit states MBA is in reality a high-risk venture suitable only to those who can afford to lose their entire investment.
Heritage America sold estate planning services that were not beneficial to seniors.
Among other violations, the defendants are accused of deceptive advertising, misrepresentation, unfair business practices and the unauthorized practice of law. The lawsuit calls for a fine of up to $2,000 per violation and restitution to consumers.