A financial planning firm has settled all but one claim related to an embezzlement scheme conducted by a rogue adviser over an eight-year period ending in March 2008.
Hantz Financial Services Inc. of Southfield, Mich., refused to release details of the various settlements, but the original claims totaled $2.6 million, according to court documents.
With a majority of the claims resolved, including one last week that averted a lawsuit against the company, Hantz Financial will now set its sights on the widow of Michael Laursen, the Midland, Mich.-based adviser accused of defrauding 26 of his clients.
ALLEGED CONSPIRACY
Hantz Financial continues to allege that Julie Laursen, 51, was complicitous in a scheme that involved defrauding her husband's clients, many of whom were their friends and neighbors.
“We are actively pursuing our case against Julie Laursen,” said David Shea, Hantz Financial's in-house legal counsel.
“We are bunkered in for a lengthy fight.”
According to court documents, Mr. Laursen, who joined Hantz Financial in 1998, started skimming money from clients in 2000. It alleges that he instructed his customers to make their checks out to Henry Firearm Services instead of depositing the money into Hantz accounts.
Mr. Laursen then transferred the embezzled money from the HFS account to his personal account at a different bank, the court documents said.
The crime came to light only after one of the clients filed a complaint with Financial Industry Regulatory Authority Inc. of New York and Washington requesting information about discrepancies in investment statements.
Mr. Laursen was notified of the Finra complaint March 7, 2008. Two days later, he died of a gunshot wound sustained while he was alone on a pistol range in Midland. Police ruled that Mr. Laursen tripped at the range, and the gun he was carrying went off accidentally.
While no one, including Ms. Laursen, is disputing that he stole the money from his clients, Hantz Financial continues to focus on her involvement in the scheme.
“All the individuals defrauded were friends and neighbors of the Laursens, and [Julie] was right there convincing them that her husband was a good guy,” said Kenneth Silver, an attorney with Bloomfield Hills, Mich.-based Hertz Schram PC, which represents Hantz Financial.
“We believe Julie Laursen was complicit,” Mr. Silver said. “There's no way she didn't know what was going on.”
Ms. Laursen maintained in an interview that during the 18 years she was out of the work force and “taking on the traditional role of housewife,” raising four children, she was not intimately familiar with the family finances or with her husband's business dealings.
“It was not my job to pay attention to the numbers,” she said.
PROBATE COURT
Hantz Financial's lawsuit seeks to recoup all or part of the settlement money it paid out to clients by going after assets that were transferred to Ms. Laursen upon her husband's death.
A probate court representative has been assigned to liquidate the assets that were not transferred to her, including a boat, a camper, three recreational vehicles, 25,000 shares of Hantz Financial company stock and an extensive gun collection.
This year, a large portion of the gun collection sold for $190,000, which brought total estate assets to $413,000, according to court documents.
According to standard probate procedures, a portion of those assets will be distributed first to the Laursen family, leaving creditors such as Hantz Financial further down the list. Meanwhile, the estate is being eaten up by legal fees.
One target on which Hantz Financial is likely to focus is $1.4 million worth of insurance and retirement assets that have been frozen since shortly after Mr. Laursen's death.
Ms. Laursen's attorney, James Johnson, who runs an eponymous law firm in Auburn, Mich., is seeking dismissal of the case as frivolous.
According to Mr. Johnson, in the 10 months since Hantz Financial filed the lawsuit, the company has done nothing to move the case forward.
“They filed that case to cast aspersion on Julie, but they have no evidence, and they have done nothing,” he said.
As part of the effort to get the case dismissed and show that Hantz Financial shirked its responsibility to monitor Mr. Laursen, Mr. Johnson deposed a Midland branch supervisor last week. Mr. Johnson also plans to depose Mr. Shea and John Hantz, the company's founder.
Getting access to Mr. Hantz will not be easy. The company's legal team has made it clear every effort will be made to prevent the deposition.
“My guess is, that won't happen, and I've already told [Mr. Johnson] I'm not going to make it easy for him,” Mr. Silver said. “He is only doing it for the psychological effect of deposing John Hantz and to harass him.”
Company representatives declined to make Mr. Hantz available for comment for this story.
Hantz Financial employs 250 reps and 40 certified public accountants working out of 22 offices in Michigan and Ohio.
E-mail Jeff Benjamin at [email protected].
