Chicago Sun-Times news service published this deansguide article 1-21-09
In what must be the most frustrating of 1031 exchange collapses, clients of title insurance mainstay LandAmerica have filed a $330 million class action suit against the failed LandAmerica Exchange Services, part of LandAmerica title, and Sun Trust Bank. According to the Richmond Times-Dispatch story the charges specifically focus on actions of “defrauding clients by using their money to pay off other clients.” That would sound like an old fashion ponzi scheme and have we not heard this story before in the Ed Okun 1031 Tax Group travasty?
Two Principles Named
According to the Richmond Times-Dispatch’s Emily C. Dooley, two top executives for LandAmerica 1031 Exchange Services were named in the suit a Stephen Connor and G.William Evans. “Evans is also the chief financial officer for LandAmerica Financial Group” according to the story.
The Final Final
According to Dooley’s report “The lawsuit claims that LandAmerica used money from new customers to pay off older customers whose money had become inaccessible because it was invested in auction-rate securities, a type of credit that froze in February.”
Remarked Robert L. “Rusty” Brace California attorney for one of the victims: “Once that market failed, [LandAmerica Exchange Services] should have shut down. . . Our money was used to pay those other exchangers.”