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The Pearce Law Firm Investigation Summary of the Tri-Med Ponzi Scheme

In the last month, the Law Offices of Robert Wayne Pearce has gathered clients and facts from the Pinellas County Circuit Court files relating to the Tri-Med Ponzi Scheme. It appears that the Tri-Med Lawsuit Defendants and others, including sales agents who worked outside the Tri-Med organization as stockbrokers, investment advisors, accountants have schemed or unwittingly assisted and profited from the scheme to offer and sell at least $13 million in unregistered securities in the form of “notes,” “evidence of indebtedness” and “investment contracts” in violation of the registration and anti-fraud provisions of Chapter 517, Florida Statutes.

The perpetrators of the scheme made false claims and purported above market rates of return to lure investors, including the Plaintiffs, into making purported investments in medical practice related account receivables securitized by so-called letters of protection (“Letters of Protection”). Only a small portion of the at least $13 million raised from investors has been used to purchase medical practice accounts receivable. Instead, the Tri-Med Lawsuit Defendants used the majority of the funds to pay off earlier investors, pay for other items not disclosed to investors, or to disburse among themselves.

According to the Receiver, evidence gathered from investor interviews, bank account records, and other sources indicates that since October 2011, the Tri-Med Lawsuit Defendants and others, including the Defendants, have lured at least 232 investors to invest $13 million in the Tri-Med Letters of Protection investments (the “Tri-Med Investments”). Despite this inflow, Tri-Med has only transferred $2.8 million to a law firm trust account as specified in each investor’s written investment contract. The remaining at least $10.2 million was never placed into the law firm trust account as the perpetrators claimed it would be. Of the remaining $10.2 million, approximately $6.2 million has been spent on the personal expenses of Tri-Med officers, directors and other employees and on other expenses not related to the Investments.

Throughout 2013, some of the investors with matured Tri-Med Investments were rolled into new Tri-Med Investments, while others who chose to close out their investment(s) were paid off with funds provided by new investors. The new investors and rolled over investors were never apprised of the true insolvent nature of the operation. The Tri-Med Lawsuit Defendants, with assistance of their sales agents, perpetrated a classic Ponzi Scheme for almost three years.

When your stockbroker or financial advisor recommends that you invest in a particular security, he or she has the responsibility to tell you the truth about your investment and fully disclose all of the risks associated with the investment along with the benefits. Furthermore, brokerage firms and their representatives have a fiduciary duty to do their own due-diligence with respect to the investments they recommend in order to protect investors. Should they fail to do so, they may be held liable for investors’ losses.

The Law Offices of Robert Wayne Pearce, P.A., is representing investors who invested in Tri-Med based on false or inaccurate information and their financial advisors’ failure to do due-diligence and fully investigate this company and its investment program.

Have you suffered losses resulting from a Tri-Med investment? Did your stockbroker, investment advisor, accountant or other finance professional recommend that you invest in Tri-Med? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against financial advisors, stockbrokers, and their affiliated stockbrokerage, investment advisory or accounting firms who offered and sold these unregistered Tri-Med securities to investors.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.