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National Lending Corp/Hao Nguyen
Re: WFG(WMA)/WRL Whistleblowers: Do the Right Thing!
Subject: Re: WFG(WMA)/WRL Whistleblowers: Do the Right Thing!
Posted: 2/5/2003 9:42:52 PM
In Response to:
To those of you in the WFG(World Financial Group), formerly World Marketing Alliance(WMA), or World Group Securities, formerly WMA Securities, or Western Reserve Life(WRL, aka Intersecurities):
If you are honest, and you have begun to notice that you are surrounded by dishonest people engaging in illegal/unethical activity, you have a moral duty to report the individuals and activities in question to the proper authorities. A new whistleblower-protection law has been enacted by Congress(The Sarbanes-Oxley Act of 2002).
Section I: Moral Self-Assessment
(1) Does it disturb you that variable-insurance products are regularly being sold to customers for which insurance is completely unsuitable?
(2) Does it disturb you that the variable-insurance products which account for most product sales, like the WRL “Freedom Elite” VUL, have pickpocket mortality and subaccount fees which rob the customer of cash value through reduction in the actual earned interest rate? Have you actually tried running the numbers with your business calculator, based on information in the actual WRL product prospectus?
(3) Does it disturb you that the Cost of Insurance is not listed in most, if not all, of these WRL variable-product prospecti?
(4) Does it disturb you that multi-level-marketing recruits are encouraged to purchase these insurance products themselves as part of a product-based pyramid scheme? Have you ever looked at the lapse rates of the policies sold through your company and compared them to industry norms? Do you realize that when these recruits lapse on the policies any time during the first 7-10 years they lose money to surrender charges? Those surrender charges are shared by the Company’s Bermuda Reinsurance firm(now GPH) and WRL, American Skandia, Kemper and Pacific Life.
(5) Does it disturb you when applications are signed in advance, signatures forged, documents are backdated, and applications are submitted as “approved,” even though constraints of time dictate that no proper approval process could possibly have occurred?
(6) Does it disturb you when fraudulent WRL VUL accounts, some with false SSNs and names, are taken out and canceled during the grace period(NTO accounts) for CEO/MD drives, e.g.?
(7) Does it disturb you that many of your former/current company leaders(Humphrey, Holm, Thawley, X. Nguyen...) hold/held concurrent registration with Primerica(formerly A.L. Williams)? Do you realize that they must be lying to one entire set of 2 sets of their customers, since Primerica tells everybody that cash-value insurance like VUL is “trash-value” insurance?
(8) Does it disturb you that Humphrey chose as his WMA Securities President(Barry Clause) someone who was so morally compromised that he had previously been caught lying in sworn testimony in US Federal Court(US District Court, Dallas: Cause No. 83-02089-L)? Why was someone so obviously utterly dishonest chosen for this position?
(9) Why doesn’t the WFG have its own bulletin board, where agents may post “true” information about prospects for “success” and “variable-insurance products?” Why are agents who post “anonymously” on this message board, and others, instructed by your company to give aliases and phony e-mail addresses? Why did the NASD fine the WMA for even the vague information once contained on WFG/WMA web-site?
(10) Does it disturb you that the WMA/WFG has knowingly presented to you as “successes” speakers at national conventions such as Hao Nguyen, or numerous upline officers in “WMA Wealth Builders,” etc., who have actually been forced to declare bankruptcy, or have substantial unpaid liens held against them? The information comes from their own NASD CRD records, submitted by these lying swine and their cohorts in WMA/WFG corporate itself. This constitutes a securities law violation, especially with respect to sale of an unregistered security. You should report such activity to the Federal Trade Commission(FTC), US Securities & Exchange Commission(SEC), and state securities regulator. Claiming that following/duplicating any type of business-format or turnkey system will guarantee success similarly constitutes the illegal sale of an unregistered security.
Section I: Whistleblower Information
Following are quotations are from the December 16th 2002 “BusinessWeek” article “Year of the Whistleblower” by Paula Dwyer, Dan Carney, Amy Borrus, Lorraine Woellert and Christopher Palmeri. A link to the full article is provided on this page.
“This year, dozens of ordinary people have been put in extraordinary positions throughout Corporate America,...Behind the scenes, they have all played a critical role in providing enforcers with virtual road maps around complex accounting maneuvers. "Whistleblowers give us an insider's perspective," says Linda Chatman Thomsen, the SEC's deputy director for enforcement, ‘and have advanced our investigations immeasurably(page 107, paragraph 4, in the actual magazine article).’"
“It would not be too glib to call 2002 the Year of the Whistleblower. The spectacular blowups at Enron and WorldCom have sensitized employees to the devastation caused by corporate crime. That has helped create a "do the right thing" culture in which employees believe they have little choice but to ring the alarm when they suspect misconduct, despite potentially high personal costs. Watkins and Cooper have helped recast whistleblowers from crackpots to national champions, says Stephen Meagher, a former federal prosecutor who represents whistleblowers(page 107, paragraph 5).”
“More important, the landmark Sarbanes-Oxley Act of 2002 gives those who report corporate misconduct sweeping new legal protection. An executive who retaliates against a corporate whistleblower can be held criminally liable and imprisoned for up to 10 years(page 107, paragraph 8).”
“Corporate lawyers also have special responsibilities under the new law. If they come across evidence of misconduct, they must report it to top management. If there is no response, the lawyer must report higher up the line, to the board. The aim is to prevent lawyers from sitting idle--and claiming attorney-client privilege--when they see laws broken(page 108, paragraph 2).”
....DO I HAVE THE GOODS?
Gather documentary evidence that proves your case and keep it in a safe place. Keep good notes, perhaps even a daily diary(chart at bottom of page 108).”
“Some,...are by-the-bookers. These are people highly steeped in a particular discipline, from engineering to accounting to medicine, who take an almost personal offense when professional standards are compromised(page 109, paragraph 2).”
“Another type, the self-protectors, know about problems that could lead to an investigation. They might even be responsible for some of them. By coming clean, they clear their consciences--and lessen the likelihood of going to jail. That may explain the actions of Rite Aid President Timothy J. Noonan, who wore a wire and recorded Grass[Rite Aid CEO Martin L. Grass] allegedly plotting to foil the grand jury investigation. On one recording, Grass is quoted as saying that investigators would never get hold of a computer containing evidence that he backdated letters ‘unless they use a Trident submarine(page 109, paragraph 5).’"
Re: National Lending Corp/Hao Nguyen
David G. Frey, Howell, NJ
Consent Order #E06-67, April 21, 2006; Producer issued change of broker letters to an insurer that were not properly signed by the insureds. Sanction: Fine - $2,500.
Granite Financial, LLC, Cutchogue, NY
Consent Order #E06-59, April 4, 2006; Producer failed to advise the Department of its current business address. Sanction: Fine - $250.
Martin W. Melendez, Newark, NJ
d/b/a Around the Clock Bail Bonds, Newark, NJ
Consent Order #E06-57, April 3, 2006; Respondent failed to return collateral for a bail bond after the bail had been discharged (Melendez represented that he forwarded the collateral to the surety’s general agent) – collateral that was ultimately returned to the indemnitor by the surety; and using an unregistered trade name. Sanctions: Suspension of license for 60 days; Fine - $1,500.
Charles Newton, Jr., Midlothian, VA
Consent Order E06-70, April 5, 2006; Producer failed to advise the Department of his current home address. Sanction: Fine - $250.
Hao D. Nguyen, Houston, TX
Consent Order E06-73, April 24, 2006; Producer submitted life insurance applications on behalf of residents on NY purporting to have been signed in NJ but which in fact were signed in NY. Sanction: Fine - $10,000.
James L. Pray, East Orange, NJ
Consent Order #E06-66, April 21, 2006; Producer issued electronic binding numbers for which PAIP did not receive applications. Sanction: Fine - $1,000.
Lorraine Anne Wilson, San Francisco, CA
BISYS Commercial Insurance Services, Inc., San Francisco, CA
Consent Order #E06-75, April 24, 2006; Producers accepted two surplus lines placements from a producer unlicensed in NJ; failed to assign and provide required transaction numbers; and failed to properly file the required tax returns on two surplus lines transactions. Fine - $1,500 (allocated $750 to Wilson and $750 to BISYS).
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