Guardian named in latest 412(i) case

Henry Norris and Norris and Associates filed suit in the Circuit Court of Escambia County Florida on June 18th against Guardian Life Insurance Company of America, Webb Financial Group, O'Shields and Associates, Adams and Associates, and Creative Consultants, LLC.

In addition to the usual claims which are made in 412 cases, including unsuitability, etc. the plaintiff directly challenges the promotional materials provided to him by Guardian. According to the complaint, the Guardian promotional material presented to the plaintiff provided the following:

a. The IRS permits older business owners to make higher annual contributions to this plan than to virtually any other type of qualified plan.

b. The Fully Insured PLan (the 412(i)) can be an excellent solution for those ages 35 or older.

c. You work hard for your money. Why pay any more in taxes than is necessary? Wouldn't you rather reduce taxes and have that money growing tax deferred to provide for your family's security at retirement?

d. With a Fully Insured Plan it can. Every dollar you contribute is tax deductible to your business. You can use the money you'd normally lose in taxes to fund your own retirement.

e. The Fully Insured Plan can provide you with many thousands of dollars in tax deductions now...and leave your with many thousands of dollars more later, when you retire.

f. Advantages for Older Business Owners including:

*Maximum Benefits and Contributions;
*Guarantee Asset Growth;
*Contributions-100% Tax Deductible;
*Pre-Tax Dollars Lowers Life Insurance Cost;
*Dividends Can Lower Contributions;
*Higher Level of Family Protection



In addition, the plaintiff claims that the defendants recommended and set up a separate benefit fund on behalf of his employees by the name of United Employee Benefit Fund. James E. Holland, Chief Actuary for the Internal Revenue Service has referred to these funds as "the phony Union Scam."

The plaintiff also claims the defendants also unilaterally took loans against the policy, triggering an automatic disqualification of the plan under Section 412(i).

In discussions with Guardian representatives about the filing of a form 8886 the Plaintiff claims that he was advised that such action was "harsh and unnecessary" by Guardian Defined Benefit Analyst Peter Debruel. Plainiff also claims that Debruel and fellow Guardian Benefit Analyst John Paulis informed him that although the loan disqualified the plan, there was no taxable event because there was no distribution.

Henry Norris and Norris & Associates are represented in this case by the firms of Pittman Dutton Kirby & Hellums and Whatley Drake & Kalis.

For more information, contact Chris Hellums at ChrisH@pdkhlaw.com.