Is This True? Fidelity Group Insurance and WT

by WinstonMorgan 8 Replies latest watchtower scandals

  • WinstonMorgan

    I got this in the mail. Perhaps representatives of the company would like to tell here if this is true?

    Two bigshot elders in New York City were in on the Fidelity Group Insurance scandal. The Pres. was Gene
    Duncan. The Vice Pres. was Dwayne Samuels who was also a substitute circuit overseer. Investigators
    found the company had about a hundred thousand dollars against tens of millions of dollars in unpaid claims.
    Many JWs working for the company went broke, but for some reason no one served any time. Many JWs had
    worked for them. Rumors were that there were kickbacks with some of the money going to Watchtower
    officials. You should find more about the story in an issue of the New York Newsday Newspaper for sometime
    during March of 2000.

  • WinstonMorgan

    Found no confirmation at the newspaper. Either this was untrue or else it is true but the newspaper title is wrong. Please delete.

  • WinstonMorgan
  • WinstonMorgan

    This is off the fourth link. Some of the other JWs in on this scam are also listed. Now I wondered about men at Bethel getting kickbacks? Would they care to comment here? Could that part also be true?

    Volume 7 Number 12
    Wednesday, March 21, 2001 Page 387
    ISSN 1528-9435
    Legal News

    Labor Department Obtains Judgments
    Restoring Up to $8 Million to Health Plan

    The Labor Department obtained consent judgments Feb. 6 providing for restoration of between $500,000 to $8 million to the International Workers' Guild health plan by the principals of Fidelity Group Inc. and health plan trustees (Chao v. Fidelity Group Inc., E.D.N.Y., CV-98-7683, 2/6/01), according to a department news release.
    The judgments also bar the Fidelity Group principals from having any dealings with or receiving compensation from employee benefit plans governed by federal employee benefit law.

    According to a department representative, the range for restoration is based on the defendants ability to pay, from full restitution of $8 million to a minimum amount of restitution of $500,000. The department seeks to recover the full amount but if the defendants can prove they don't have the ability to pay the full amount, then they must pay what they can but no less than $500,000.

    The judgments resolve a lawsuit filed by the Labor Department alleging that nine of the defendants permitted plan assets to be diverted for purposes other than to pay health benefits and underfunded the plan, thereby leaving participants with between $8 to $28 million in unpaid medical claims, the news release said.

    According to the news release, the plan, created in 1995, was marketed to small employers through consultants, insurance agents and related professionals. The department alleged that IWG was a "sham union" which operated the health plan for employers through "bogus" collective bargaining agreements with the National Association of Business Owners and Professionals, a sham "employer association." The plan was administered by Fidelity Group Inc., of Great Neck, N.Y. At its peak, it had over 10,000 participants in 32 states.

    Under the judgment with Eugene Duncan and Dwayne Samuels-the principals of the Fidelity Group-the defendants must each restore $250,000 under a payment schedule and restore annually to the plan 50 percent of their net income over a $50,000 threshold for 15 years, up to an $8 million cap, the news release said. They also are barred from serving as fiduciaries, receiving compensation, marketing services, and having business dealings with any plan governed by the Employee Retirement Income Security Act.

    According to the Labor Department news release, the settlement with Yvonne Duncan and Carol Samuels requires the defendants to restore annually to the plan 50 percent of their net income over a $50,000 threshold for 10 years, up to a $3.8 million cap. They also are permanently barred from acting as fiduciaries or service providers to any ERISA plan. In addition, separate settlement agreements were obtained with Fidelity Group, Inc. and NABOP, which have ceased doing business and turned their assets over to the plan.

    Earlier settlements with plan trustees Paul Askew, Charles Bradley, Terence Rhue and Noel Shaw, as well as two Fidelity Group management-level employees, David Spooner and Lee Jarmolowsky, provided various injunctive relief against doing business with ERISA-covered plans.

    Original Lawsuit

    The department originally filed its lawsuit on Dec. 15, 1998, alleging that the trustees and others violated ERISA when they:
    paid excessive administrative fees from health plan assets to Fidelity for its service as the third-party administrator;

    diverted assets of the health plan to IWG and NABOP in the form of sham union and association fees;

    failed to monitor and administer the fund's claims processing system and adjudication system, thereby resulting in a $25 million backlog of unprocessed health claims;

    failed to assure the financial soundness of the plan through the use of adequate underwriting and sound actuarial analysis;

    failed to establish adequate contribution rates and maintain cash reserves to assure the payment of claims;

    allowed the plan to become insolvent and used plan money for prohibited purposes; and

    permitted NABOP and IWG to be created or operated primarily to divert plan assets from the payment of health benefits.

    Under a temporary restraining order entered on Dec. 15, 1998, the court removed the plan administrator, Fidelity Group Inc., its officers Eugene Duncan, Dwayne Samuels, and its employees Lee Jarmolowsky and David Spooner; NABOP and its officers Yvonne Duncan and Carol Samuels; and the trustees from their positions with the health plan.

    The case resulted from an investigation conducted by the New York Regional Office of the department's Pension and Welfare Benefits Administration into alleged violations of ERISA.

    Copyright © 2001 by The Bureau of National Affairs, Inc., Washington D.C.

  • anewperson

    The Free Christians News also presented information on this and will in the future. In fact a letter on it came in just 1-2 weeks ago.

    [email protected]

  • anewperson

    I guess I could add right now that the women with the last name Samuels and Duncan are the wives of the top two men in on this. The same source provided another hot bit of information on a different topic involving New York City JWs. Subscriptions are free:

  • anewperson

    [email protected] has also confirmed on another thread on this but in the Friends section: "Simon, this story is true and one of the bigger WT scandals of recent years. I know Dwayne Samuels personally, as well as other brothers involved. One of the "bigshot" elders involved volutarily disassociated himself over a year ago due to the fallout and witnessing how the WT handled the affair. Why this story hasn't gotten more attention, I have no idea!" And is also running it.

  • ronin1

    Hey Everyone:

    It's definitely true. And Dwayne Samuels was an assistant c.o. in our circuit in Queens NY. He was an affluent and very emotional speaker when giving talks at the ciruit assemblies. Ask anyone. When Dwayne Samuels was scheduled to give a talk, hardly anyone missed or left their seats.

    In fact, I feel he was followed like some "god". But "false gods" get destroyed.

    We saw him and his family (in fact they sat not far from us) at last year's (2001) district convention at Nassau in Long Island, NY.

    I heard and believe he is returning the the meetings at the Kingdom Hall in our area although I am not sure which one.

    I heard he had a house valued at $500,000 in Long Island. If this is true, goes to show you where some of that money he stole went to.

    (Those who are put on high pedestals can always be brought low, and when they fall it usually is a very hard and rough fall).

    So be it!!


  • pratt1

    Unfortunately I just found this string. I apologize for responding to this two years after it was posted here. First of all this is absolutely true. I know three of the principals involved in this fiasco personally. They absolutely knew what they were doing. The sad thing is, that they were ripping off other JW's! What happened to brotherly love?? One of the elders invloved lived in a very affluent Long Island suburb outside of NYC. Both he and his wife drove luxury cars as a result of their illegal , and questionable business practices concerning this matter. The women involved are indeed the wives of the two main culprits. My understanding is that they were listed as officers of the company , and received a generous salalry , even though neither of them ever set foot in an office and did one minute of work, so they are required to make restitution as well. Sadly not only the people that paid the insurance premiums for this crappy service got burned, but many JW's that worked for this company ( thinking that it was legit ) lost their jobs. Some turned states evidence when the government swooped in and shut this down.

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