Son of Super Swindler

The unsettling link between a group of firms that sell financial planning services to elderly Californians and one of the most notorious con men in U.S. history

Rarely does a journalist happen upon a question that's magical, eliciting a response so extraordinary as to hint at truly untoward goings-on. For me, such a magic moment came last month, in a low-ceilinged conference room in a two-bit hotel next to the Alameda shore. I thought I was asking a routine question; actually, I'd found the passkey to a netherworld.

Southern California attorney Gary Lane had spent the previous hour pitching me, and a half-dozen older folks, on the advisability of purchasing "living trusts," legal constructs that can, in theory, allow elderly people to protect their assets from probate lawyers and tax collectors. I was investigating a type of firm popularly known as a "trust mill"; these mills generate money by advertising living-trust seminars widely in newspapers, using attorneys to sell the service of writing a living trust, and then employing hard-charging salesmen of financial services to aggressively pursue elderly attendees. In this case, Estate Planning of California, or EPoC, had advertised a dozen or so seminars in different cities around the Bay Area, and I was curious to see what was being offered.

According to the State Bar of California, attorneys who help market financial products must explain "the full extent of the lawyer's business and financial relationship with the marketer." The reason for this regulation is fairly obvious: Trust mills make most of their money by sending financial-product salesmen to customers' homes, where the salesmen hand-deliver completed legal documents. These documents can involve the control of large amounts of money, and correspondingly large sales commissions. If an attorney has a stake in those commissions, his legal advice to customers could, at least theoretically, be compromised.

Toward the end of Lane's pitch, I raised my hand.

"Could you please explain your relationship to Estate Planning of California?" I asked.

Lane said he'd answer my question later. I said it was a simple question and asked if he could briefly respond. He again said he'd answer later. I asked again. He ordered me to leave the room.

"It's a simple question," I said. "Couldn't you just briefly explain your relationship to the company?"

"I'm telling you to leave right now," said Lane, temporarily abandoning his salesman's smile. "You're trespassing."

"And I'm telling you I'd like you to answer the question," I said.

"You're trespassing," he said. "If you don't leave, I'll call the police."

Later, I discovered that in inquiring about the specifics of business relationships involving EPoC, I had broached more than a touchy subject. I'd apparently stumbled onto a link between some West Coast trust mills and the operations of one of America's more notorious crime families, a family whose leaders were recently found guilty of wire-fraud charges related to a multimillion-dollar Florida-based financial fraud scheme.

I'd encountered an operation that connected millions -- perhaps even billions -- of dollars of elderly Californians' assets to a firm called Great American Trust Co., which, a Securities and Exchange Commission complaint says, exists as a front for an investment program that was "wholly fictitious and designed solely to defraud investors of their money."

I'd nudged open a door that fed into a maze that, when followed to its end, led to men known as Super Swindlers.


Living trusts have good and proper uses, and there is no evidence I know of that EPoC or Lane has touted or sold anything but legitimate estate planning tools and financial products. Still, trust mills are notorious for high-pressure sales tactics and client complaints. So I expected Lane might be chary about answering questions.

But really: trespassing?

When I got back to my office the next day, I did a little poking into EPoC, a firm that, according to documents in the California Secretary of State's Office, has existed for just a few months. I also looked into a company called EPI-Estate Planning Inc., which Lane told us during his seminar was EPoC's "predecessor company." He said the name had been changed for business reasons, and didn't elaborate further.

EPI-Estate Planning was "an established, 4-year-old company," he assured us. "It's the same people in both companies."

Sure enough, Lane was listed as a seminar presenter in a July 2002 full-page Los Angeles Times ad for EPI-Estate Planning Inc. And the 2002-2003 alumni magazine of the University of San Diego Law School, where Lane graduated in 1969, says he had been a vice president and general counsel for EPI-Estate Planning Inc.

When I looked up EPI-Estate Planning Inc. at the California Department of Insurance, I got a whiff -- merely a whiff -- of the reasons that questions about this cluster of companies might be unwelcome. EPI-Estate Planning -- which California records say is part of a group of firms with the names EPI, EPICO, the American Association of Independent Paralegals, and AAIP, all of which pitch living trusts at seminars -- has been subject to a Department of Insurance investigation.

So far, the investigation has produced written "accusations" -- the Insurance Department's version of a regulatory complaint -- contending that, among other things, the company has sent an employee, who happened to have been a felon, into an elderly client's home, where he bullied the client into signing a release form granting access to the client's assets. The employee then used the assets to buy annuity insurance contracts without permission, paying himself thousands of dollars of commissions, the Insurance Department contends.

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