Ashley Moody sues Directed Benefits Foundation over $142M in missing benefits for the disabled

Attorney General Ashley Moody is suing an organization and its previous leader over $142 million that disappeared from a St. Petersburg-based trust fund meant for disabled individuals’ care.

The lawsuit names The Directed Benefits Foundation — also known as the Center for Special Needs Trust Administration — as well as founder Leo Govoni Jr., the Boston Finance Group (which is controlled by Govoni), Karen Fisher and Elizabeth Sauer.

At issue is $142 million in funds that went missing. Govoni has been accused of using more than $100 million of the nonprofit’s funds to loan other businesses under his control. The organization filed for bankruptcy on Feb. 9. It had been holding funds in trusts for disabled people for nearly a quarter century.

Moody’s lawsuit accuses the foundation, Govoni and other defendants of stealing money from beneficiaries, “many of whom were already the victims of at least one horrific event resulting in debilitating personal injury.” Many of the people whose funds were being held in the trust were disabled through medical malpractice or other accidents and were awarded funds to cover their ongoing care.

“As a result, the beneficiaries will not be able to supplement basic public assistance benefits and programs with their recovered monies, which are usually the result of extended civil litigation,” the lawsuit reads.

Fisher, one of the named defendants, served as the Director and Secretary of the foundation and Sauer also served as a Director and the foundation’s President.

The lawsuit alleges that defendants, “no later than June 2022,” “began to offer services as an administrator of Special Needs Trusts.” The lawsuit cites at least 48 such trusts and notes that The Center for Special Needs Trust Administration is “under investigation by the trustee for other tortious conduct and fraud.”

The foundation “was obligated to manage the trusts, maintain records for assets managed by third-party investment managers, respond to requests for distributions from beneficiaries, and make lawful distributions in a manner that ensured continued eligibility for public assistance benefits,” according to the lawsuit.

The lawsuit lists several financial discrepancies and claims the foundation “has solidified a track record of misconduct and mismanagement of its affairs.” It accuses foundation leaders of concealing financial deficiencies to beneficiaries and of withholding account statements after beneficiaries requested them.

In one example offered in the lawsuit, one beneficiary “demanded assurances that the foundation had not misappropriated monies.” Instead, the lawsuit claims Fisher “provided a false general ledger showing inflated, incorrect amounts” and withheld an official bank statement.

The lawsuit accuses the foundation of having a “business model” that accesses “capital from vulnerable populations such as beneficiaries of special needs trusts in exchange for low, below-market rates that it has no intent to repay, while using that capital to engage in reckless, high-interest loans in order to enrich” defendants Govoni and others.

It further states that the Boston Finance Group “has directly caused over $142,000,000 in damages to the beneficiaries” of the foundation, “ruining the lives of hundreds of vulnerable beneficiaries.”

The lawsuit does not specify a total number for damages sought on behalf of beneficiaries allegedly victimized and defrauded by defendants, but notes that law allows for civil penalties of $10,000 for each violation of the Florida Deceptive and Unfair Trade Practices Act and $15,000 for each violation victimizing “a senior citizen or person who has a disability, or which was directed at a military servicemember, their spouse or minor child.”

The suit also seeks to order defendants to divest in any interest in any enterprise; enjoin them from engaging “in any activities involving or connected with the solicitation and collection of trust property; and various other trade practices.

The lawsuit comes after News Channel 8 investigated lost money in March.