Janelle Irwin Taylor
Karen Fisher, one of the named defendants in a lawsuit filed last month over $142 million in missing benefits for disabled people, has reached an agreement with the Attorney General’s Office requiring her to fully cooperate with the Office’s ongoing investigation into the organization.
The final judgment against Fisher levies a $10,000 fine, but suspends that amount pursuant to her ongoing cooperation with investigators and adherence to terms in the judgment.
While the judgment “does not constitute an admission of liability,” Fisher “admits and stipulates that all trust beneficiaries of Tampa-based The Directed Benefits Foundation, Inc. are injured purchasers of Defendants’ trust administration services,” according to a copy of the final judgment filed last week.
At issue is $142 million in funds that went missing. Foundation founder Leo Govoni Jr. 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.
Attorney General Ashley 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.
Fisher, one of the named defendants, served as the Director and Secretary of the foundation.
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.
The judgment with Fisher was reached after she agreed to fully cooperate with the ongoing investigation.
While the judgment suspends the $10,000 fine, it also includes several provisions Fisher must follow, or risk having the judgment reinstated.
Under the agreement, Fisher may not establish, own, operate, control or manage “any corporation, limited liability company, or any other entity that engages in the business of providing trust administration services, including any professional services for special needs trusts.”
If the judgment were to be reinstated, it would not be subject to bankruptcy protection.
The judgment requires Fisher to “preserve and retain any relevant business and financial records” relating to The Directed Benefits case for five years, and to provide “reasonable access” to any relevant documents to the Attorney General’s Office.
The judgment also requires Fisher to notify the Attorney General’s office at least 30 days prior “to creating, operating, or exercising any control over any business entity or organization in Florida, whether newly formed or previously inactive.”
The judgment also unfreezes Fishers assets.
She must also be removed as a signatory from all Directed Benefits accounts.
The original lawsuit filed by Moody’s Office 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 lawsuit, which is ongoing, came after News Channel 8 investigated lost money in March.
