SEC v. Pacific West Capital Group, Inc., et al

Case Summary:

On February 16, 2018, Thomas C. Hebrank of E3 Advisors was appointed permanent receiver for PWCG Trust (“Defendant”), pursuant to an Order entered by the United States District Court for the Central District of California in an action against Defendant filed by the Securities and Exchange Commission.

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Who is the Receiver? Why was there a Receiver appointed? Thomas C. Hebrank was appointed by the Federal District Court on February 16, 2018. The Receiver was appointed after a complaint was filed by the Securities and Exchange Commission against Pacific West Capital Group, Inc.; Andrew B. Calhoun IV; PWCG Trust, et al. (“PWCG”). Your life insurance investment interest was created by PWCG, and is one of the subjects of the ongoing litigation between the SEC and PWCG.


Who can I talk to about my investment? You can periodically visit the Receiver’s website for additional updates as far as the case, Receiver’s Reports and other legal filings ( The Receiver and his staff are happy to take your questions, however to keep expenses low we ask that you check the FAQ or website first. Please direct inquiries to the Receiver to


What are the next steps in the receivership? Mills, Potoczak & Company will continue to maintain the accounting and operations relating to these life insurance investments, under the supervision of the Receiver. The funds are now under the direct control of the Receiver. The Receiver is in the process of gathering information regarding these policies, the investor interests, and overall operations. Many, but not all, of these policies have established premium reserves, which are in place to cover or partially cover premium costs on the policies. However, many of these insurance policy investments do not have sufficient funds set aside to make these premiums payments.


Do I still need to make premium call, administrative fee or other payments? The Receiver has currently suspended the collection of both investor premium calls and shortfall payments, as well as the $200 or other administrative fees. These would have been billed to you by Mills Potoczak. No prior premium or administrative fees will be refunded. Some investors have their investments in an IRA with Entrust Group. Entrust Group is not part of the receivership and we have no control or authority over any administrative fees billed to investors by them.


What are the initial steps being taken regarding premium shortfalls? The Receiver, working with Mills Potoczak, immediately identified insufficient premium reserves for policies with payment due dates starting on March 9, 2018 through May 31. 2018. A reserve shortfall of $435,000 exists for this time period, effecting policies with total death benefits over $117 million. If these premium payments are not made, these policies would lapse, and the investments would be lost. Accordingly, the Receiver filed an ex parte motion on March 1, 2018, asking the District Court for authorization to use the existing reserves on hand at PWCG Trust to fund deficiencies for premium payments that are due during March, April, and May 2018, in order to prevent any policies from lapsing. The Court granted that motion on the following day. A link to the filing as well as the Court’s order can be found below. During this 90 day time period, the Receiver intends to perform additional analysis on the policies and reserves in order to recommend a long term plan for the PWCG Trust portfolio to the Court.


During this review period, the Receiver found that proper due diligence was not done in acquiring the policies in the PWCG Trust portfolio, and that a valuation process would need to be completed to properly determine the value and viability of the policies. The majority of the policies had either exhausted, or were about to exhaust their existing reserves. A long-term strategy was needed for maximizing the value of the policy portfolio, and this would require obtaining proper life expectancy reports for the insureds and other valuation information. Accordingly, the Receiver obtained quotes from several life settlement companies, as well as the current trustee Mills Potoczak & Company, to both manage the portfolio and provide valuation services.


Based on the quotes received, on May 2, 2018, the Receiver filed a motion with the Court to 1) engage a portfolio and valuation consultant, 2) terminate Mills Potoczak, and 3) use PWCG Trust reserve funds to cover unfunded premium payments through October 2018. This motion is currently before the Court and is scheduled to be heard on May 31, 2018.


Initial Investor Notification Letter


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