Consumer Financial Protection Bureau and Maria T. Vullo, Superintendent of Financial Services of the State of New York, Plaintiffs, v. Pension Funding, LLC; Pension Income, LLC; Steven Covey; Edwin Lichtig; and Rex Hofelter, Defendants

Case Summary:

On January 8, 2016, Krista Freitag was appointed as receiver of PENSION FUNDING, LLC and PENSION INCOME, LLC, their affiliates, subsidiaries and successors in interest (including but not limited to PGR, LLC), pursuant to an Order entered by the United States District Court for the Central District of California, Southern Division in an action filed by the Consumer Financial Protection Bureau (the “Bureau”) and the State of New York.

Case Updates:

 

On August 20, 2015, the Consumer Financial Protection Bureau and Maria T. Vullo, Superintendent of Financial Services of the State of New York, filed a civil lawsuit in United States District Court against Defendants Pension Funding, LLC; Pension Income, LLC; Steven Covey; Edwin Lichtig; and Rex Hofelter. On January 8, 2016, the District Court appointed Krista Freitag as receiver for Pension Funding, LLC, Pension Income, LLC, and their subsidiaries, affiliates, and successors in interest, including PGR, LLC.

 

Please send all inquiries and correspondence to:

 

pf-pi@ethreeadvisors.com
619-512-2598

Frequently Asked Questions (Updated 06/01/2017):

 

When will investors receive their money back and how much will they get?

 

The Receiver completed her forensic accounting of funds received and disbursed by the receivership entities. The Court also approved the Receiver’s recommendation regarding the collection of amounts due from pensioners and the process for determining the proper amount of investor claims. The Court has ordered Pensioners to pay back the lump-sums received and ordered the Receiver to complete the investor claims process. The Receiver sent out correspondence to all Pensioners and Investors reflecting the Court’s order details, and sent all Investors their Claim Notices with specific instructions and a February 26, 2017 response deadline (see FAQ below).

 

A copy of the Court’s order can be found below – the “Order Approving in Part the Receiver’s Report and Recommendations”.

 

With the claims process completed, the Receiver filed a proposed distribution plan with the Court and requested permission to make interim distributions to Investors. The Court has now approved the Receiver’s proposed distribution plan and the Receiver is preparing to make such approved interim distributions in early June 2017. Please refer to the Exhibits (particularly Exhibit B) of the “Declaration of Krista L. Freitag, Court-Appointed Receiver, in Support of Motion for (A) Approval of Proposed Allowed Claim Amounts; (B) Approval of Distribution Plan; and (C) Authority to Make Interim Distributions” posted below.

 

A copy of the Court’s order approving the distribution plan can also be found below – the “(In Chambers) Order Granting Motion for (1) Approval of Proposed Allowed Claim Amounts, (2) Approval of Distribution Plan, and (3) Authority to Make Interim Distributions (Doc. 139).”

 

Are pensioners required to make payments they owe to the receivership entities?

 

Yes. As mentioned above, the Court ordered Pensioners to pay back lump sums they received. As such, Receiver will continue to collect payments pensioners owe the receivership entities. Pensioners who fail to pay will be subject to collection actions.

 

What is the deadline for Investors to respond to the Claims Notices?

 

In late December 2016, all Investors were sent a copy of his/her Claims Notice via USPS certified/return receipt by the Receiver. The February 26, 2017 deadline has passed and the Court has ordered any/all claims submitted on or after March 1, 2017 as barred.

 

 

Document Links (PDF Format):

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Court Filings: