EHRENSTEIN CHARBONNEAU CALDERIN 501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION www.flsb.uscourts.gov

In re:

CLSF III IV, INC.,

Alleged Debtor. /

PETER H.M.A. ORTMANS, MILDRED A.H. ORTMANS, MARC VANDOORNE, AND MAATSCHAP QI COLLECTIEF a Belgium partnership,

Plaintiffs,

v.

BEHL CORPORATION, a Florida corporation, BGI 3 LIFE INC., a Florida corporation, BGI 5 LIFE INC., a Florida corporation, BGI 6 LIFE INC., a Florida corporation, BGI I LIFE INC., a Florida corporation, BGI II LIFE INC., a Florida corporation, BGI IX CORP., a Florida corporation, BGI VII CORP., a Florida corporation, BGI VIII CORPORATION., a Florida corporation, BGI X CORP., a Florida corporation, BGI XI CORP., a Florida corporation, BGI XII CORP., a Florida corporation, BGI XIV CORP., a Florida corporation, BGI XIX CORPORATION, a Florida corporation, BGI XV CORP., a Florida corporation, BGI XVI CORP., a Florida corporation, BGI XVII CORP., a Florida corporation, BGI XVIII CORP., a Florida corporation, BGI XVIX CORP., a Florida corporation, BGI XX CORP., a Florida corporation, BGI XXI, CORP., a Florida corporation, BGI XXII, CORP., a Florida corporation, BGI XXIV CORPORATION, a Florida corporation, BGI XXV CORPORATION, a Florida corporation, BGI XXVI

CASE NO.: 12-30081-BKC-EPK

Chapter 7

Case 12-01889-EPK Doc 1 Filed 09/07/12 Page 1 of 373

2 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

CORPORATION, a Florida corporation, CLSF 1A CORPORATION, a Florida corporation, CLSF 3-4 A CORPORATION, a Florida corporation, CLSF 3-4 CORPORATION, a Florida corporation, CLSF 7 A CORPORATION, a Florida corporation, CLSF I INC., a Florida corporation, CLSF III IV INC., a Florida corporation, CLSF IX INC., a Florida corporation, CLSF VII INC., a Florida corporation, CLSF VIII INC., a Florida corporation, CLSF XII INC., a Florida corporation, CLSF XIV INC., a Florida corporation, CLSF XL INC., a Florida corporation, CLSF XLI INC., a Florida corporation, CLSF XLII INC., a Florida corporation, CLSF XLIII, INC., a Florida corporation, CLSF XV INC., a Florida corporation, CLSF XVI INC., a Florida corporation, CLSF XVII INC., a Florida corporation, CLSF XVIII INC., a Florida corporation, CLSF XX INC., a Florida corporation, CLSF XXI INC., a Florida corporation, CLSF XXII INC., a Florida corporation, CLSF XXIII INC., a Florida corporation, CLSF XXIX INC., a Florida corporation, CLSF XXV INC., a Florida corporation, CLSF XXX INC., a Florida corporation, CLSF XXXI INC., a Florida corporation, CLSF XXXII INC., a Florida corporation, CLSF XXXIV INC., a Florida corporation, CLSF XXXIX INC., a Florida corporation, CLSF XXXV INC., a Florida corporation, CLSF XXXVI INC., a Florida corporation, CLSF XXXVIII INC., a Florida corporation, CLSF XXXXII CORPORATION, a Florida corporation, CLSF XXXXIII CORPORATION, a Florida corporation, CLSF XXXXIV, a Florida corporation, CLSF XXXXV CORPORATION, a Florida corporation, CLSF XXXXVI CORPORATION, a Florida corporation, LSF I INC., a Florida corporation, LSF II INC., a Florida corporation, LSF III INC., a Florida

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3 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

corporation, LSF IV INC., a Florida corporation, LSF V INC., a Florida corporation, LSF VI INC., a Florida corporation, MP XXVI INC., a Florida corporation, RPM LIFE INC., a Florida corporation, RYAN TRUST CORPORATION, a Florida corporation, THE SINDER TR CORP. a Florida corporation, THE LUNDVALL TR CORP., a Florida corporation, THE GLUCK TR CORP., a Florida corporation, THE LIP CORPORATION, a Florida corporation, THE LIP II TRUST CORPORATION, a Florida corporation, THE MARTHA ELLIOTT INSURANCE TRUST CORPORATION, a Florida corporation, Deborah Peck, Individually, and in Her Capacity as Trustee, and Peck Associates Palm Beach, LLC d/b/a Deborah C. Peck, P.A., Wells Fargo Bank, N.A. and TD Bank, N.A.

Defendants. /

ADVERSARY COMPLAINT FOR: (I) TEMPORARY RESTRAINING ORDER; (II) PRELIMINARY AND PERMANENT INJUNCTION; (III) IMPOSITION OF A CONSTRUCTIVE/RESULTING TRUST; (IV) FOR DECLARATORY RELIEF

ESTABLISHING AN ALTER EGO RELATIONSHIP BETWEEN DEFENDANTS/VEIL PIERCING; AND (V) TURNOVER

Plaintiffs, PETER H.M.A. ORTMANS, MILDRED A.H. ORTMANS, MARC

VANDOORNE, and MAATSCHAP QI COLLECTIEF a Belgium partnership, (collectively

“Petitioning Creditors” or “Plaintiffs”), by and through their undersigned counsel, file this

adversary proceeding (the “Complaint”) against the CLSF III IV, INC., a Florida corporation

(the “Alleged Debtor”), and BEHL CORPORATION, a Florida corporation, BGI 3 LIFE INC., a

Florida corporation, BGI 5 LIFE INC., a Florida corporation, BGI 6 LIFE INC., a Florida

corporation, BGI I LIFE INC., a Florida corporation, BGI II LIFE INC., a Florida corporation,

BGI IX CORP., a Florida corporation, BGI VII CORP., a Florida corporation, BGI VIII

CORPORATION, a Florida corporation, BGI X CORP., a Florida corporation, BGI XI CORP., a

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4 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

Florida corporation, BGI XII CORP., a Florida corporation, BGI XIV CORP., a Florida

corporation, BGI XIX CORPORATION, a Florida corporation, BGI XV CORP., a Florida

corporation, BGI XVI CORP., a Florida corporation, BGI XVII CORP., a Florida corporation,

BGI XVIII CORP., a Florida corporation, BGI XVIX CORP., a Florida corporation, BGI XX

CORP., a Florida corporation, BGI XXI, CORP., a Florida corporation, BGI XXII, CORP., a

Florida corporation, BGI XXIV CORPORATION, a Florida corporation, BGI XXV

CORPORATION, a Florida corporation, BGI XXVI CORPORATION, a Florida corporation,

CLSF 1A CORPORATION, a Florida corporation, CLSF 3-4 A CORPORATION, a Florida

corporation, CLSF 3-4 CORPORATION, a Florida corporation, CLSF 7 A CORPORATION, a

Florida corporation, CLSF I INC., a Florida corporation, CLSF IX INC., a Florida corporation,

CLSF VII INC., a Florida corporation, CLSF VIII INC., a Florida corporation, CLSF XII INC., a

Florida corporation, CLSF XIV INC., a Florida corporation, CLSF XL INC., a Florida

corporation, CLSF XLI INC., a Florida corporation, CLSF XLII INC., a Florida corporation,

CLSF XLIII, INC., a Florida corporation, CLSF XV INC., a Florida corporation, CLSF XVI

INC., a Florida corporation, CLSF XVII INC., a Florida corporation, CLSF XVIII INC., a

Florida corporation, CLSF XX INC., a Florida corporation, CLSF XXI INC., a Florida

corporation, CLSF XXII INC., a Florida corporation, CLSF XXIII INC., a Florida corporation,

CLSF XXIX INC., a Florida corporation, CLSF XXV INC., a Florida corporation, CLSF XXX

INC., a Florida corporation, CLSF XXXI INC., a Florida corporation, CLSF XXXII INC., a

Florida corporation, CLSF XXXIV INC., a Florida corporation, CLSF XXXIX INC., a Florida

corporation, CLSF XXXV INC., a Florida corporation, CLSF XXXVI INC., a Florida

corporation, CLSF XXXVIII INC., a Florida corporation, CLSF XXXXII CORPORATION, a

Florida corporation, CLSF XXXXIII CORPORATION, a Florida corporation, CLSF XXXXIV.,

Case 12-01889-EPK Doc 1 Filed 09/07/12 Page 4 of 373

5 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

a Florida corporation, CLSF XXXXV CORPORATION, a Florida corporation, CLSF XXXXVI

CORPORATION, a Florida corporation, LSF I INC., a Florida corporation, LSF II INC., a

Florida corporation, LSF III INC., a Florida corporation, LSF IV INC., a Florida corporation,

LSF V INC., a Florida corporation, LSF VI INC., a Florida corporation, MP XXVI INC., a

Florida corporation, RPM LIFE INC., a Florida corporation, RYAN TRUST CORPORATION, a

Florida corporation, THE SINDER TR CORP. a Florida corporation, THE LUNDVALL TR

CORP., a Florida corporation, THE GLUCK TR CORP., a Florida corporation, THE LIP

CORPORATION, a Florida corporation, THE LIP II TRUST CORPORATION, a Florida

corporation, THE MARTHA ELLIOTT INSURANCE TRUST CORPORATION, a Florida

corporation, Deborah C. Peck, individually, and as trustee, officer, and/or registered agent for

any and all of the foregoing entities, and Peck Associates Palm Beach, LLC d/b/a Deborah C.

Peck, P.A. Wells Fargo Bank, N.A. and TD Bank, N.A. (collectively the “Defendants”), pursuant

to 11 U.S.C. §§105, 542 and/or 543, Rule 65 of the Federal Rules of Civil Procedure, as made

applicable by the Federal Rules of Bankruptcy Procedure (“FRBP”), Chapter 86, Florida

Statutes, and its federal analogue 28 U.S.C. § 2201, and Florida common law, and alleges:

Procedural History

1. On August 23, 2012, an involuntary petition requesting an order for relief under

chapter 7 of the Bankruptcy Code [ECF# 1] was brought against the Alleged Debtor to unwind a

massive financial fraud that spanned, and continues to span, the globe with operations in the

United States, Europe, and the Middle East among other locales (the “Quality Investments

Offering”). Operating dozens of domestic and foreign business entities, the perpetrators of this

fraud used false and misleading statements to raise more than $223 million from international

investors through the offer and sale of life settlements.

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6 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

2. The Quality Investments Offering included three structures or life settlement

options for investors, known as the CLSF funds, the BGI funds, and the LSF funds, respectively.

The primary distinction among the three structures or life settlement options was a variation in

the timing and amount of the promised investment return. All of the funds were marketed and

“managed” through a single Dutch entity – Quality Investments, BV (“QI”).

Jurisdiction and Venue

3. This is a core proceeding pursuant to 28 U.S.C. §157(b)(2) (A), (E), and (O), and

an adversary proceeding pursuant to FRBP 7001 et seq.

4. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C.

§§157(b)(2) and 1334.

5. Venue is proper pursuant to 28 U.S.C. §1409 and other applicable law.

Parties

6. BEHL CORPORATION, is a Florida corporation authorized to do business in

Florida.

7. BGI 3 LIFE INC., is a Florida corporation authorized to do business in Florida.

8. BGI 5 LIFE INC., is a Florida corporation authorized to do business in Florida.

9. BGI 6 LIFE INC., is a Florida corporation authorized to do business in Florida.

10. BGI I LIFE INC., is a Florida corporation authorized to do business in Florida.

11. BGI II LIFE INC., is a Florida corporation authorized to do business in Florida.

12. BGI IX CORP., is a Florida corporation authorized to do business in Florida.

13. BGI VII CORP., is a Florida corporation authorized to do business in Florida.

14. BGI VIII CORPORATION., is a Florida corporation authorized to do business in

Florida.

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501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

15. BGI X CORP., is a Florida corporation authorized to do business in Florida.

16. BGI XI CORP., is a Florida corporation authorized to do business in Florida.

17. BGI XII CORP., is a Florida corporation authorized to do business in Florida.

18. BGI XIV CORP., is a Florida corporation authorized to do business in Florida.

19. BGI XIX CORPORATION, is a Florida corporation authorized to do business in

Florida.

20. BGI XV CORP., is a Florida corporation authorized to do business in Florida.

21. BGI XVI CORP., is a Florida corporation authorized to do business in Florida.

22. BGI XVII CORP., is a Florida corporation authorized to do business in Florida.

23. BGI XVIII CORP., is a Florida corporation authorized to do business in Florida.

24. BGI XVIX CORP., is a Florida corporation authorized to do business in Florida.

25. BGI XX CORP., is a Florida corporation authorized to do business in Florida.

26. BGI XXI, CORP., is a Florida corporation authorized to do business in Florida.

27. BGI XXII, CORP., is a Florida corporation authorized to do business in Florida.

28. BGI XXIV CORPORATION., is a Florida corporation authorized to do business

in Florida.

29. BGI XXV CORPORATION., is a Florida corporation authorized to do business

in Florida.

30. BGI XXVI CORPORATION., is a Florida corporation authorized to do business

in Florida (when the foregoing defendants identified in Paragraphs 6 through 30 are referred to

collectively, the “BGI Funds”).

31. CLSF III IV, INC., is a Florida corporation authorized to do business in Florida,

and is the Alleged Debtor in the main bankruptcy proceeding.

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32. CLSF 1A CORPORATION., is a Florida corporation authorized to do business in

Florida.

33. CLSF 3-4 A CORPORATION., is a Florida corporation authorized to do business

in Florida.

34. CLSF 3-4 CORPORATION., is a Florida corporation authorized to do business in

Florida.

35. CLSF 7 A CORPORATION., is a Florida corporation authorized to do business in

Florida.

36. CLSF I INC., is a Florida corporation authorized to do business in Florida.

37. CLSF IX INC., is a Florida corporation authorized to do business in Florida.

38. CLSF VII INC., is a Florida corporation authorized to do business in Florida.

39. CLSF VIII INC., is a Florida corporation authorized to do business in Florida.

40. CLSF XII INC., is a Florida corporation authorized to do business in Florida.

41. CLSF XIV INC., is a Florida corporation authorized to do business in Florida.

42. CLSF XL INC., is a Florida corporation authorized to do business in Florida.

43. CLSF XLI INC., is a Florida corporation authorized to do business in Florida.

44. CLSF XLII INC., is a Florida corporation authorized to do business in Florida.

45. CLSF XLIII, INC., is a Florida corporation authorized to do business in Florida.

46. CLSF XV INC., is a Florida corporation authorized to do business in Florida.

47. CLSF XVI INC., is a Florida corporation authorized to do business in Florida.

48. CLSF XVII INC., is a Florida corporation authorized to do business in Florida.

49. CLSF XVIII INC., is a Florida corporation authorized to do business in Florida.

50. CLSF XX INC., is a Florida corporation authorized to do business in Florida.

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9 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

51. CLSF XXI INC., is a Florida corporation authorized to do business in Florida.

52. CLSF XXII INC., is a Florida corporation authorized to do business in Florida.

53. CLSF XXIII INC., is a Florida corporation authorized to do business in Florida.

54. CLSF XXIX INC., is a Florida corporation authorized to do business in Florida.

55. CLSF XXV INC., is a Florida corporation authorized to do business in Florida.

56. CLSF XXX INC., is a Florida corporation authorized to do business in Florida.

57. CLSF XXXI INC., is a Florida corporation authorized to do business in Florida.

58. CLSF XXXII INC., is a Florida corporation authorized to do business in Florida.

59. CLSF XXXIV INC., is a Florida corporation authorized to do business in Florida.

60. CLSF XXXIX INC., is a Florida corporation authorized to do business in Florida.

61. CLSF XXXV INC., is a Florida corporation authorized to do business in Florida.

62. CLSF XXXVI INC., is a Florida corporation authorized to do business in Florida.

63. CLSF XXXVIII INC., is a Florida corporation authorized to do business in

Florida.

64. CLSF XXXXII CORPORATION., is a Florida corporation authorized to do

business in Florida.

65. CLSF XXXXIII CORPORATION., is a Florida corporation authorized to do

business in Florida.

66. CLSF XXXXIV., is a Florida corporation authorized to do business in Florida.

67. CLSF XXXXV CORPORATION., is a Florida corporation authorized to do

business in Florida.

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10 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

68. CLSF XXXXVI CORPORATION., is a Florida corporation authorized to do

business in Florida (when the foregoing defendants named in Paragraphs 31 through 69 are

referred to together, the “CLSF Funds”).

69. LSF I INC., is a Florida corporation authorized to do business in Florida.

70. LSF II INC., is a Florida corporation authorized to do business in Florida.

71. LSF III INC., is a Florida corporation authorized to do business in Florida.

72. LSF IV INC., is a Florida corporation authorized to do business in Florida.

73. LSF V INC., is a Florida corporation authorized to do business in Florida.

74. LSF VI INC., is a Florida corporation authorized to do business in Florida (when

the foregoing defendants named in Paragraphs 69 through 75 are referred to together, the “LSF

Funds”).

75. MP XXVI INC., a Florida corporation authorized to do business in Florida.

76. RPM LIFE INC., a Florida corporation authorized to do business in Florida.

77. RYAN TRUST CORPORATION, a Florida corporation authorized to do business

in Florida.

78. THE SINDER TR CORP. a Florida corporation authorized to do business in

Florida.

79. THE LUNDVALL TR CORP., a Florida corporation authorized to do business in

Florida.

80. THE GLUCK TR CORP., a Florida corporation authorized to do business in

Florida.

81. THE LIP CORPORATION, a Florida corporation authorized to do business in

Florida.

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11 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

82. THE LIP II TRUST CORPORATION, a Florida corporation authorized to do

business in Florida.

83. THE MARTHA ELLIOTT INSURANCE TRUST CORPORATION, a Florida

corporation authorized to do business in Florida (the foregoing entities identified in Paragraph 75

through 83 are the “Additional Peck Trusts”).

84. Deborah Peck (“Peck”) is an individual residing in Palm Beach County, Florida.

Peck is sole trustee of a number of trusts that purport to hold all equity interests in each and

every named defendant entity to this Adversary Proceeding, other than Wells Fargo Bank, N.A.

and TD Bank.

85. Peck Associates Palm Beach, LLC d/b/a Deborah C. Peck, P.A. is a Florida

limited liability corporation authorized to do business in Florida, but Peck, in her individual

capacity, is not authorized to practice law in Florid.

86. Wells Fargo Bank, N.A. (“Wells Fargo”) is a national banking association

authorized to do business in, inter alia, the State of Florida, and is a depository institution

utilized by Peck, the BGI Funds, the CLSF Funds and the LSI Funds.

87. TD Bank, N.A. (“TD Bank”) is a foreign national banking association authorized

to do business in, inter alia, the State of Florida, and either was, or continues to be, a depository

institution utilized by Peck, the BGI Funds, the CLSF Funds, the LSF Funds, and the Additional

Peck Trusts.

88. Plaintiff Peter H.M.A. Ortmans, is an individual residing in Maasmechelen,

Belgium who invested $240,000 in CLSF III/IV Fund and is owed $400,000 by the Alleged

Debtor.

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12 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

89. Plaintiff Mildred A.H. Ortmans, is an individual residing in Lanaken, Belgium

who invested $240,000 in CLSF III/IV Fund and is owed $400,000 by the Alleged Debtor.

90. Plaintiff Marc Vandoorne, is an individual residing in Pittem, Belgium who

invested $120,000 in CLSF III/IV Fund and is owed $200,000 by the Alleged Debtor.

91. Plaintiff Maatschap QI Collectief is a Belgian partnership, representing more than

700 investors with collective claims as of August 14, 2012 against the CLSF Funds totaling

$92.8 million, and whose members hold claims against the Alleged Debtor (when the parties

named in paragraphs 88 through 91 are referred to together, “Plaintiffs” or “Petitioning

Creditors”).

General Background of the Fraud.

92. A life settlement is an investment contract in which an insurance policy owner

sells his or her life insurance policy to a third party for an amount that exceeds the policy’s cash

surrender value, but is less than the expected death benefit of the policy.

93. Since the proliferation of life settlement offerings (initially known as viatical

settlements)1 in the 1990s, the offer and sale of insurance policies to retail investors has been

marked by extensive fraud. See, Life Settlement Task Force, Staff Report to the United States

Securities and Exchange Commission, (July 22, 2010). Regulatory actions and criminal

prosecutions were common in the late 1990s and early 2000s, culminating in the 2004 SEC

enforcement action against Mutual Benefits Corp. See, SEC v. Mutual Benefits Corp.,

323 F.Supp.2d 1337 (S.D. Fla. 2004).

                                                            1 The only distinction between life settlements and viatical settlements is that in a life settlement, the insured is not terminally or chronically ill. Courts generally do not distinguish between viatical and life settlements. See, SEC v. Mutual Benefits Corp., 323 F.Supp.2d. 1337, n.2 (S.D. Fla. 2004).

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13 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

94. Following the landmark Eleventh Circuit Court of Appeals opinion in Mutual

Benefits Corp., which was published in May 2005, the domestic life settlement industry

splintered under enhanced regulatory scrutiny. Many unscrupulous life settlement providers

moved their investment offerings offshore, targeting unsuspecting international victims in less

regulated transactions.

95. It was in this context that Peck, Dennis Moens (“Moens”), and Frank Laan

(“Laan”) organized the Quality Investments Offering, employing a network of Florida entities

and international shell corporations to target victim-investors in Belgium, the Netherlands, and

elsewhere.

96. The Alleged Debtor is one of dozens of Florida entities that served as an engine of

a $223 million fraud through the actions, omissions, and breaches of fiduciary duty committed

by, among others, its incorporator, sole officer, and registered agent, Peck.

97. Hundreds of foreign individuals and corporations invested in dozens of

inextricably intertwined life settlement offerings, leaving the investors with unsecured claims

against the respective Florida entities organized by Peck, including the Alleged Debtor.

98. In each of these offerings, Peck acted as trustee for the benefit of the investors,

charged with acquiring and maintaining the life insurance policies that were intended to be the

source of funds from which the investors would receive their distributions. As part of her duties,

Peck was entrusted with millions of dollars to be held in trust for the payment of anticipated

premium obligations. Unfortunately, and despite over $223,880,000.00 in total funds invested in

the life settlements, the perpetrators of this fraudulent scheme used at most approximately

$50,000,000 of investor funds to purchase insurance policies, and those policies are in danger of

lapsing because of the waste, breaches of duty, and defalcation of Peck and others.

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14 EHRENSTEIN CHARBONNEAU CALDERIN 

501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

99. To the extent that investor funds were actually used to purchase insurance

policies, those funds were funneled through an undisclosed related party, Watershed, LLC

(“Watershed”), an entity which is owned and operated by Moens. Further, funds that were

entrusted to Peck’s trust accounts were not safeguarded and were misappropriated by the

principals of this fraud.

Background Allegations regarding the Closed Life Settlement Funds (CLSF Defendants)

100. The CLSF Funds were a series of inextricably intertwined life settlement

offerings that, upon information and belief, promised identical investment returns to their

investors on substantially similar terms (i.e. that, upon maturity, each investor would realize a

lump sum payment comprised of a 15% annualized return plus the return of the invested capital).

For example, with respect to the Alleged Debtor, the Petitioning Creditors were promised a

payment of $400,000 on each $240,000 investment to be paid on or before a date certain (the

“Maturity Date”).

101. Each of the Closed Life Settlement Fund offerings was given a “CLSF”

designation and was assigned an identifying roman numeral or alpha-numeric designation.

102. Upon information and belief, investors in each of the CLSF Funds were induced

to invest through a prospectus. For example, the prospectus used to induce the Petitioning

Creditors’ participation in the CLSF Trust III/IV Stichting Closed Life Settlement Fund UA dtd

07/09/2007 (the “CLSF Trust III/IV”) is attached hereto as Exhibit A (the “CLSF Trust III/IV

Prospectus”). The summary section of the CLSF Trust III/IV Prospectus provides: “[t]he CLSF

Trust III/IV is the owner of an American Life Settlement, concluded on the life of one American

insured person, with an insured amount of $10,000,000.00.” See Ex. A, p.5.

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15 EHRENSTEIN CHARBONNEAU CALDERIN 

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103. The “American Life Settlement” to which the CLSF Trust III/IV Prospectus refers

is the purchased life insurance policy referenced in the “Contract for Sale and Purchase of Life

Settlement” between Watershed and CLSF Trust III/IV.

104. Upon information and belief, Watershed purchased life insurance policies from

various insureds and conveyed one or more such policies to each and every one of the CLSF

Funds.

105. The CLSF Trust III/IV Prospectus also provides:

CLSF Trust III/IV has concluded a Reinsurance. Should the Life Settlement not release payment before 1 July 2011, the Reinsurance will, at the latest on 1 October 2011, pay $10,000,000.00 to CLSF Trust III/IV after which the Participants will be paid immediately. To put it briefly, each and every participant is guaranteed to, per Participation of $240,000.00, receive $400,000.00 at the latest on 1 October 2011.

(Emphasis and bold added). Accordingly, the CLSF Trust III/IV Prospectus guaranteed a

$400,000 return for each $240,000 investment because “Reinsurance” referred to in that

prospectus would provide the funds for investor payouts if the life insurance policy had not yet

matured (and thus also avoid further premium indebtedness).

106. However, as of October 1, 2011, the investors in the CLSF Funds, including

Petitioning Creditors, have not been paid their guaranteed returns.

107. The “Reinsurance” that purportedly insured the timely payment of investors’

guaranteed return and repayment of their invested capital were bonds whose maturity dates post-

dated the expected maturity date for each life insurance policy (the “Maturity Bonds”). When the

perpetrators of the Quality Investments offering were soliciting investments into the CLSF

Funds, the Maturity Bonds were billed as a critical component of these life settlement offerings.

Without the Maturity Bonds, the life settlements are highly speculative, illiquid and open-ended

because the investment’s maturity date and return are dependent on the insured’s death.

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108. Although the identity of the maturity “reinsurer” was not disclosed to investors,

the CLSF Funds, including the Alleged Debtor, purchased Maturity Bonds from Provident

Capital Indemnity, Ltd. (“PCI”), a reinsurance company organized and incorporated in Costa

Rica.

109. The principals of the Quality Investments Offering claimed that the Maturity

Bonds offered a “guaranteed” maturity date for the investments because they obligated the

reinsurer to pay investors, or a fiduciary acting for the benefit of the investors, the face value of

the underlying insurance policy, if the insured lived past his or her predicted life expectancy

date.

110. Each of the victims of the Quality Investments Offering fraud are also victims of

an apparently independently operated fraud perpetrated by PCI’s principals, which was the

subject of a recent SEC action and related criminal proceedings in the Eastern District of

Virginia. In that proceeding, PCI was exposed as a fraud.2 The SEC action and related

prosecutions revealed that PCI was insolvent and that its Maturity Bonds failed to provide any

real reinsurance coverage for the life settlements offered and sold in the Quality Investments

Offering. PCI’s President, Minor Vargas Calvo, is now in a federal prison for his role in the PCI

fraud.

111. Although the PCI fraud appears to have been independently operated, the

principals of the QI offering knew that PCI was not solvent and the Maturity Bonds sold by PCI

did not provide the security promised to QI’s investors. For example, in or around late 2010,

PCI failed to fund a Maturity Bond due on a policy that had exceeded the predicted life

                                                            2 The SEC action is styled Securities and Exchange Commission v. Provident Capital Indemnity, Ltd., Minor Vargas Calvo, and Jorge L. Castillo, Case No. 3:11-cv-00045-JG in the United States District Court, Eastern District of Virginia (Richmond Division). 

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expectancy of the insured individual. To conceal PCI’s inability to perform as promised, on or

about January 12, 2011, Moens and Peck used funds collected from new QI investors to pay the

high returns promised to earlier QI investors. Through the payments of fictitious profits, Moens

and Peck perpetuated the false and misleading appearance that QI was a successful business.

The use of funds contributed by new QI investors to pay fictitious returns to other QI investors

carried all of the classic badges of a Ponzi scheme, and clearly demonstrated the fraudulent intent

of QI’s principals in the conduct of this investment offering.

112. In the “General Information” section, the CLSF Trust III/IV Prospectus explains

that CLSF has established “a Trust in America, named the CLSF Trust III/IV/Foundation Closed

Life Settlement Fund III/IV UA DTD July 9, 2007,”3 which has “the exclusive objective to act as

custodian of the policy for the benefit of CLSF.” See Ex. A, p. 5. The CLSF Trust III/IV

Prospectus goes on to identify that Peck, whose address is given as 631 U.S. Highway 1, Suite

303, North Palm Beach, Florida 33408, is acting as manager and custodian of the CLSF Trust

III/IV in America.

113. The prospectus for the CLSF Funds indicated that each “American Life

Settlement” would be placed into a trust for the benefit of investors, with Peck, again, at 631

U.S. Highway 1, Suite 303, North Palm Beach, Florida 33408, acting as manager and custodian

for the insurance polic(ies).

114. Peck incorporated the Alleged Debtor on May 29, 2009. Although the Alleged

Debtor does not bear the identical name to that “Trust in America” referred to in the CLSF Trust

III/IV Prospectus, documents evidencing the transfer and ownership of the underlying life

insurance policy and emails from Peck to investors reveal that the investors in CLSF Fund III/IV,

                                                            3 The CLSF Trust III/IV was actually incorporated by Peck as CLSF III IV, Inc. – the Alleged Debtor. 

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including Petitioning Creditors, had an expectation that their investments would be funded by a

life insurance policy that is owned by the Alleged Debtor.

115. Beginning in or around 2009, Peck and others incorporated the numerous other

entities in connection with the various other CLSF Funds, each named herein as defendants.

116. The CLSF Trust III/IV Prospectus also provides that CLSF Fund III/IV is the

owner of the life settlement by having purchased the beneficial rights to policy proceeds from an

insured of an American insurance company, that the Maturity Bonds had been fully purchased

and fully paid for, and that participants in the CLSF Fund will acquire their share in the future

payment of the life settlement by payment of their participation to Peck’s trust account. Ex. A,

p. 6.

117. The CLSF Trust III/IV Prospectus provides that “[t]he American Lawyer/Trustee

verified whether the policy of Life Settlement is real,” whether the relevant insurance company

acknowledges that CLSF Trust III/IV is the owner and beneficiary of the policy/life settlement,

and whether the policy premiums were current at the time of purchase from the insured. Id. at

p. 6.

118. Koen Blom (“Blom”) was an attorney with HRM Advocaten, a law firm in

Amsterdam. Blom provided the “Comfort Letter” that is attached to the CLSF Trust III/IV

Prospectus. The “Comfort Letter,” dated September 18, 2007, which appears on page 13 of the

CLSF Trust III/IV Prospectus, represents that Blom established that the Maturity Bond insurer

has “again reinsured 80% of its obligation on account of the 2nd policy [the Maturity Bond] at

companies who are all appreciated with an “A” or higher rating by AMBEST and STANDARD

AND POORS.”

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119. The Maturity Bond insurer, PCI, however, did not reinsure its obligations on any

insurance policies with “A” rated companies. PCI did not reinsure its obligations at all, and any

investor funds that were used to pay PCI’s (re)insurance premiums are gone as result of the PCI

fraud.

120. The CLSF Trust III/IV Prospectus also attaches a sample “Purchase Agreement,”

which is identical to that executed by the Petitioning Creditors (the “Participation Agreement”).

The Participation Agreement provides the economic terms of a participant’s investment, which

mirrors the “Summary” section of the CLSF Trust III/IV Prospectus, and also recites the

additional terms of participation, including how much of an investor’s contribution would be

devoted to insurance premiums to maintain the underlying life insurance policy and the Maturity

Bond. From each investment of $240,000, the participant/investor contributed $26,200 toward

life insurance premiums, which total is broken into a first year premium of $13,100 and an equal

“premium buffer” of $13,100. In addition, $24,000 for fully paid premium(s) for Maturity

Bond(s) were deducted from each investment.

121. Investors were instructed to wire their investments to Peck as the “trustee for the

fund,” at TD Bank, N.A., 555 Warren Avenue, Spring Lake Heights, NJ 07762. The TD Bank

account is described in the CLSF Trust III/IV Prospectus as the “Deborah C. Peck Trust

Account,” No.78.59.14,49.46. Id. at p. 20. Accordingly, investor funds, including those of

Petitioning Creditors, were wired exclusively to Peck’s trust account for the purchase and

maintenance of insurance policies.

122. The “Frequently Asked Questions” section of the CLSF Trust III/IV Prospectus

answers the question “What is a Trust” as follows:

. . . A Trust is an agreement between three parties, being the ‘Settlor,’ the ‘Trustee,’ and the ‘Beneficiary.’ The Settlor puts the Life Settlement policy and

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the reinsurance policy in the Trust. Once the policies are received by the Trust, the Settlor can no longer undo this. The Trustee is the official manager of the Trust. Somebody can only be a Trustee if he or she is also independent. If somebody wants to act as Trustee for a specific Trust, the Trustee will need to dispose of a permit. CLSF works with American Lawyers/Trustees. As a Lawyer they are authorized to act as a Trustee and fall, when it comes to verification of their behavior, under the American disciplinary law for lawyers. The beneficiary is the person or persons who will eventually receive the benefits from the Trust. In the case of CLSF this involves the participants in the fund.

Id. at p. 31.

123. Although the wording is somewhat awkward,4 the CLSF Trust III/IV Prospectus

makes clear that Peck is acting as a trustee for the investors -- the beneficiaries of the CLSF

Trust III/IV. Moreover, Peck was held out to be independent and subject to the “American

disciplinary law for lawyers.”

124. The “Frequently Asked Questions” section of the CLSF Trust III/IV Prospectus

states, “[h]ow big is the risk that the reinsurer goes bankrupt?” The CLSF Trust III/IV Prospectus

goes on to state that “Research evidences that the reinsurer is very creditworthy. The reinsurer

has again covered its obligations for 80%-85% at large well-known reinsurance companies like

Zurich, AIG, Hannover, Swiss RE, . . .” Id. at p. 31.

125. Peck and the other perpetrators of the Quality Investments Offering fraud,

however, omitted to disclose, and in fact concealed the identity of PCI as QI’s reinsurer. The

Maturity Bond insurer, PCI, did not cover its obligations at all, much less at such well-known

insurers. Instead of performing real diligence on PCI, the organizers of the CLSF Funds chose

an insurer from Costa Rica, which they knew was not rated by AMBest, Moodys, Standard and

Poors, Forrester Research, or a rating agency that typically reviews and independently grades

insurers.

                                                            4 This may be a function of the translation. 

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126. Finally, when the CLSF Trust III/IV Prospectus asks, “[w]hy would I participate

in CLSF?” it discloses that “[t]here are risks!” These risks include: “[i]f the insurance company

goes bankrupt you will lose your contribution.”

127. The underlying United States life insurance companies are not bankrupt. The

Maturity Bond reinsurer, however, is bankrupt, which the CLSF Trust III/IV Prospectus

addresses: “[i]f the reinsurer goes bankrupt you will possibly need to wait longer for your

benefit.” Id. at p. 32. But, in an attempt to assuage these risk disclosures, the CLSF Trust III/IV

Prospectus reassures investors that “[t]he benefit is paid from America and directly to the

participant. No additional costs. Complete openness of affairs.” Id. Accordingly, investors

expected to be paid from an American trust account, administered by Peck, upon the maturity of

the underlying life insurance policy or from the proceeds of Maturity Bonds.

128. Neither the life insurance policies nor the Maturity Bonds have provided a source

for investor payments, and the maturity date provided in the CLSF Trust III/IV Prospectus has

passed. Accordingly, Petitioning Creditors “guaranteed” investment looks ever more doubtful.

129. The Alleged Debtor was not established in accordance with investor expectations

as set forth in the CLSF Prospectus. On July 9, 2007, The CLSF Trust III/IV was established

with Watershed as the settlor and Peck as the trustee (the “Trust Agreement”). The Trust

Agreement is attached hereto as Ex. B.

130. The Trust Agreement attaches as Exhibit I thereto a schedule of the life insurance

policy owned by the CLSF Trust III/IV (the “Policy”), which policy number corresponds with

the redactions that appear in the CLSF Prospectus.5 The face value of the Policy is $10,000,000,

                                                            5 The name of the insured and the policy number on Exhibit I to the Trust Agreement and in the Trust Agreement itself have been redacted to preserve the confidentiality of the insured. The unredacted versions of these documents will be made available to the Court in camera.

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and the CLSF Trust III/IV paid Watershed $6,000,000 for the Policy. The Policy was purchased

from Watershed by The CLSF Trust III/IV through an agreement dated July 1, 2007

(the “Purchase Agreement”).6 The purchase Agreement is attached hereto as Ex. C.

131. The $6,000,000.00 purchase price (the “Purchase Price”) is significant because

the premiums for the life insurance policies skyrocket in the first few years after a large life

insurance policy is purchased by an elderly individual. The Purchase Price, when coupled with

escalating premiums on a Policy that has no Maturity Bond quickly renders the life settlement

investment increasingly expensive, more risky, and makes re-solicitation of investor premiums to

maintain the Policy a near given. Moreover, increases in the anticipated premium costs can

undermine any value to the insurance policy, leaving the investor with an investment with a

negative net present value.

132. The Purchase Price, among other material facts, was not accurately disclosed to

Petitioning Creditors and other investors, nor was the risk that additional large premium

contributions would be required in the event that the Maturity Bond insurer went bankrupt.

133. Exhibit II to the Trust Agreement lists the beneficiaries at that time, including two

of the four Petitioning Creditors.7 The Alleged Debtor, CLSF III IV, Inc., now owns the Policy.

The insurer on the Policy, Lincoln Financial Group, has sent letters to CLSF III IV, Inc.,

addressed to the Alleged Debtor and Deborah Peck in response to inquiries by Peck to the insurer

to verify coverage (the “Policy Letters”). The Policy Letters identify the Alleged Debtor as the

beneficiary. The Policy Letters are attached hereto as Ex. D. Based on the CLSF Trust III/IV

                                                            6 The Policy number and name of the insured are redacted in the Purchase Agreement as well.

7 Exhibit II to the Trust Agreement has been redacted.

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Prospectus and other documents provided to investors, the Petitioning Creditors are the proper

beneficiaries of the Policy held by the Alleged Debtor.

134. The CLSF III/IV Fund was not set up according to the promises made to investors

and its structure contracts with representations set forth in the CLSF Prospectus and related

documents. Instead of being direct beneficiaries of a U.S. insurance policy, the victims were

rendered merely unsecured creditors of the Alleged Debtor, a Florida corporation that is both the

legal and beneficial owner of the Policy. Moreover, the Policy did not mature on time and no

reinsurance was in place to fund a payout to investors in CLSF III/IV Fund. Instead, investors

were never paid by the Alleged Debtor, and Peck no longer possesses adequate funds to pay the

premiums to maintain the Policy.

Background Allegations Regarding the BGI Funds.

135. The BGI Funds are a second series of inextricably intertwined life settlement

offerings marketed to investors and administered by QI. The BGI Funds also promised a

guaranteed return on a participant’s investment based on the expected receipt of life insurance

proceeds from purchased life settlements. The prospectus for BGI Fund (the “BGI Prospectus”)

is attached hereto as Ex. E.8

136. The BGI Funds were also supposedly backed by adequate (re)insurance, Maturity

Bonds that would be used to “purchase” the underlying life insurance policy from the investors

for an amount equal to anticipated payment at maturity, if the policy failed to mature on or

before the Maturity Date. Id. at p.5. The key difference between the BGI Funds and the CLSF

Funds is that the BGI Funds promised to deliver a lower annualized return on investment (8%),

                                                            8 As with the CLSF Funds, there are numerous BGI Funds. The BGI Prospectus, however, applies to and sets the terms for all of the BGI Funds. See Ex. E, p.5.

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and the return was to be paid monthly throughout the life expectancy of the insured, with the

invested principal returned in a lump sum payment on the Maturity Date.

137. QI claimed that the BGI Funds’ monthly interest payments would be funded by

“bank guarantees/certificates of deposit purchased by a large American bank”. Each BGI Fund

had a term of investment ranging from 2 and 5 years, depending on the specific life settlement

selected by each investor. Since June 2011, investors in the BGI Funds have not received their

monthly (or other periodic) interest payments. Moreover, the vast majority of investors in the

BGI Funds never received repayment of their principal investments, as promised.

138. The BGI Prospectus discloses that Deborah C. Peck, Esq. is the “Administrator

and Depositary on behalf of BGI Trust in America.” Id. at 6. Under the section titled “Realising

the goal” [sic], the BGI Prospectus explains that “[a]s the fund is comprised of all the

participants together, they are collectively the legal person entitled to receive payment of the

insured sum on the life insurance policy.” Id. at 7. In the same section, the BGI Prospectus

represents that “an amount equal to the annual premiums for the life insurance policy during the

entire term of the contract has been paid into the trust.” Id.

139. The “Risks” section of the BGI Prospectus also represents that “[t]he reinsurance

company also insures its risks with insurance companies that have a rating of A.M. Best and

Standard & Poor’s “A” rating or higher.” Id. However, to date, most participants in the BGI

Funds have not received the insured sum on any life insurance policies, and Peck has advised

investors that several of the policies owned by Florida entities related to the BGI Funds are

lapsing or lapsed, and there is no maturity (re)insurance to provide payments to the investors in

the BGI Funds. Accordingly, the assurances and guarantees set forth in the BGI Prospectus were

illusory, as was the case with the CLSF Prospectus.

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140. As with the CLSF Funds, the BGI Prospectus attaches a “Comfort Letter” from

Blom. The BGI Prospectus references BGI Fund I, a life settlement based on a life insurance

policy with a $5,000,000 face value. Investors in BGI Fund I were promised that they would

receive monthly interest payments, and their invested capital would be funded out of the

$5,000,000 of insurance proceeds at the Maturity Date, identified as “no later than 1 November

2011.” Ex. E, pp.18-20.

141. The BGI Prospectus also attaches a letter from Peck verifying, under penalty of

perjury, that the Policy Number G******* is in full force and current on its premiums.” Id. at

p.22. It gives instructions for participation in the fund, including those instructions on the

Participation Agreement. Id. at p.25. The Participation Agreement also includes wire instructions

for investor payments to be sent to Peck’s trust account at TD Bank NA, 555 Warren Avenue,

Spring Lake Heights, NJ 07762. The account is identified as “Deborah C. Peck Attorney Trust

Account, 631 U.S. Highway 1, Suite 303, North Palm Beach, Florida 33408.” Id. at 26.

142. As with the CLSF Prospectus, the BGI Prospectus includes a “Frequently Asked

Questions” section, which includes the nearly identical explanation for the question, “What is a

Trust” as the answer to question 12. The BGI Prospectus explains:

. . . The Trustee is the official administrator of the Trust. In order to be a Trustee, a person must be independent. In order to act as a Trustee for a specific Trust, the Trustee must have a license. BGI Fund works with American Lawyers/Trustees. As lawyers, these persons are authorized to act as Trustee and are subject, when it comes to evaluating their actions, to the American code of behavior and disciplinary rules for lawyers. The Beneficiary is the person or the collection of persons who in the end receive payments from the Trust. In the case of the BGI Fund, these are the participants in the fund. Id. at p.37.

Accordingly, Peck serves in the same capacity and is subject to the same disciplinary regimes in

her capacity as trustee for the BGI Funds.

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143. On September 27, 2011, Eurojust, an agency within the European Union dealing

with judicial cooperation in criminal matters with its headquarters in the Hague, organized and

executed a joint operation in the Netherlands, Belgium, Spain, the UK, Turkey, Switzerland, the

United States, and Dubai against various of the entities and individuals related to the Quality

Investments Offering fraud. In connection with the joint operation, the various investigators and

law enforcement authorities seized real estate, automobiles, yachts, a jet, watches, and jewelry

valued in the millions of Euros.

144. The Dutch Department of Inland Revenue/FIOD (the “FIOD”) conducted a

criminal investigation that revealed the misappropriation of tens of millions of dollars of investor

funds to insiders and their entities. The Alleged Debtor was one fund among a network of

dozens of funds selling fractional interests in life settlements to investors throughout the globe.

145. In the course of its criminal investigation, the FIOD performed a forensic tracing

of the investor funds into and out of the attorney trust accounts of Peck (the “FIOD Report”).

The FIOD Report in Dutch is attached hereto as Ex. F, and a certified translation of the FIOD

report in English is attached hereto as Ex. G.

146. According to the FIOD Report, approximately $223,880,000.00 of investor funds

passed through Peck’s trust accounts. Of the more than $223 million in investor funds, at most

$50 million was used to purchase life insurance policies and only $19.5 million was used to

purchase certificates of deposit purportedly acquired to fund periodic returns promised to

investors in the BGI Funds. Although more than $143 million in investor funds were diverted for

purposes other than purchasing life insurance policies or other assets, the FIOD established that

Peck transferred approximately $9.5 million of investor funds from her trust accounts for her

own benefit. Those transfers total more than 4% of the total investor funds.

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147. In addition, the FIOD Report found that Laan, Blom, and Moens received more

than $33,553,320.009 of investor funds and Jorre Appel (“Appel”) received $11,586,000.00.

Laan is the principal of QI and was instrumental in marketing the life settlement investments in

Europe. It is unclear whether there was ever an agreement or other representation that disclosed

to investors that any group of individuals connected to the offering could be entitled to as much

as 15% of the overall funds invested. There is no such representation in either the CLSF

Prospectus or the BGI Prospectus. Moreover, when the Appel transfers are combined with the

transfers to Blom, Moens, and Laan, the total of investor funds transferred from Peck’s trust

accounts to those individuals is approximately 20% of the total of investor funds. When that total

is added to Peck’s transfers to herself, the total of investor funds transferred from Peck’s trust

account to Peck, Appel, Blom, Laan, and Moens is $54,639,320.00 – an astonishing sum, and

one that cannot be justified as a reasonable management fee or a necessary operating expense.10

148. Peck has attempted to solicit more funds from investors at the same time as she

has sold or attempted to sell policies to overseas entities for unknown prices. She has warned

investors that if they do not pay new funds to her, she will have to sell some policies to maintain

others. See Ex. H.

149. On July 20, 2012, Peck sent an email to a representative of MQIC, attaching a

lapse schedule for all of the policies that are held by the various CLSF and BGI entities in

                                                            9 This total disregards the investor funds transferred to purchase life insurance policies through Watershed, LLC, the Dubai incorporated but Seychelles based entity owned by Moens from which the CLSF and BGI Funds bought nearly all of their policies. 

10 The Transfers to Appel, Blom, Laan, Moens and Peck comprise approximately 25% of the total of investor funds. There is nothing in either the CLSF or BGI Prospectuses or the respective participation agreements that discloses that management fees or the operating expenses necessary to maintain the Funds could total as much as 25% of investor funds. 

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Florida (the “July 20, 2012 Email”).11 The July 20, 2012 Email recounts Peck’s solicitation to

investors that they pay the most urgent of the lapsing policies. The July 20, 2012 Email with the

list of lapsing polices is attached hereto as Ex. I.

150. The solicitation of further premiums from investors occurred, notwithstanding

that each participant paid a “buffer premium” to cover just such a contingency. In addition,

maturity insurance was supposed to preclude the need to pay further premiums, but the reinsurer

chosen by QI and its related entities and personnel turned out to be a fraud.

151. What is also alarming is that the lapse schedule attached to the July 20, 2012

Email reveals that life insurance policies with an aggregate face value in excess of $170.2

million may lapse or may already have lapsed due to the mismanagement of Peck, among others.

The moment that the PCI fraud came to light, Peck should have been taking measures to extend

the policies, communicating honestly and openly with investors, not falsely telling investors that

their investments were still secure, and not telling them more than a year after the PCI fraud was

discovered that she may have to sell certain policies to keep others from lapsing.

COUNT I DECLARATORY RELIEF ESTABLISHING THAT THE ALLEGED DEBTOR IS THE ALTER EGO OF

EACH OF THE CLSF, BGI AND LSF FUNDS, AND THE ADDITIONAL PECK TRUSTS AS WELL AS DEBORAH PECK, INDIVIDUALLY, AND

DEBORAH PECK, P.A.

152. The Plaintiffs reallege and reincorporate paragraphs 1 through and including 151

of this Complaint as though fully set forth herein.

153. This is an action for Declaratory Relief brought pursuant to § 86.011 of the

Florida Statutes.

                                                            11 The Policy is one of the lapsing life insurance policies listed on the Lapse Schedule. The Lapse Schedule has been redacted.

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154. On August 24, 2012, the United States Bankruptcy Court for the Southern District

of Florida, West Palm Beach Division (the “Bankruptcy Court”) in the main case of In re CLSF

III IV, Inc., Case No. 12-30081-BKC-EPK conducted an evidentiary hearing on the Petitioning

Creditors’ Omnibus Emergency Motion For Order Directing Appointment of Interim Trustee

(the “Trustee Hearing.”)[ECF# 3].

155. According to the sworn testimony of Peck elicited at the Trustee Hearing, the

Trust was formed under, and is governed by, Florida Law. The certified copy of the transcript of

the Trustee Hearing is attached hereto as Exhibit J.

156. According to the sworn testimony of Peck elicited at the Trustee Hearing, each of

the CLSF, BGI, and LSF Funds named as defendants in this Adversary Proceeding is owned by a

separate trust, the terms of which are substantially similar to the Trust, if not identical. Upon

information and belief, the Additional Peck Trusts, which are registered as corporations, may be

owned by separate trusts. According to the sworn testimony of Peck, there are 55, or perhaps

more, similar trusts over which Peck is trustee.

157. According to Peck’s sworn testimony elicited at the Trustee Hearing, each trust

owns a life settlement, consisting of a life insurance policy, and each trust names several

beneficiaries who are the investors in either the CLSF, BGI, or LSF Funds.

158. Florida law requires that Peck, as Trustee for the Trust, as well as the various

other trusts, be independent, and a fiduciary for the named beneficiaries of each trust.

159. The terms of the Trust require that Peck maintain enough money in the Trust to

“guarantee that all future obligations arising from the Insurance Policy contributed to [the] trust

will be satisfied by the Trust Corpus.” Ex. B, p.3.

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160. Florida law, as well as the terms of the Trust and, upon information and belief, the

other trusts for which Peck serves as Trustee, does not allow the commingling of assets of one

trust with another.

161. Notwithstanding the separation of life settlements into the various CLSF, BGI,

and LSF Funds and the Additional Peck Trusts and their related trusts, no separate financial

accounts, escrow or otherwise, were established for each entity. Rather, all investor funds were

deposited into the attorney trust account of Peck, in direct violation of Florida law and the terms

of the various trusts, including the Trust, as defined above.

162. According to the sworn testimony of Peck elicited at the Trustee Hearing, Peck

has “collectivized” funds paid to her by investors into one account – her attorney’s trust account

– and uses those funds ‘in her own best judgment.’ This judgment includes taking funds from

one trust to make premium payments on the policy(ies) held by another trust.

163. This commingling of funds continues, and jeopardizes the investments made into

each trust, and similarly creates claims by one trust against another, including, inter alia, claims

for fraudulent transfer under Sections 548 and 544 of the Bankruptcy Code, and applicable state

law.

164. According to the sworn testimony of Peck elicited at the Trustee Hearing, and at

the direction of Moens, Peck caused the transfer of at least $29 million out of her attorney trust

account to an overseas bank account once the PCI fraud had been discovered by the Securities &

Exchange Commission.

165. According to the sworn testimony of Peck elicited at the Trustee Hearing, Peck

has paid herself $500,000.00 a year for “managing” the Trust asset, and perhaps millions of

dollars more for “managing” the assets of the various other trusts. These excessive management

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fees were never disclosed to investors and are not authorized by the language of the Trust, the

various other trusts, or applicable Florida law.

166. Comingling of investor trust funds, ignoring the formalities of the trusts and their

proper operation under Florida law, and taking direction from Moens as to the disposition of trust

assets, an individual who does not serve in a fiduciary capacity to any of the investors or the

trusts, are serious breaches of fiduciary duty by Peck.

167. Based upon her sworn testimony elicited at the Trustee Hearing, Peck has

demonstrated that, while separate trusts and corporate entities may have been established to take

title to the various life insurance policies, the formalities of how such trusts and entities operate

have been completely disregarded, and that Peck has, and if allowed, will continue to use the

assets of these entities in her “own best judgment.”

168. Funds of investors that were earmarked for a particular policy held by a particular

entity have been completely comingled in Peck’s attorney trust account. Peck has used these

funds to pay premiums of life insurance policies across the 55 or more trusts as and when needed

in an apparent attempt to prevent life insurance policies from lapsing.

169. In addition to ignoring the formalities of the trusts and the various entities that

they allegedley own, Peck has also created a web of claims by and among the trusts and the

CLSF, BGI, and LSF Funds and the Additional Peck Trusts that may never be unwound.

170. The structure of the CLSF, BGI and LSF Funds was not consistent with the CLSF

Trust III/IV Prospectus or, upon information and belief, any prospectus issued by QI to investors

to invest into any of the various Funds. In fact, Moens, Laan, Blom, and Peck organized the

CLSF, BGI and LSF Funds and the Additional Peck Trusts the way they did to frustrate, hinder,

delay and defraud the investors so solicited.

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171. The foregoing facts, along with this Court’s equitable powers under Florida law

and Section 105 of the Bankruptcy Code, require that the Court collapse down into one estate the

identity, as well as the assets of the CLSF, BGI, and LSF Funds and the Additional Peck Trusts

along with the assets of the Alleged Debtor.

172. Additionally, because of her absolute dominion and control over the CLSF, BGI,

and LSF Funds, the Additional Peck Trusts, and their assets, the Court should further find that

Peck and Deborah C. Peck, P.A., are similarly the alter egos of those entities, as well as the alter

egos of the Alleged Debtor.

WHEREFORE, the Petitioning Creditors request that this Court enter a declaratory

judgment finding that:

(i) the Alleged Debtor, the CLSF, BGI, and LSF Funds, the Additional Peck Trusts,

Deborah Peck and Deborah C. Peck, P.A. are alter egos of each other;

(ii) the assets of the CLSF, BGI, and LSF Funds, and the Additional Peck Trusts,

including, but not limited to all insurance policies held by them, their accounts, funds,

contract and related rights, causes of action, computer and office equipment, books and

records, are part of the Alleged Debtor’s bankruptcy estate under 11 U.S.C. §541;

(iii) Deborah Peck and Deborah C. Peck, P.A. provide an accounting to the Court in

order to determine which funds, if any, held by Peck and Deborah C. Peck, P.A. are traceable

to legitimate business activity so that such funds may be released as soon as reasonably

possible;

(iv) authorizing and directing the Trustee to administer the assets of all the CLSF,

BGI, and LSF Funds and the Additional Peck Trusts for the benefit of the creditors of the

Alleged Debtor’s estate;

(v) extends the automatic stay under 11 U.S.C. §105 over the CLSF, BGI and LSF

Funds, the Additional Peck Trusts, Deborah Peck, and Deborah C. Peck, P.A., and their

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respective assets and accounts, and enjoining all persons or entities from interfering with the

Trustee’s administration of these assets and accounts; and

(vi) for such other and further relief as this Court deems necessary and appropriate.

COUNT II:

DECLARATORY RELIEF ESTABLISHING THAT THE CLSF, BGI AND LSF FUNDS, THE ADDITIONAL PECK TRUSTS, DEBORAH PECK AND DEBORAH C. PECK, P.A.

ARE CONSTRUCTIVE TRUSTEES FOR THE BENEFIT OF PETITIONING CREDITORS

173. The Plaintiffs reallege and reincorporate paragraphs 1 through 172 of this

Complaint as though fully set forth herein. This action is brought in the alternative to Count I.

174. This is an action for Declaratory Relief brought pursuant to § 86.011 of the

Florida Statutes.

175. Upon information and belief, the prospectus for each of the CLSF Funds indicated

that each “American Life Settlement” would be placed into a trust for the benefit of investors,

with Peck, again, at 631 U.S. Highway 1, Suite 303, North Palm Beach, Florida 33408 acting as

manager and custodian for the insurance policy. It was through the promises made in the

prospectuses that investors paid millions of dollars to Peck.

176. However, instead of placing the life insurance policies into the various trusts,

Peck incorporated numerous entities, the Defendants named herein, and made the trusts the

100% equity owners of the incorporated entities, including the Defendants identified in

Paragraph 6 through 83 herein.

177. Then, rather than use the investor money to continue paying premiums, Peck

commingled all of the investor funds into her attorney trust account, transferred tens of millions

of dollars out of her attorney trust account to third parties, then used the remaining funds, plus

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whatever further funds she could induce investors to tender, in order to pay premiums that were

in the process of lapsing.

178. The fiduciary/trustee relationship that investors were promised, and therefore

expected from Peck became instead a fraudulent scheme to separate the investors from their

money.

179. Accordingly, principles of equity, as well as Florida common law, require the

imposition of a constructive trust upon the assets of not only the CLSF, BGI and LSF Funds and

the Additional Peck Trusts for the benefit of the Petitioning Creditors, but a Constructive Trust

upon the assets of Peck, and Deborah C. Peck, P.A.

WHEREFORE, the Plaintiffs request that this Court enter an order imposing a

constructive trust upon the assets of the CLSF, BGI and LSF Funds, the Additional Peck Trusts,

Deborah Peck, individually, and Deborah C. Peck, P.A. for the benefit of the Petitioning

Creditors. Furthermore, Plaintiffs request that, to the extent that they can demonstrate that

investor funds entrusted to Peck were transferred to third parties, that leave to amend the relief

sought in this Count III be freely given in order to seek the imposition of a constructive trust

upon the assets transferred to those third parties, and for any other, further relief this Court

deems equitable and just.

COUNT III: DECLARATORY ACTION DETERMINING THAT THE

PROPERTY OF THE CLSF, BGI, AND LSF FUNDS, THE ADDITIONAL PECK TRUSTS AS WELL AS ANY AND ALL INVESTOR PROPERTY IN THE CUSTODY

OF DEBORAH PECK, INDIVIDUALLY AND DEBORAH PECK, P.A. ARE PROPERTY OF THE ALLEGED DEBTOR, AND FOR TURNOVER PURSUANT TO §§ 542 AND 543

180. The Plaintiffs reallege and reincorporate paragraphs 1 through 179 of this

Complaint as though fully set forth herein.

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181. Because the CLSF, BGI and LSF Funds, the Additional Peck Trusts, Deborah

Peck and Deborah C. Peck, P.A. are alter egos of each other, their respective assets are property

of the Alleged Debtor’s estate pursuant to Section 541 of the Bankruptcy Code.

182. Section 542(a) of the Bankruptcy Code provides that any entity in possession,

custody, or control, during the bankruptcy case, of property that a trustee may use, sell or lease

shall deliver to the trustee, and account for, such property or the value of such property.

183. Section 542(b) provides that if an entity owes a debt that is property of the estate

and that is matured, payable on demand, or payable on order, that entity shall pay that debt to the

Trustee.

184. Section 542(e) provides that, subject to any privilege, the Court may order an

attorney, accountant or other person that holds recorded information, including books,

documents, records, and papers, relating to the debtor’s property or financial affairs, to turn over

or disclose such recorded information to the trustee.

185. CLSF, BGI and LSF Funds, the Additional Peck Trusts, Deborah Peck,

individually, and Deborah C. Peck, P.A. are alter egos of each other. Accordingly, their

respective property is property of the Alleged Debtor’s bankruptcy estate.

186. Section 542(a) requires each Defendant entity to this adversary proceeding,

including TD Bank and Wells Fargo, to deliver to the Interim Trustee, and account for, all

property of the estate.

187. Section 542(b) requires each Defendant entity to this adversary proceeding,

including TD Bank and Wells Fargo, to pay to the Interim Trustee any money or property of the

Alleged Debtor’s estate that is matured, payable on demand, or payable on order. Moreover, to

the extent that CLSF, BGI and LSF Funds, the Additional Peck Trusts, Deborah Peck,

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individually, and Deborah C. Peck, P.A. owe each other obligations that are matured, payable on

demand, or payable on order, and it is practical to do so, are required to tender such obligations

to the Interim Trustee.

188. To the extent that either Deborah C. Peck, P.A. or Deborah Peck, individually,

assert that they are acting as counsel to the CLSF, BGI or LSF Funds, the Additional Peck

Trusts, or any trust which owns stock in any such entity, including any of the Defendants

identified in Paragraphs 6 through 83, then the Plaintiffs request that the Court order them, or

any other attorney, accountant or other person acting by or through them that holds recorded

information, including books, documents, records, bank statements, wire transfer records, and all

papers relating to the Alleged Debtor’s property or financial affairs, to turn over or disclose such

recorded information to the Interim Trustee.

189. Section 543(a) of the Bankruptcy Code prevents a custodian with knowledge of

the commencement of the bankruptcy case from disbursing from, or taking any action in the

administration of, property of the debtor, proceeds, product, offspring, rents, or profits of such

property, or property of the estate, in the possession, custody, or control of such custodian.

190. Section 543(b) requires a custodian to:

(1) deliver to the trustee any property of the debtor held by or transferred to such custodian, or proceeds, product, offspring, rents, or profits of such property, that is in such custodian’s possession, custody, or control on the date that such custodian acquires knowledge of the commencement of the case; and

(2) file an accounting of any property of the debtor, or proceeds, product, offspring, rents, or profits of such property that, at any time, came into the possession, custody, or control of such custodian.

191. To the extent that Deborah C. Peck, P.A., or Peck, individually, assert that they

are custodians over any property of the CLSF, BGI or LSF Funds, or the Additional Peck Trusts,

either as trustee, or in some other capacity, or that Deborah C. Peck, P.A., or Peck, individually

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are holding any other property as custodians for Plaintiffs, then they should be required to

turnover all such property to the Interim Trustee and provide an accounting of any such property

of the CLSF, BGI or LSF Funds, the Additional Peck Trusts, or any property held by Peck

individually and/or Deborah C. Peck, P.A., or proceeds, product, offspring, rents, or profits of

such property, that at any time came into the possession, custody, or control of these entities, as

asserted by the custodian(s).

WHEREFORE, the Plaintiffs request that this Court enter a declaratory judgment finding:

(i) that because the CLSF, BGI and LSF Funds, Additional Peck Trusts, Deborah

Peck, individually, and Deborah C. Peck, P.A. are alter egos of each other, then their respective

property interests are property of the Alleged Debtor’s bankruptcy estate pursuant to Section 541

of the Bankruptcy Code;

(ii) that the CLSF, BGI and LSF Funds, Additional Peck Trusts, Deborah Peck,

individually, and Deborah C. Peck, P.A., and Wells Fargo and TD Bank are to deliver to the

Interim Trustee, and account for, all property of the estate pursuant to §542(a) of the Bankruptcy

Code;

(iii) to the extent that CLSF, BGI and LSF Funds, Additional Peck Trusts, Deborah

Peck, individually, Deborah C. Peck, P.A., Wells Fargo and TD Bank owe each other obligations

that are matured, payable on demand, or payable on order, and it is practical to do so, are

required to tender such obligations to the Interim Trustee; and

(iv) to the extent that Peck asserts that she is a custodian of property of the estate,

requiring her to:

a. deliver to the Interim Trustee any property of the Alleged Debtor or its alter

egos held by or transferred to Peck, or proceeds, product, offspring, rents, or

profits of such property, that is in Peck’s possession, custody, or control as of

the date of the filing of the involuntary bankruptcy case; and

b. file an accounting of any property of the Alleged Debtor and its alter egos, or

proceeds, product, offspring, rents, or profits of such property, that, at any

time, came into the possession, custody, or control of Peck; and granting any

other, further relief as this Court deems necessary and appropriate.

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COUNT IV TEMPORARY RESTRAING ORDER AND PRELIMINARY AND PERMANENT

INJUNCTION PURSUANT TO F.R.Civ.P 65(b)

192. The Plaintiffs reallege and reincorporate paragraphs 1 through 191 of this

Complaint as though fully set forth herein.

193. The immediate issuance of a temporary restraining order (a “TRO”) is necessary

and appropriate under Fed.R.Bank.P. 7065 and Fed.R.Civ.P. 65(b) because immediate and

irreparable injury will result to the estate if, pending determination of whether the assets of the

alter egos are property of the estate, Peck is allowed to continue exercising dominion and control

over these assets.

194. In sworn testimony elicited at the Trustee Hearing, Peck admitted to transferring

large sums of money off-shore when she, Moens, and Laan believe their pecuniary interests are

being threatened. In light of this conduct, and the on-going comingling and transferring of funds

from one trust for the benefit of another, it is reasonable to assume that Peck will continue to

misappropriate, divert, or otherwise remove the proceeds of assets that may be property of the

estate beyond the Interim Trustee’s reach.

195. Upon information and belief, Peck maintains financial accounts with Wells Fargo,

and perhaps with TD Bank, and it is those financial accounts into which Peck has deposited

investor funds.

196. As a result of the foregoing, it is in the best interests of all parties that Peck, and

anyone else acting by or through the CLSF, BGI and LSF Funds and the Additional Peck Trusts

be prevented from taking any action or executing any document consistent with their continued

ownership or control of potential property of the estate, and that all persons with knowledge of

this action and bankruptcy case be enjoined from proceeding against or exerting ownership or

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control over these entities and assets to the detriment of the Interim Trustee and the Alleged

Debtor’s Estate.

197. The estate will be irreparably damaged if the Peck is allowed to continue acting as

trustee for the investors and as the sole officer and director of the Defendant Entities identified in

Paragraphs 6-83. The Defendants identified in Paragraphs 6-83 are owned by various trusts

controlled by Peck, and those Defendants hold legal title to the assets, the various life settlements

and insurance policies, that are being held for the benefit of inter alia Plaintiffs. Without an

injunction from this Court, Peck could transfer, secret, or waste the assets of the Defendants and

irreparably damage Plaintiffs.

198. For all the foregoing reasons, the Plaintiffs lack an adequate remedy at law as a

practical matter. The equitable relief requested herein is required to prevent the likely further

dissipation or wasting of assets in the event that injunctive relief is not granted.

199. Given the sworn testimony elicited from Peck at the Trustee Hearing, the

Plaintiffs submit that all elements of the relief requested in Counts I, II and III have been

established, making a likelihood of ultimate success on the merits very likely.

200. No relief requested herein is against any public policy considerations recognized

at law or equity. To the contrary, the relief requested is consistent with all relevant public policy

and equitable considerations, and will protect not only the interests of the Petitioning Creditors,

but those of all investors who have been defrauded.

201. Plaintiffs ask that no bond be set for the issuance of such an injunction.

WHEREFORE, the Plaintiffs request that this Court immediately enter an order:

(1) temporarily restraining Deborah Peck, individually, and Deborah C. Peck, P.A., and

all persons and entities operating by or through them from transferring, selling,

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dissipating, wasting, encumbering, hypothecating, or otherwise exercising any dominion

or control over the assets of any of the Defendants identified in Paragraphs 6 through 83

or the Plaintiffs; and

(2) restraining Wells Fargo and TD Bank from approving, authorizing, or otherwise

allowing any transfers of any property related to any and all of the Defendants identified

in Paragraphs 6 through 85 and the Plaintiffs, and freezing all accounts of whatever

nature related to the Defendants identified in Paragraphs 6 through 85; and

(3) preliminarily enjoining Deborah Peck, individually, and Deborah C. Peck, P.A., and

all persons and entities operating by or through them from transferring, selling,

dissipating, wasting, encumbering, hypothecating, or otherwise exercising any dominion

or control over the assets of any and all of the Defendants identified in Paragraphs 6

through 83 or the Plaintiffs; and

(4) preliminarily enjoining Wells Fargo and TD Bank from approving, authorizing, or

otherwise allowing any transfers of any property related to all of the Defendants

identified in Paragraphs 6 through 85 and the Plaintiffs, and preliminarily freezing any

and all accounts of whatever nature related to the Defendants identified in Paragraphs 6

through 85; and

(5) permanently enjoining Deborah Peck, individually, and Deborah C. Peck, P.A. and all

persons and entities operating by or through them from transferring, selling, dissipating,

wasting, encumbering, hypothecating, or otherwise exercising any dominion or control

over the assets of any and all of the Defendants identified in Paragraphs 6 through 83 or

the Plaintiffs; and

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501 Brickell Key Drive ∙ Suite 300 ∙ Miami, FL 33131 ∙ T. 305.722.2002 ∙ F. 305.722.2001 ∙ www.ecclegal.com 

(6) permanently enjoining Wells Fargo and TD Bank from approving, authorizing, or

otherwise allowing any transfers of any property related to any and all of the Defendants

identified in Paragraphs 6 through 85 and the Plaintiffs, and permanently freezing any

and all accounts of whatever nature related to the Defendants identified in Paragraphs 6

through 85; and

(7) for such further relief as the Court deems necessary and just.

Respectfully submitted, EHRENSTEIN CHARBONNEAU CALDERIN Attorneys for the Plaintiffs 501 Brickell Key Drive, Suite 300 Miami, Florida 33131 T. 305.722.2002 F. 305.722.2001 By: /s/ Robert Paul Charbonneau Robert P. Charbonneau, Esq.

Fla. Bar No. 968234 rpc@ecclegal.com

Daniel L. Gold, Esq. Fla. Bar No. 761281

dg@ecclegal.com and By: /s/ Ryan Dwight O’Quinn

Ryan Dwight O’Quinn, Esq. O’Quinn Stumphauzer, P.L. Co-Counsel for Plaintiffs Florida Bar No. 0513857 One SE Third Avenue, Suite 1820 Miami, FL 33131 Tel: (305) 371-9686 Fax: (305) 371-9687 rdo@oquinnstumphauzer.com

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