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Medical Profession Association, respectively. PES established,
manages, and controls both of these associations, neither of
which is a valid or operating professional association. PES
established both associations for the sole purpose of forming the
subject VEBA’s and of furthering its VEBA scheme by misleading
targeted investor/medical professionals into believing that
respectable, established medical associations were sponsoring an
investment in the VEBA’s. PES named the VEBA’s after the medical
profession to attempt further to legitimize its sale of the
advertised tax benefits with the targeted investors. PES paid an
established medical society, the Medical Society of New Jersey, a
voluntary society of physicians and surgeons operating in the
State of New Jersey, approximately $25,000 to endorse the SC VEBA
as a final attempt to legitimize its scheme. PES represented to
the Medical Society of New Jersey that the SC VEBA provided
medical professionals with tax-deductible payments for high
policy limits of life insurance and the potential to convert some
or all of those payments into annuities or cash value life
insurance which would allow the policyholders ultimately to
withdraw that cash value tax free.
The subject VEBA’s are structured so that each participating
employer establishes its own plan thereunder, executes its own
plan document, and has a plan name that bears its own name. Each
employer, with the aid of an insurance salesman (primarily Mr.
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