A class action lawsuit filed by the law firm of Cohen & Malad in the Marion Superior Court yesterday accuses The National Foundation For Special Needs Integrity, Inc., which does business as Special Needs Integrity, of breaching the fiduciary duty it owed to the special needs persons whose trust funds it was administering by paying millions of dollars to an Indianapolis law firm for legal fees and other expenses that it alleges weren't for the benefit of the beneficiaries. According to the lawsuit, Special Needs Integrity, a non-profit organization, provides pooled trust services for persons with disabilities who receive means-tested government benefits. The lawsuit accuses the non-profit of paying out an estimated $2.4 million to the Indianapolis law firm of Lewis & Kappes since 2011 alone.
The named plaintiff in the lawsuit, Timothy Todd from Bloomington, had deposited approximately $57,000 into the pooled trust fund for his benefit. Nearly 12% of his original investment, or about $6,652 was charged to his account as a pro-rata share of the legal expenses owed to Lewis & Kappes as "general expenses." The lawsuit alleges Special Needs Integrity billed Todd's account more than the terms of the special needs trust permitted. Todd's trust funds capped his annual trust administration fees at 1.5%, but it was billed 3.0% annual fee according to the lawsuit. The lawsuit claims Todd's account has been over-billed $9,630 since his funds were pooled with the trust fund. "Based on an extrapolation of these figures across the sub-accounts of the Trust, it appears that Special Integrity Trust withdrew approximately $3,000,000 from trust funds in beneficiaries' sub-accounts since 2011," the lawsuit reads.
According to Secretary of State records, the registered agent for Special Needs Integrity is Suzanne R. Gaidoo with a business address of 301 E. Carmel Drive, #C-100, Carmel, Indiana. Gaidoo is a partner at the law firm of Lewis & Kappes according to the firm's website. Her areas of expertise are identified as non-profit, business, corporate and health care. Her listing indicates she serves as general counsel for several non-profit organizations. The Secretary of State's website lists the president of Special Needs Integrity as Gary Nead with an office address at 2500 One American Square, Indianapolis, the same address used by Lewis & Kappes. Nead appears to work indepently from the firm. He is not a licensed attorney in Indiana and is not listed as an employee of the firm on its website. The incorporator of Special Needs Integrity is listed as Kenneth Service, who lists an address of 1221 Oak Knoll Court, Indianapolis.
The Indianapolis Star has written about the lawsuit here. The Star says that IRS tax filings by Special Needs Integrity show less paid in legal fees than alleged in the lawsuit. "A Star review of the nonprofit's filings found $274,163 spent on legal fees from 2011 through 2014. Special Needs Integrity also paid $146,411 to Carmel-based Special Needs Consultants, LLC, for legal and adviser services." The Star article makes no mention of the law firm that was paid the fees questioned by the lawsuit.
5 comments:
Gary, why is it so hard for so-called "journalists" at the Star to do the very basic research you've done to connect the dots. Ah, wait! The Star protects the downtown mafia, which includes the deep-pocket law firms.
Again, thank you for digging!
Does the Star still have Journalist? They get paid no matter what so they do as little as they can get away with. They love those fluff stories especially about Ballard and Brainard. Gary is more of a journalist then all the employees at Star put together.
Well, 12:02 journalist are not only stupid by nature they are also lazy.
I emailed the so-called / self-identified "investigative journalist and watchdog" at the Star to press her about the issue. Her response: She and her editors are aware of the law firm in question as well as the attorney. However, because neither were named in the initial lawsuit, the Star did not feel they need to publish this information.
And the beat goes on...
Lewis & Kappes is not a named defendant to the lawsuit, but it is named as the law firm paid legal fees and expenses by the trust that are the focus of the plaintiff's lawsuit.
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