Pennsylvania Record

Friday, December 13, 2019

Retired Philadelphia Inquirer journalist claims he lost retirement in Woodbridge Ponzi scheme

Lawsuits

By Noddy A. Fernandez | Jan 23, 2019

Law money 04

PHILADELPHIA — A retired journalist is suing a financing service company, citing alleged intentional misrepresentation, fraud and unjust enrichment.

Robert J. Gaffney filed a complaint on Jan. 7 in the U.S. District Court for the Eastern District of Pennsylvania against Michael J. Kandravi, Explore Financial Group and The 401K Rollover Store for alleged violation of the Pennsylvania Securities Act and the Pennsylvania Unfair Trade Practices and Consumer Protection Act.

According to the complaint, following his retirement from the Philadelphia Inquirer, Gaffney was solicited to transfer his retirement savings, or IRS Code Section 401(k) plan, from the Vanguard Group to defendants. 

His claims relied on defendants' assurance that they would construct a safe and virtually risk-free investment portfolio for him that would provide retirement income, so he transferred approximately $350,000 to be used to purchase annuities and $280,000 in the Woodbridge Mortgage Fund 2, LLC for investment. 

However, in January 2018, plaintiff received information that Woodbridge had filed for bankruptcy and the securities sold to him were not registered nor were they exempt from registration pursuant to the SEC. As a result, Gaffney claims he could lose substantially his entire retirement savings by relying upon defendants' tainted investment advice. 

The plaintiff holds Michael J. Kandravi, Explore Financial Group and The 401K Rollover Store responsible because the defendants allegedly created the Woodbridge Mortgage Fund as a massive Ponzi scheme and earned substantial undisclosed commissions, or as much as 10 percent of plaintiff’s entire investment in connection with the sale of unregistered securities to plaintiff.

The plaintiff requests a trial by jury and seeks judgment for compensatory damages in the amount of $250,000, interest, punitive damages, attorney's fees, costs of suit, and such other relief as the court may deem, just and fair and equitable. He is represented by Nicholas Guiliano of The Guiliano Law Group in Philadelphia.

The U.S. District Court for the Eastern District of Pennsylvania Case No. is 2:19-cv-00061-MSG.

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Organizations in this Story

Philadelphia InquirerU.S. District Court for the Eastern District of PennsylvaniaThe Guiliano Law Group

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