Federal Employee Benefit Counselors

Earlier this week, the SEC filed a lawsuit against Keystone Capital Partners, Inc., also known as Federal Employee Benefit Counselors (FEBC), and individuals involved with the enterprise, including Christopher S. Laws, Jonathon Dax Cooke, Danny S. Hood, and Brandon P. Long.

Keystone used false and misleading statements to persuade Federal government employees to move money from their TSP accounts into variable annuities. In at least some cases, the TSP account holder was led to believe that (1) the Keystone individuals were tied somehow to the Federal government and (2) the variable annuity would be a better deal for them than it actually was.

When you buy a variable annuity, your money is frozen—you can’t get it out for a long period of years without paying a stiff financial penalty. And, while you are locked in, you keep getting tagged with lots of costs, fees, and expenses. Most don’t even notice their nest egg money is dribbling out, but it’s happening, and it really adds up over the years.

A few years back, our firm was hired to recover financial losses for about 160 victims of a fraudulent scheme called the “Federal Employee Benefits Program,” or, FEBG. FEBG was run by Wayne McLeod in Jacksonville. McLeod convinced about 160 employees of various Federal government agencies to “invest” in FEBG. His brochures were decked out with bald eagles and red, white, and blue bunting. McLeod’s victims thought that he was “one of them:” a Gulf War veteran and true patriot. This is called “affinity fraud.” McLeod led them to believe that FEBG was intertwined somehow with the Federal government.

According to the SEC Complaint, the Keystone individuals may have acted similarly. Specifically, the TSP Reports described FEBC as a “national consulting group dedicated to educating federal employees,” and stated that FEBC’s counselors “received extensive training in…all the alternative benefit programs available to federal employees.” The TSP Reports also depicted an eagle-encircled insignia in red, white, and blue colors, similar to the seal used by some federal agencies.