Volume 2 Number 27 July 4, 2005

TEXT VERSION

On July 4, 1776, as a nation, the United States claimed our independence from Britain and democracy was born.  Every day thousands leave their homes to come to the “land of the free and the home of the brave” so they too have the opportunity to seize the American Dream. Many of us are with family and friends today to celebrate our great country and the freedoms that we cherish and have long fought to protect. Today offers us a special opportunity to recognize and reflect on the generations of men and women who for more than two centuries have fought to protect our country and have given their lives to defend our freedoms.  Their love of country and devotion to duty is an inspiration. As an army veteran, I am proud to have served my country. Amidst the celebration, let’s pause for a moment and pray for our troops who are bravely fighting for us to maintain our independence.  We also acknowledge the families and loved ones who support our troops and remember the service of our veterans. Enjoy yourself this Independence Day and please celebrate safely.   Walton County was created in 1824, shortly after Florida became a territory of the United States. The courthouse is in the county seat of DeFuniak Springs.

**CONSUMER ALERT** GALLAGHER: BEWARE OF FINANCIAL SCAMS TARGETING RELIGIOUS AND COMMUNITY GROUPS Florida’s Chief Financial Officer Tom Gallagher today cautioned Floridians to be on the lookout for con artists who claim to be members of the same religious or community-based group and use that affiliation to defraud group members.  Gallagher said “affinity” fraud includes a variety of Ponzi schemes in which affiliation is used to gain trust. About 400 Floridians allegedly invested about $15 million in fictitious “prime bank notes” in this scheme that has now been placed in receivership.  According to the U.S. Securities and Exchange Commission, Learn Waterhouse Inc. operated a Ponzi scheme that defrauded 1,900 investors in 39 states out of $56.5 million in 2003 and 2004.  Learn Waterhouse Inc. allegedly depended on investments from new recruits to pay off earlier investors and diverted millions of dollars to the personal use of its officers and directors. “It’s unconscionable that con artists would exploit the faith, trust and friendship among members of a church,” Gallagher said.  “Floridians should be wary of people who ask them to invest money and use their shared background as their primary marketing tool.  Always thoroughly research an investment and its salesperson.” CONTINUED

BEWARE OF PAYDAY LOANS   In need of a quick fix to a cash flow shortage, people may decide to take out a “payday loan.”  But Florida’s Chief Financial Officer Tom Gallagher urges consumers to beware - this type of borrowing can become very expensive, and for some customers, impossible to pay off.   Predatory lenders often seem legitimate.  However, they target people who can least afford to lose money, namely seniors who are property-rich but cash-poor, inexperienced young borrowers and consumers in dire financial straights.  Junior enlisted service personnel are prime targets in military towns.   “Our service men and women are experiencing the extraordinary pressure of family separation and deployments, and these kinds of loans may seem like an easy option to help with emergency needs.  Military personnel are more susceptible to the pitches of the loan companies in times of stress,” Gallagher said. The lenders also know service men and women are getting a steady paycheck – which minimizes the lender’s risk. Lenders also know these men and women are eager to keep their finances in order, which creates an incentive for quick fixes if finances are slipping.  Payday lenders are lined up outside the military bases, as proximity means access. Many have names like Armed Forces Loans or Loans for Military which make them sound legitimate.  CONTINUED

STATEMENT FROM FLORIDA’S CHIEF FINANCIAL OFFICER TOM GALLAGHER ON ALLSTATE FLORIDIAN  “The agreement reached by Allstate Floridian Insurance Company and Insurance Commissioner Kevin McCarty doesn’t offer any real relief to policyholders.  This is just a smokescreen by Allstate to delay an outrageous rate hike without scrutiny by regulators. “On top of that, the agreement only calls for one public hearing.  That’s ridiculous considering Allstate Floridian has 640,000 policyholders.  More public hearings must be held so policyholders have the opportunity to ask the company questions and to voice their concerns. “We need to re-evaluate the practice of ‘use and file’ in Florida. Every rate request should be reviewed and approved by the insurance commissioner before Floridians get the bill.”

FATHER, SON CHARGED WITH WORKERS’ COMPENSATION FRAUD  A father and his son are facing workers’ compensation fraud charges for allegedly not having the required workers’ compensation coverage for employees, resulting in more than $1 million in evaded premiums.  The arrests on Wednesday were the result of an investigation by the Department of Financial Services (DFS), Bureau of Workers’ Compensation Fraud. John J. Reaves, Jr., 63, allegedly knew that his son, Shawn, 32, operator of O’Hara supplies, did not have workers’ compensation coverage for his employees, who provided labor for two companies owned by the elder Reaves, Southeast Enterprise Group and JR Deck Systems.  FCCI insured SE Enterprise Group and JR Deck Systems Inc., but incurred losses attributable to employees of O’Hara Supplies.   “Evading premiums puts employees at risk of not having the coverage they would need if they are injured on the job and shifts the cost burden to honest employers,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees DFS. “A healthy workers’ compensation system is crucial to Florida’s economy, and we will continue to aggressively investigate instances of fraud and abuse.”  CONTINUED