Goodman & Nekvasil, P.A., Law Office Announces a $276,226.46 Arbitration Award on Behalf of Victim of the $1.2 Billion Woodbridge Mortgage Investment Fund Ponzi Scheme

Goodman & Nekvasil, P.A., Law Office Announces a $276,226.46 Arbitration Award on Behalf of Victim of the $1.2 Billion Woodbridge Mortgage Investment Fund Ponzi Scheme

Jan 28, 2019

 

Quest Capital Strategies, Inc., Loses First Woodbridge Case to Go to a Final Hearing

 

Boca Raton, Florida, Arbitration Panel Rejects Defense That Broker-dealer Has No Duty to Investor Who Did Not Have an Account with the Firm

 

Panel Accepts Woodbridge Mortgage Investment Fund Promissory Note Valuation at 35.5 Cents on the Dollar

 

CLEARWATER, Fla.,  — Goodman & Nekvasil, P.A., announces they have won a $276,226.46 FINRA arbitration award against Quest Capital Strategies, Inc. (“Quest”) on behalf of John C. Medeiros (“Medeiros”), a resident of Boca Raton, Florida.

 

In 2013, Medeiros, a retired U.S. Coast Guard veteran, was living in Virginia and taking care of his blind wife, Patricia Medeiros.  He received a marketing letter from Quest offering a $100 gift card to Olive Garden if he met with their financial advisor, Frank R. Dietrich (“Dietrich”). Quest explained in this letter that Dietrich specialized in the needs of retirees and pre-retirees and offered “safety-net” style investing and a lifetime income plan.

 

Medeiros met with Dietrich in October 2013, and Dietrich induced him to invest $400,000 in Woodbridge Mortgage Investment Fund, a fraudulent $1.2 billion Ponzi scheme that ultimately went bankrupt in December 2017. Medeiros lost $140,035.20.

 

Quest failed to disclose to Medeiros that Dietrich had previously been sanctioned by the Virginia Bureau of Insurance for serious alleged misconduct, and that Dietrich had just settled a customer complaint.

 

The evidence showed that Quest allowed Dietrich to work from his home in Fairfax Station, Virginia, that his direct supervisor was located more than 2500 miles away in Lake Forest, California, and responsible for supervising hundreds of Quest financial advisors scattered around the country, and that Quest waited more than 15 months, i.e., until June 2014 to visit Dietrich’s office.  The evidence also showed that Quest missed numerous red flags concerning Dietrich’s involvement with Woodbridge.  Dietrich, one of Quest’s largest producers, sold more than $10.8 million in Woodbridge to 58 investors between 2013 and 2017.

 

“The Arbitration Panel properly found that Quest should not have allowed a financial advisor with a checkered background and no local supervision to target retirees and pre-retirees,” said Kalju Nekvasil, Esq., of Goodman & Nekvasil, P.A., the Clearwater, Florida, law firm representing Medeiros.

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