Telemarketer Alliance Suspends Operations Pending New Ruling

LAKE FOREST —  Alliance for Mature Americans, a telemarketer of living trusts and retirement annuities accused of fraud by the state, has shut down some operations temporarily while it seeks to clarify a court order issued against it this week.

The company sent 85 telemarketers home Friday morning, telling them not to come back until Wednesday. It said it expects to be back in business then.

A Los Angeles County Superior Court judge on Thursday granted the state attorney general’s request for a preliminary injunction that bars Alliance and its principals from disposing of the company’s assets. The order, however, allows it to continue operations as long as it doesn’t violate any laws.

Judge Robert H. O’Brien denied a request by the State Bar of California to require Alliance to use only licensed attorneys to do much of the work on trusts and wills that it now does for clients without lawyers.

One of the company’s marketing tactics is to tell prospective clients that by using its services they will avoid often expensive attorney fees in setting up living trusts, which enable people to shelter their estates while alive and to avoid expensive court proceedings over the disposition of their assets after they die.

Each side in the case claimed the injunction was a victory. The suit, filed July 18 by California Atty. Gen. Dan Lungren, the state bar and the state Insurance Department, claims that Alliance for Mature Americans has used high-pressure scare tactics and misleading statements to market more than $200 million in sometimes risky retirement investments to elderly clients.

An attorney for Alliance said Friday that O’Brien’s actions supported the company’s contention that the suit was an effort by the State Bar to block non-attorneys from marketing living trusts and advising retirees on estate planning matters.

“I don’t view [the ruling] as a blow to our position,” said San Jose lawyer James Towrey, the State Bar’s president. “And overall, I believe the order shows that the court is concerned abut the business practices of Alliance for Mature Americans.”

A hearing has been scheduled for Tuesday in Los Angeles Superior Court to seek a clarification, Stegman said.