The SEC’s fraud case against Synergy Settlement Services accused the Orlando lien-resolution firm and its two top executives of using a nonprofit pooled special needs trust as a shell to divert money from disabled personal injury victims into their for-profit business. A federal judge in the Middle District of Florida ended the case on March 11, 2024, with a final judgment ordering Synergy, CEO Jason D. Lazarus, and president Anthony F. Prieto Jr. to pay a combined total of more than $627,000 in disgorgement, prejudgment interest, and civil penalties.1U.S. Securities and Exchange Commission. Final Judgment, SEC v. Synergy Settlement Services
What the SEC Alleged
The Commission filed its civil complaint on May 2, 2022, as Case No. 6:22-cv-00820. Named alongside Synergy, Lazarus, and Prieto were the Foundation for Those with Special Needs Inc. and Special Needs Law Firm PLLC.2U.S. Securities and Exchange Commission. Litigation Release No. 25379
The Foundation was central to the case. Lazarus and Prieto had created it to run a pooled special needs trust, a vehicle authorized under federal law that lets people with disabilities hold settlement funds without losing Medicaid or Supplemental Security Income eligibility. Because federal rules require these trusts to be established and managed by a nonprofit, beneficiaries were told a legitimate nonprofit trustee was handling their money. The SEC alleged the Foundation was in fact a shell used to funnel funds to Synergy.2U.S. Securities and Exchange Commission. Litigation Release No. 25379
The Three Practices at the Center of the Case
The complaint identified three categories of misconduct. First, the defendants allegedly siphoned at least $775,000 in trustee and joinder fees straight out of beneficiaries’ accounts to Synergy, and concealed the transfers from the beneficiaries, the IRS, and the Social Security Administration.2U.S. Securities and Exchange Commission. Litigation Release No. 25379
Second, when beneficiaries died, leftover funds in their sub-accounts were allegedly used to reimburse the defendants and to pay for events like golf tournaments and beach parties that promoted Synergy’s business.3Business CCH. SEC Charges CEO and President of Synergy Settlement Services
Third, beneficiaries’ money was placed in a class of mutual funds that charged double the fees the defendants had disclosed to trust participants.2U.S. Securities and Exchange Commission. Litigation Release No. 25379
All five defendants were charged with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Synergy, Lazarus, and Prieto also faced charges under the Investment Advisers Act of 1940 for fraud in their role as investment advisers to pooled investment vehicles, along with securities registration violations.2U.S. Securities and Exchange Commission. Litigation Release No. 25379
The March 2024 Final Judgment
The court’s final judgment on March 11, 2024, broke down the financial penalties as follows:1U.S. Securities and Exchange Commission. Final Judgment, SEC v. Synergy Settlement Services
- Synergy Settlement Services: $43,743.68 in disgorgement, $3,772.39 in prejudgment interest, and a $400,000 civil penalty, payable in four installments.
- Jason D. Lazarus: a $95,000 civil penalty.
- Anthony F. Prieto Jr.: an $85,000 civil penalty.
Lazarus and Prieto admitted the allegations in the SEC’s amended complaint were true for purposes of federal bankruptcy law. That admission means neither can discharge the debt in bankruptcy. The court kept jurisdiction to enforce the judgment, including through civil contempt if payments are missed.1U.S. Securities and Exchange Commission. Final Judgment, SEC v. Synergy Settlement Services
The True Link Financial Advisors Settlement
A separate administrative proceeding named the outside investment adviser that managed the Foundation’s trust assets. The SEC found that True Link Financial Advisors LLC and its CEO, Kai H. Stinchcombe, ignored warning signs that Synergy was controlling the trusts and profiting from them. Stinchcombe had signed agreements routing trustee fees directly to Synergy rather than to the nonprofit trustee, and True Link took investment directions from Synergy employees instead of the Foundation.4U.S. Securities and Exchange Commission. Administrative Proceeding File No. 3-20838
True Link and Stinchcombe settled without admitting or denying the findings. True Link paid a $200,000 civil penalty, Stinchcombe personally paid $20,000, and both were ordered to cease and desist from future violations.4U.S. Securities and Exchange Commission. Administrative Proceeding File No. 3-20838
Will Victims Be Compensated?
The judgment authorized the SEC to propose a Fair Fund under the Sarbanes-Oxley Act, which would allow collected disgorgement and penalties to be distributed to the affected beneficiaries. As of the most recent available information, the SEC had not established that fund, and no distributions had been announced.1U.S. Securities and Exchange Commission. Final Judgment, SEC v. Synergy Settlement Services
Is Synergy Still Operating?
Yes. Synergy Settlement Services appears to remain in business after the judgment. Its website continues to offer lien resolution and settlement planning services, with scheduling and client-portal features active.5Synergy Settlement Services. Press Room The available record does not indicate whether the company changed its leadership or restructured after the case closed.