Money Tree Lending, a Port Charlotte-based lending company, has been placed under state control following a June court ruling. This action impacts approximately 138 investors who collectively entrusted an estimated $5.6 million in annuity contracts with the company. Annuity contracts, a popular retirement income vehicle, typically guarantee fixed payments over a specified period in exchange for premium payments.
Money Tree Lending, licensed as a mortgage lender, asserted its right to sell annuity contracts under Florida law, citing a state code exemption from specific filing requirements on its website. However, the Florida Department of Financial Services (DFS) contested this interpretation. Leon County Circuit Judge Nikki A. Clark ultimately ruled in favor of the state in a comprehensive 14-page order.
This decision stems from a joint investigation conducted by the DFS, the Office of Insurance Regulation, and the Office of Financial Regulation. Money Tree Lending’s legal representative, Gary Klein, indicated that his clients were contemplating an appeal, having 30 days to pursue this option. Klein stated that Money Tree had attempted to collaborate with state regulators to address their concerns and prevent the takeover, but regulators appeared determined to close the company.
The state alleged that Money Tree Lending misappropriated investor funds for several purposes: a $347,000 mortgage for company president Phil Sampiere Jr., a loan to the spouse of the company’s vice president, a roughly $240,000 purchase of the company’s office building, and the acquisition of two recreational vehicles for approximately $40,000. Sampiere deferred all questions to Klein, who attributed these purchases to Money Tree’s recovery efforts following Hurricane Charley, claiming, “These things were going to be repaid.”
DFS spokeswoman Bob Lotane assured investors that regulators would strive to safeguard their investments and recover as much as possible, though a full return was not guaranteed. Lotane added that determining the total value of Money Tree’s assets and the amount investors could recoup would require time.
While Money Tree Lending typically processed 100 to 125 mortgages annually, its usual practice was to sell these mortgages on the secondary market after closing. Judge Clark’s decision was issued after a four-hour hearing held in Tallahassee on June 10th.
