Joshua L. Gottlieb, a former securities broker barred by the Financial Industry Regulatory Authority in 2017, faces a lawsuit from a client who alleges he suffered a "devastating" financial loss after buying a recommended life insurance program that was meant to secure a comfortable retirement and provide $12 million for his heirs.
Oregon resident Scott Alldridge and his Alldridge Family Holdings LLC filed a complaint Tuesday in U.S. District Court in Oregon against Ohio resident and insurance broker Gottlieb and two firms he leads, The Gottlieb Organization and Management Solutions LLC.
Alldridge alleges breach of fiduciary duty, negligent misrepresentation, negligence and unjust enrichment in connection with Gottlieb's marketing, sale and management of a defective premium-financed indexed universal life insurance, or IUL, program.
Broker's 'Dire' Financial Condition
Among other points, Alldridge alleges Gottlieb and his firms were in "dire" financial straits and failed to make several annual premium payments, depleting the life insurance policy's cash value and causing the lending bank to foreclose on it.
He also contends he lost over $1.2 million he paid into the program and missed an opportunity to invest in a record-breaking market.
Gottlieb, a "self-proclaimed life insurance expert with complex strategies" to maximize client portfolios, met Alldridge in 2015 and promised he could easily generate substantial retirement income for the client and comfortably provide for his heirs, the lawsuit says.
Gottlieb advised Alldridge he had developed a plan to eventually yield $250,000 in annual retirement income and over $10 million in death benefits, and assured the client he'd need to invest no more than $50,000 a year, the complaint alleges.
Gottlieb also assured that he and his firms would find the lender and secure loans to finance the premiums, ensure the premiums were paid on time and actively manage the policy to make sure the strategy was working as promised, the lawsuit alleges.
Alldridge committed to Gottlieb's plan, paying more than $821,000 over eight years, borrowing nearly $2 million in premium financing and pledging collateral to fund the investment plan and buy an IUL policy with an initial $12 million death benefit, the complaint alleges.
Unbeknownst to Alldridge, the defendants in the case "were in dire financial circumstances at the time of these recommendations and in desperate need of the commissions from the policy," the suit alleges.
"Defendants actively led (Alldridge) to believe they were still actively managing the plan for several years and addressing any issues that arose.
"Indeed, from 2015 and into 2024, Defendants repeatedly and unequivocally advised (Alldridge) that premium financing was being secured, premiums were being paid, their investment plan was 'working,' and there was absolutely no reason for concern," the lawsuit states.
Unpaid Premiums, Foreclosed Policy
Alldridge learned in late 2023, however, that Gottlieb and the firms failed to arrange for or make the $600,000 annual premium payments on several occasions, "depleting the cash value of the policy, and causing a default of collateral requirements with the premium lending bank," the lawsuit contends.
As a result, the bank foreclosed on the policy and surrendered it around June 30, 2023, unbeknownst to Alldridge, according to the complaint, which alleges the cash value was used to pay off the loan used to secure the premium financing.
"The financial consequences of (Gottlieb's and the firms') unlawful acts and omissions have been nothing short of devastating. The policy is gone and was foreclosed on by the bank that provided the premium financing loan," the suit contends.
