FILED FEB 27 2008 REPRESENTING: ALEX SINK CHIEF FINANCIAL OFFICER STATE OF FLORIDA IN THE MATTER OF: STEPHEN SEEFELD CASE NO. 93609-08-AG ADMINISTRATIVE COMPLAINT TO: STEPHEN SEEFELD 165 Beacon Lane Jupiter, Florida 33469 STEPHEN SEEFELD 11770 US HY 1, Ste. 206 Palm Beach Gardens, Florida 33408 STEPHEN SEEFELD 169 Tequesta Drive, Ste. E Tequesta, Florida 33469 You, STEPHEN SEEFELD, are hereby notified that pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida, has caused to be made an investigation of your activities while licensed as an insurance agent in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. You, STEPHEN SEEFELD, are currently licensed in the state as a life, including variable annuity insurance agent and life, including variable annuity and health insurance agent. 2. At all time pertinent to the dates and occurrences referred to in this Administrative Complaint you, STEPHEN SEEFELD, were licensed as an insurance agent in this state. 3. At all times pertinent to the dates and occurrences referred to in this Administrative Complaint, you, STEPHEN SEEFELD, were a managing partner of LS Funding, LLC., a now revoked Nevada limited liability corporation doing business in Florida. COUNT I 4. Paragraphs one through three are realleged and incorporated herein by reference. 5. On or about May 30, 2006, LS Funding, LLC, through Ryan Benjamin Wexler, a licensed insurance agent, did personally solicit Mr. and Mrs. H.G. of Boynton Beach, Florida (and New Rochelle, New York) to enter into a life settlement contract, more particularly known as stranger-owned life insurance or SOLI, with LS Funding, LLC. 6. In this transaction, LS Funding, LLC procured a $10,000,000.00 life insurance policy with Mrs. H.G., insured, to be issued by Jefferson Pilot Life Insurance Company. You, STEPHEN SEEFELD, signed as the agent of record for this policy. LS Funding, LLC set up the Delaware Gillete Trust to be the owner and beneficiary of the policy, with the insurance policy as its sole trust asset. 7. The sole purpose of this trust was to conceal the identity of the true owners and beneficiaries of the policy from the insurance company. 8. Mr. and Mrs. H.G. were then made owners of the trust. Mr. and Mrs. H.G. made the first premium payment of $54,000.00 on the $10,000,000.00 life insurance policy. 9. LS Funding then located and procured a third party purchaser who agreed to purchase the Delaware Gillete Trust for $356,100.00. The third party purchaser, through purchase of the trust, would then become the owner and beneficiary of the $10,000,000.00 life insurance policy insuring the life of Mrs. H.G. 10. The sole purpose of this trust was to conceal from the insurance company the fact that the trust asset, i.e. the insurance policy, had been sold to a third party. 11. It is the corporate policy of Jefferson Pilot Life Insurance Company not to accept insurance applications for life insurance sold through stranger-owned life insurance transactions. You, STEPHEN SEEFELD, were aware of or should have been aware of this fact. 12. The Jefferson Pilot application solicited by Ryan Benjamin Wexler, and signed and submitted by you, STEPHEN SEEFELD as agent of record, asks in question #63, “Have you been involved in any discussion about the possible sale or assignment of this policy to a life settlement, viatical or other secondary market provider?” This question is answered ‘NO”. This response is false and a material misstatement of fact. You, STEPHEN SEEFELD, were fully aware at all times that this was a false statement. 10. - Your representations to Jefferson Pilot Life Insurance Company were false and a material misstatement of fact. These misrepresentations were made solely to conceal from Jefferson Pilot Lite Insurance that this was a life settlement or stranger-owned life insurance transaction. Jefferson Pilot Life Insurance would not have knowingly issued the life insurance policy except for your misleading and deceptive representations and omissions. 11. The Jefferson Pilot Life insurance policy was issued. However, Mr. and Mrs. H.G. refused to go forward with the transaction and the sale of the life insurance policy to the third party. Rather, they elected to cancel the policy and obtain a refund of their $54,000 initial premium. Asa result, LS Funding has filed a civil action against Mr. and Mrs. H.G. for breach of contract and damages. IT IS THEREFORE CHARGED that you, STEPHEN SEEFELD, have violated or are accountable under provisions of one or more of the following: the Florida Statutes or the Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: (a) Willful misrepresentation of any insurance policy or willful deception with regard to such policy, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes] (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (c) Willful failure to comply with or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (d) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter. [Section 626.621(6), Florida Statutes]; (e) Knowingly making, issuing, circviating, or cansing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which: 1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a)1, Florida Statutes} () Knowingly: a. Filing with any supervisory or other public official, Ss . Making, publishing, disseminating, circulating, c. Delivering to any person, d. Placing before the public, e. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement. [Section 626.9541(1)(e) 1, Florida Statutes] (g) Knowingly: Making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from an insurer, agent, broker or individual. [Section 626.9541(1)(k), Florida Statutes. WHEREFORE, you, STEPHEN SEEFELD, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses and appointments as an insurance agent or to impose such penalties as may be provided under the provisions of Sections 626.611, 626.621, 626.681, 626.691, and 626.9521, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department of Financial Services ("Department") pursuant to Sections 120.569 and 120.57, Florida Statutes, and Rule 28-106, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel acting as Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN AND AN ORDER OF SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-106.2015, Florida Administrative Code. As noted above, completion of. the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name, address, and telephone number, and facsimile number (if any) of the respondent (for the purpose of requesting a hearing in this matter, you are the "respondent"). (b) The name, address, telephone number, facsimile number of the attorney or qualified representative of the respondent (if any) upon whom service of pleadings and other papers shall be made. (c) A statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate. (d) A statement of when the respondent received notice of the administrative complaint. | (e) A statement including the file number to the administrative complaint. Ifa hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. Ifa proceeding is requested and there is no dispute of material fact, the provisions of Section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written'statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Florida, or by telephonic conference call upon your request. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. These proceedings are held before a State Administrative Law Judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department. qh DATED and SIGNED this 27 dayof Felbbruga. Ly __, 2008. IN CHANDLER Deputy Chief Financial Officer CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished by Certified Mail to STEPHEN SEEFELD 165 Beacon Lane, Jupiter, Florida 33469 and 11770 US HY 1, Ste. 206 Palm Beach Gardens, Florida 33408 and 169 Tequesta Drive, Ste. E, Tequesta, Florida 33469 2% day of. February , 2008. JAMES A. BOSSART, ESQUIRE Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4124 Mar. 1? 2008 12:04PM YOUR LOGO : DEPT OF FINANCIAL SERVICES YOUR FAX NO. : 85a4874987 NO. OTHER FACSIMILE START TIME USAGE TIME MODE PAGES RESULT 61 617724024589 Mar. 1? 12:41PM 3°33 SND 11 OK TO TURN OFF REPORT, PRESS *MENU’ Had. THEN SELECT OFF BY USING *+’ OR ’*-’. FOR FAX ADVANTAGE ASSISTANCE, PLEASE CALL 1~GQ@-HELP-FAX (435-7329).

Docket for Case No: 08-001459PL