Advanced Financial Services, Larry W. Tyler, et al.

On February 21, 2002, the SEC obtained a preliminary injunction and asset freeze against Larry W. Tyler and his company, Advanced Financial Services, Inc. (AFS). The SEC alleged that since May 1998, the defendants raised at least $30 million by fraudulently enticing more than 480 mostly elderly investors into purchasing AFS-issued investments backed by viatical settlements, which are interests in the death benefits of insurance policies insuring the lives of terminally ill persons.

Since viaticals are, by definition, illiquid investments with no fixed maturity dates and uncertain rates of return, the SEC alleged that Tyler deceived investors with false guarantees about the AFS investment's liquidity, above-market interest rates, and "fixed" maturity dates. The SEC also alleged that Tyler personally reaped over $5.2 million in undisclosed commissions from the fraudulent scheme. Two weeks before the SEC filed its action, Tyler and AFS filed for bankruptcy. For more information about the SEC's action, you can read litigation release 17376 (Feb. 25, 2002).

The Court also appointed Michael J. Quilling as Receiver. To date, AFS investors whose money was sent to Trade Partners have received 26.96% of their investment back and it is expected they will receive one more distribution. In addition, all AFS investors with approved claims will receive a distribution from the AFS Receivership Estate. At this time, it is not clear when these two distributions will occur. For more information, please visit the Receiver's website.

http://www.sec.gov/divisions/enforce/claims/afs.htm