TUCSON (KVOA) — It took years of blood, sweat and tears for Cindy Bryant to build her retirement account. However, a simple signature is enough to lose everything.
Bryant said she lost $95,000 due to an investment in Deeproot Funds, which the Securities and Exchange Commission charges in a federal lawsuit with being a Ponzi scheme.
“I feel sick,” Bryant said. “It’s hard to sleep at night.”
The SEC says the fund and its lead member, San Antonio, Texas attorney Robert Mueller, used about $58 million in investor funds for personal gain by using it “as his personal piggy bank.” .
News 4 Tucson investigators found no record of Deeproot or Mueller being criminally charged based on the allegations.
N4T investigators found documents filed with the court for the Western U.S. District of Texas showing Deeproot filed for Chapter 7 bankruptcy, which could be bad news for investors like Bryant.
“I’ve been told many times, now it’s a lost cause,” Bryant said. “I will never see that $95,000 again.”
Bryant said she trusted Tucson financial adviser Pamela Hopman of PGH Advisors and the Hopman Group with her money. She said it was Hopman who invested her money in Deeproot in 2019.
Bryant said she thinks Hopman should have done better research on investing.
Bryant has yet to file a lawsuit against Hopman. She shared a letter with N4T investigators from Hopman’s attorneys saying that Hopman herself lost a significant amount of money to Deeproot. The letter urged Bryant to join them in suing Deeproot, instead of suing Hopman.
In the letter, they said “even assuming you sue and win, it would be difficult to get judgment against Hopman or PGH.”
News 4 Tucson chief investigative reporter Chorus Nylander called a number listed on the Hopman Group’s website. A woman who identified herself as Pamela Hopman answered the phone.
Asked about the allegations against her, she declined to comment saying it was a In progress investigation.
N4T investigators sent Hopman an email again offering the opportunity to comment, we received no response.
Bryant is not alone. N4T investigators uncovered multiple lawsuits filed against Hopman and PGH Advisors related to Deeproot.
We spoke with Phoenix-area attorneys Gail Boliver and Anthony Bingham, who jointly represent a Tucson family suing Hopman for investing their money in Deeproot.
“When I first saw this, I was like why would you ever touch this product,” Boliver said.
According to their lawsuit, the plaintiffs claim they were asked to invest $100,000 in Deeproot by a financial advisor supervised by Pamela Hopman.
“You have a fiduciary duty to your clients, one of those duties is to perform due diligence on investments,” Bingham added.
Deeproot was in the business of buying life insurance viatics, i.e. when someone buys someone else’s life insurance policy and when the policyholder dies they receive the death benefit.
“And if your company, [in this case] Deeprootbuys the policy, they have to pay the premiums,” Boliver explained.
Which is a risky investment if the the insured lives a long time. According to the SEC lawsuit, Deeproot hadn’t bought a policy since September 2017, but continued to raise about $43 million afterward, which a financial adviser might have noticed.
“Any financial adviser doing their due diligence would have caught those red flags,” said New York attorney Marc Fitapelli of the MDF law firm.
Fitapelli represents several clients nationwide who have invested in Deeproot. He said he had cases against four different small financial advisory firms, including five clients suing Hopman. He said collectively the customers had lost about $1 million. He agrees with Bingham and Boliver that Hopman had a fiduciary responsibility to his clients that was breached.
“Those little breadcrumbs, all those red flags were there,” Fitapelli noted.
If you have a story you would like us to investigate, email us at firstname.lastname@example.org or call our phone line at 520-955-4444.
If you have a story you would like us to investigate, email us at email@example.com or call our inquiry line at 520-955-4444.