Attorney General Salazar Announces $1.6 Million Judgment Against Defendants in Estate Planning Scheme Targeting Hundreds of Elderly Victims

Denver-- Attorney General Ken Salazar announced today that an El Paso County District Court judge has ordered payment of over $1.67 million in damages and penalties against Colorado Springs attorney Robert Mason and his associate, Harry Hochstetler. The order was given in a consumer protection lawsuit brought by the Attorney General challenging an estate planning scheme promoted by Mason, Hochstetler, and a third defendant, Claude Ray Page (State of Colorado, ex rel. Ken Salazar v. Robert Mason, et al., 01 CV 3219, El Paso County District Court).

Attorney General Salazar praised the Court's action. "This large damages and penalties verdict should send a loud message to those who want to prey on our elderly," Attorney General Salazar said. “Seniors have a great deal of anxiety and uncertainty about providing for family or for themselves late in life. These defendants took advantage of those fears and created a completely false hope that these victims could use the defendants’ estate plan to shield their assets and qualify them for Medicaid payment of nursing home care expenses."

At the conclusion of a three-day trial in August 2003, Judge Timothy J. Simmons ruled that Mason and Hochstetler had violated the Colorado Consumer Protection Act and were liable for damages, penalties and attorney fees. Judge Simmons issued an Order dated February 4, 2004 setting forth the damages and penalties against Mason and Hochstetler. The order followed a damages hearing on January 16.

Damages and Penalties Against Defendant Robert Mason:

The Court awarded damages to 334 victims of Mason’s estate planning scheme. In assessing damages, the Court relied on the fact that the average consumer paid $2,000 for Mason’s estate planning program. Thus, the Court awarded damages payable by Mason to the victims in the total amount of $668,000.

The Court then assessed $962,000 in civil penalties against defendant Robert Mason -- $3,000 per consumer complaints for those 294 victims over 60 years of age, and $2,000 per complaint for the remaining 40 victims.

Damages and Penalties Against Defendant Harry Hochstetler:

Defendant Hochstetler was fined $24,000 for his lesser role in the scheme. Hochstetler was also ordered to pay $24,000 in damages, the amount the Court determined he was unjustly enriched by the scheme.

Consent Judgment Against Defendant Claude Ray Page:

The third defendant, Claude Ray Page, another Mason associate, confessed liability prior to the beginning of the liability trial last August. Page stipulated to an award of $1 million in damages and $400,000 in civil penalties on the eve of trial.

Yesterday’s Order brought the total damages and fines assessed against the three defendants in this case to $3,078,000.

Attorney General Salazar brought the fraud case against the defendants in November 2001. The complaint alleged that the defendants targeted older Coloradans through direct mail and newspaper advertisements, inviting them to "free" seminars on estate planning. At the seminars, the defendants marketed their "family asset protection" plans, claiming that their plans would qualify purchasers for Medicaid while still allowing them to keep their assets free from income eligibility reviews and limits. The complaint alleged that these claims were entirely false, the defendants knew their claims were false, and that the estate plans accomplished little of what defendants promised to their numerous elderly clients. The defendants charged consumers between $1,500 and $3,000 for the defective estate plans.

The activities of the defendants were brought to the attention of the Attorney General's Office through inquiries and investigative assistance from several district attorneys' offices and other law enforcement and other government agencies.

The Attorney General's Office was also awarded its attorney fees and costs, to be determined in the near future.