When it came to light Prudential Financial was essentially making profits off of the money owed to the families of fallen soldiers, the Department of Veterans Affairs (VA) was seemed shocked. Shocked that Prudential would keep life insurance payments owed to those families in their corporate accounts and that they refused to issue the lump sum payouts to family members as required by contract. What the VA failed to mention, however, was their agreement with Prudential allowing Prudential to do this very thing.
The VA’s secret agreement affects the lives of 6,000,000 soldiers and their families. The VA had a signed contract and an oral agreement with Prudential in which the VA authorized Prudential to utilize retained-asset accounts. These accounts held lump-sum payments from life insurance payouts intended for families of fallen soldiers.
Prudential did not disburse those lump-sum payouts, however, they issued checkbooks. Those checkbooks worked like IOUs against the account as opposed to drafts. Prudential kept the money in their corporate accounts, which they used for investments, and retained the investment income for itself. This has been happening since 1999.
The VA’s authorization for Prudential to operate like this was finally put in writing in 2009 with an amendment to their original contract. For those 10 years, Prudential’s actions could be considered a breach of contract to the survivors of fallen service members. For those 10 years Prudential was violating the terms of their original contract with the VA. For 10 years the VA allowed Prudential to disregard their contractual obligation to furnish survivors with lump-sum payouts.
Multiple investigations have been opened into Prudential’s practices, including one by the VA itself. As of the end of June, Prudential had approximately $662,000,000 of survivors’ money in their corporate account.
If you are a disabled veteran who has been denied disability compensation or have not yet applied for benefits from the VA, contact LaVan & Neidenberg. You may be entitled to certain programs and benefits so contact our veterans disability rights firm today.