Fla. AG Sues Over Sale of Phony Insurance Bonds

April 11, 2005

Florida Attorney General Charlie Crist has sued a State of Washington-based organization and its owner for selling fraudulent bonds that purported to eliminate the need for standard insurance coverage, a false claim that cost more than 400 Florida victims at least $127,000.

The Global Healings Society is reportedly not licensed to do business in Florida, nor is it an authorized insurer in the state, and a state agency has determined that its bonds do not satisfy legal requirements for insurance.

The Attorney General’s lawsuit alleges that Global Healings Society sold what it claimed were “financial bonds” over the Internet. Joseph Michael Gardinier, owner and caretaker of the society, reportedly directs its activities and is responsible for the various bond programs sponsored by Global Healings.

The bonds purport to protect the bearers from financial responsibility in the event of any incident that would warrant an insurance claim, but the lawsuit says the bonds are fraudulent because they are not valid to provide coverage. Types of bonds offered by Global Healings include an auto bond, a health bond, a home equity bond, a student bond, a “Benefit for Life” bond and a community financial bond.

After the Florida Department of Highway Safety and Motor Vehicles determined that the auto bond card was not valid to prove insurance coverage as required by law, Gardinier conducted a series of conference calls to members of the organization soliciting donations to cover the cost of suing the State of Florida. Gardinier claimed that his organization had already raised $10 million and hired a team of 200 lawyers who collectively had not lost a case in 46 years, but asserted that the financial support of individual consumers was necessary to ensure a victory against the state. Similar claims were reportedly made in Montana and Washington, where Global Healings has already been prohibited from conducting business.

“This organization is simply riddled with fraud of all types,” said Crist. “Not only are consumers being defrauded out of money for worthless bonds, but others are being placed at risk when they face injury brought on by someone without valid insurance coverage. The claims of litigation against the state are also cause for concern because consumers stand to lose even more money to support an action that has no legitimacy.”

The case will be litigated by the Attorney General’s Economic Crimes Unit. The State will seek damages including consumer restitution, costs for insurance claims made on the worthless bonds, litigation fees and costs and punitive damages.

Gardinier faces possible penalties of up to $4.25 million, plus restitution. In conjunction with the civil action filed by the Attorney General’s Office, the Department of Financial Services has issued a cease and desist order against the organization, effective immediately.

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