To promote their business on the national stage, a Boca Raton insurance company teamed up with an IndyCar racing powerhouse owned by retired late night television host David Letterman.
With its company logo emblazoned on race cars and drivers’ uniforms, Seeman Holtz celebrated its relationship with the team that competed on tracks across the country, including at the famed Indianapolis 500.
“We are excited to partner with Rahal Letterman Lanigan Racing to continue to expand our business, raise awareness of our services and deliver on consumer-focused strategies,” Marshal Seeman, president of Seeman Holtz, said in 2018 announcing the partnership.
But, two years later, the happy union ended with a messy divorce.
The team, owned by Letterman, renowned IndyCar driver Bobby Rahal and motor sports fan Michael Lanigan, sued, claiming Seeman Holtz reneged on its promise to pay $500,000 to sponsor the 2019 racing series.
The lawsuit, filed in 2020, is among many the firm has faced in the past year. In suits filed in federal court in West Palm Beach and Palm Beach County Circuit Court, the firm has been accused of bilking senior citizens, fellow insurance companies and even an employee.
The firm’s legal woes exploded into public view last week when 55-year-old Eric Holtz, who co-founded the firm with his college friend, committed suicide in California, according to company officials.
Citing privacy concerns, the company declined to release further details about Holtz’s death, including a precise location. But, it insisted, Holtz’s death had nothing to do with the firm’s mounting legal troubles.
Attorneys who are representing more than 75 retirees who fear the firm made off with their life savings said the suits are emblematic of an operation that expanded too quickly and then made a desperate dash to raise money.
“They were expanding like crazy,” said attorney James Sallah, who is representing seniors who invested more than $50 million and are still waiting to be paid. “We’ve seen this with other companies. You expand so rapidly, thinking the revenue from the expansion is going to cover the debt.”
When it doesn’t, companies find other ways to stay afloat.
In the case of Seeman Holtz, which snapped up more than a dozen mom-and-pop insurance agencies across the country in recent years, it appears they opted to generate cash by raising money through the investment scheme, he said.
Senior citizens were told their investments were backed by life insurance policies. However, the title company that was to hold the policies and serve as collateral agent was defunct, lawsuits claim.
Further, Sallah said, the strategy, while lucrative, is a risky one.
“When you start doing that, you’re doubling down,” Sallah said.
While the company got the investors’ money, it also agreed to pay them at least 8% monthly interest and then return the principal when the notes matured in several years.
“You’re going into a deeper hole,” he said.
Investors, however, have a less charitable view of why Seeman and Holtz formed a series of companies, took retirees’ money and then failed to repay them.
They point to Seeman’s $8.5 million house in Boca’s wealthy Royal Palm Yacht and Country Club development and Holtz’s home in Sea Ranch Lakes near Pompano Beach, which is valued at more than $2 million.
“They were living a lavish lifestyle and hoodwinking all of these senior citizens out of their money and had no empathy about what they were doing to these people,” said Diane Wohlwend, whose late father and 84-year-old stepmother invested $250,000.
Seniors borrow to end up losing their nest eggs
The recent spate of suits isn’t the first time the company has been accused of mishandling money it received from senior citizens.
In 2010, an elderly Ohio couple who wintered on Florida’s Gulf Coast sued Seeman Holtz, claiming they were pressured into paying roughly $240,000 for two life insurance policies, according to a suit filed in federal court.
Company officials assured them they could resell the policies in two years and “make a killing,” the suit says.
Instead, because company officials lied on documents they prepared for the couple, the $1.5 million life insurance policies were worthless, the suit claims. While the firm made a tidy commission, the couple, who borrowed money from their son to buy one of the policies, lost their retirement nest egg, it says.
In the lawsuit, attorney Marc Wites said his clients weren’t the only elderly couple to get lured into the life insurance policy purchase scheme. Many were reeled in after attending one of the hundreds of seminars Holtz and other firm executives conducted across the country, he said.
“Seeman Holtz, at the direction of Marshall Seeman and Eric Holtz, orchestrated the purchase and subsequent resale of many insurance policies,” Wites wrote. Many were bought by unsuspecting or naive senior citizens, he said.
Attorney Scott Orth, who represents the company, didn’t return a phone call or email for comment. But in court papers, he denied the allegations. He pointed out that even if the claims were true, the couple was part of the fraud because they signed the phony documents.
Ultimately, the lawsuit was resolved out of court.
Ex-employee wants $1.3 million in commissions
The firm took the same tack last year when it was sued by a former employee, who claimed it owed him $1.3 million in commissions.
Paul Kapela, who had been a regional director at Seeman Holtz, said he repeatedly asked Holtz to pay him the money he was owed, according to a suit filed in circuit court.
In November 2019, Holtz left Kapela a voice message, saying the firm didn’t have the cash, the suit says.
“I’m not going to be able to get you paid tomorrow,” Holtz said, according to a transcript of the message. “Um, we’ve tried to get money moved from Seeman Holtz Property and Casualty over, um, weren’t able to do that.”
After Kapela balked that he wasn’t going to work for free, he was “constructively discharged,” he said in the suit he filed for lost wages. The suit was settled in December — three months after it was filed.
Smaller insurers from across the country sue
But while those suits were resolved, more popped up.
In addition to the lawsuits filed on behalf of senior citizens who claim they were bilked in the investment scheme, the owners of two insurance companies sued Seeman Holtz, alleging it didn’t honor purchase agreements.
Tom Schwarz said Seeman Holtz in 2018 agreed to pay $16 million for the agency he owns in Wisconsin with his sister, according to the lawsuit filed in federal court this month.
While it paid $7.5 million initially and made subsequent payments, Schwarz said he is still owed $1.3 million, the suit says.
A Missouri couple is making similar claims.
Steven and Nicole Philips said Seeman Holtz in 2018 agreed to pay $2.5 million for an agency the couple owns in Missouri. However, after receiving a check for $2.25 million, the payments stopped, according to another lawsuit filed in U.S. District Court this month.
In addition to owing the couple $250,000, Seeman Holtz also didn’t honor its promise to pay the operating expenses and salaries of those working at the agency’s three locations, forcing the Philipses to do so. They are asking to be reimbursed for those expenses as well.
The recent lawsuits come as senior citizens for months have been inundating Holtz with questions about when they will get their investments back.
Unsophisticated investors, heartbreaking stories
Ralph Blythe, a 90-year-old resident of The Villages, is typical. He sent numerous emails to Holtz, demanding the return of the nearly $214,000 he invested.
In March, he told Holtz he desperately needed the money.
“This past week, I received another dose of Life’s wakeup calls,” Blythe wrote. “I had an aneurysm bypass surgery, along with a few days in an intensive care unit. I had plenty of opportunities to think of my plight — How will I pay for any segment of that operation that insurance will not cover?”
Attorney Scott Silver, who is also representing those who thought they were investing in life insurance policies, said Blythe’s predicament isn’t unusual. Many of the stories he’s heard from investors are heartbreaking.
Seeman Holtz dispatched salespeople to retiree-rich areas such as The Villages, southern Palm Beach County, Naples and communities in Southern California.
In The Villages, a sprawling retirement community in the central part of Florida, retirees would invite a salesman into their home and talk to them over coffee, Silver said.
When the senior citizens would question the wisdom of the investment, the salesman would hand them a list of 10 others who had signed up.
Thinking they were doing their due diligence, they called the early investors, who told them they were receiving 8% interest checks each month as promised.
“So you had all these unsophisticated investors confirming to each other that the money was coming in,” Silver said.
Then, the payments stopped.
A company spokesman said the claims have nothing to do with Seeman Holtz. The investments were made with independent companies formed by Seeman and Holtz.
As anxiety among the elderly investors mounted, Seeman Holtz was facing other lawsuits, such as the one filed by Letterman’s racing team.
But, like it did with the retirees, it strung the racing team along, according to the lawsuit.
In emails to retirees, Holtz blamed the company’s failure to return investors’ principal or make interest payments on “liquidity” issues. An infusion of cash was expected soon, Holtz told retirees for months.
When communicating with the racing team, Seeman Holtz officials said the six-month delay in the $500,000 payment was the result of “a banking problem,” according to the lawsuit.
But attorney Orth said Seeman Holtz never agreed to sponsor the team for the 2019 season.
“Despite the lengths to which RLL tries to spin this matter, it is a tale of incomplete negotiations, uninvited invoices,” he wrote in answer to the lawsuit.
While emails were exchanged and Seeman Holtz executives attended some of the 2019 races, there was no sponsorship agreement, Orth said. The relationship ended in 2018, he insisted.
The racing team points to a 2019 contract and dozens of emails that were exchanged about the debt. But, Orth said, the “draft agreement was never signed by anyone for or on behalf of (Seeman Holtz).”
The federal lawsuit was settled for undisclosed terms in November. But, according to the lawsuit, the delay took its toll.
The team “suffered substantial monetary damages as a result of Seeman’s wrongful conduct,” attorney Peter Yanowitch wrote in the suit.
It takes millions to operate an IndyCar racing team, and Letterman and his partners were depending on Seeman Holtz to help it pay its myriad expenses, he said.
The team paid to put Seeman Holtz’s logo on the race car, transporter, equipment and uniforms worn by the crew and two-time Indianapolis 500 champion Takuma Sato. The logos, seen by motor sports lovers throughout the globe, were a boon to Seeman Holtz, the suit says.
Seeman Holtz was also allowed to use the association with the team in its own promotional materials. Company executives, including Holtz and Seeman and their families, were given passes to VIP areas at races and were allowed get behind-the-scenes looks at the death-defying sport.
“Seeman’s ‘family of companies’ simply decided to take advantage of and illicitly abscond with all the RLL sponsorship benefits — both from a personal and professional standpoint — without paying for them,” Yanowitch wrote. “Seeman did not abide by its agreement with RLL — not one bit.”