Fleshy, dark-haired, stuttering Paul Noe II sits at a document-laden table with an elderly veteran. Noe asks the man about his military years, about what life has been like since, and offers a patient, sympathetic ear.
Noe is doing what he has long done best: persuading a senior to enter into a financial transaction he doesn't fully understand, one that stretches what the law allows, and one that stands to benefit Noe or his business associates in ways his new friend isn't fully aware of.
Noe is a convicted con man who has been investigated and sanctioned by the California Department of Insurance and sued by the California Attorney General. Yet he is still involved in business dealings that at the very least seem to invite greater scrutiny. Indeed, Noe's career reads to me like a road map through ways in which state regulatory and law enforcement agencies have failed to protect seniors from becoming financial prey.
In 1989, Noe was convicted of five felony counts of aiding and abetting wire fraud in connection with an insurance scam involving his uncle Clifford. (During the 1960s and '70s, Clifford and the father of Paul Noe were among the world's most famous con men.)
In the early 2000s, Paul Noe was in a type of business known as "trust mills," setting up living trusts ["Son of Super Swindler," Matt Smith, Feature, 9/10/03]. When I reminded him last week of this history, he boasted: "You talk about a scheme. People were indicted in the living trust business. But when I was in the living trust business, I was never indicted for anything."
Two years ago, then-state Attorney General Jerry Brown sued Noe and his business partner, Mitchell Roth, for operating what Brown called an "elaborate foreclosure rescue fraud scheme." The state settled for $1 million from Roth. ["Facing Foreclosure? Con Man Paul Noe II Has a Deal for You," Matt Smith, Column, 9/24/08]. "They dropped the suit against me," Noe bragged.
Now, Noe is back in action. His new venture, which he says he works on with his brother Sinclair, is called NSA Educational Academy. It involves helping veterans present themselves as more disabled and impoverished than they really are to qualify for federal "aid and attendance" pensions. A sister company, run by Sinclair, is called Financial Review Insurance Services. NSA Educational Academy's website, www.nsaea.org, is registered in the name of Paul Noe. It says the Academy is part of the "National Strategic Alliance of companies," which also offers "investment options."
The evidence suggests that Noe has entered yet another line of business rife with shady operators. In fact, the California Senate just unanimously passed a bill that would prevent such consultants from charging unreasonable fees.
"This has to do with financial predators," says Andrew Lamar, spokesman for state Senate Majority Leader Ellen Corbett (D-San Leandro), who sponsored the bill. "They target veterans who have plenty of wealth but want to qualify for pensions and other programs that stipulate a certain low wealth standard to qualify."
According to San Francisco elder rights attorney Prescott Cole, the payoff comes when veterans, grateful for this service, are induced to buy insurance-based products they may not need.
The problem with such wholesale diversion of benefits is that when federal money runs out, truly poor and disabled veterans lose.
After a few minutes chatting with a potential veteran recruit, Noe directs the subject to health. He markets himself as an expert in the Veterans Administration's "aid and attendance" benefit, federal cash intended in part to help elderly ex-soldiers make up for nonreimbursed medical expenses, such as having a personal attendant help bathe or feed them.
According to a source who declined to be identified, a veteran insisted to Noe over and over again that he had no trouble bathing, grooming, or cleaning under his nails. But Noe instructed the man that the mere fact he'd visited a podiatrist was evidence that he couldn't take care of himself.
Another key to Noe's helping healthy veterans qualify for this benefit program is what he calls a "loophole" he discovered that allows veterans to seemingly conjure unreimbursed medical expenses from thin air. It works like this: Noe advises clients to set up a contract with a close relative to be a "caregiver" for, say, $900 per month, thus creating the appearance, on paper at least, of poverty.
But Noe tells clients they should set this up as deferred compensation so they don't actually have to make monthly payments. This way the caregiver relative "doesn't have to declare it on his taxes," Noe told one veteran.
Noe advises veterans to buy a template caregiver agreement form — stationery worth a few dollars — from www.discountlegaldoc.com, a domain registered by Noe. The price: a whopping $399. "That thing gets rid of the income," Noe told another veteran.
The end game comes once the veteran receives his first check, which can include retroactive benefits of $15,000 or more. Around that time, the veteran might get a call from an insurance sales rep associated with the National Strategic Alliance, offering high-dollar annuities and other financial products.
"The pitch to me doesn't make sense to me from an elder-law perspective, or as an attorney who practices in the field of veterans' benefits," says Santa Barbara elder law attorney Dallas Atkins.
Orange County estate planning attorney Tom McKenzie says the idea of a deferred caretaker agreement raises red flags. "If the parties are not living up to the requirements of the agreement, and they're using the agreement to gain public benefits, there's a problem," he says.
In my June 22 interview with Noe, he said any such agreement would merely be "an arrangement between the two parties" that didn't reflect on him. As for potential IRS issues, "I'm not giving tax advice in any way, shape, or form." Additionally, investment opportunities Sinclair might set up for veterans "are much better than the investments that are offered by the Wall Street bankers that fleeced the country."
In fact, by mere dint of writing about Noe, I am the one who should be considered guilty of a crime, he suggested. "Anything that takes away from helping the veteran, or scares the veteran from what they deserve, is pretty close to treason," he said.
I'll hand this to him: Paul Noe is really good at what he does. That's more than I can say for regulators charged with protecting the elderly.