Corporate Trustee Accused of Misappropriating $100M in SNTs

Special Needs Answers Legal Update.The founders of the Center for Special Needs Trust Administration, a nonprofit special needs trust fund company based in Florida, is facing a $100 million class action lawsuit, filed earlier this week.

Families are suing the Center’s founders, Leo J. Govoni and John W. Staunton, along with numerous banks and other corporate entities, alleging that they misappropriated more than $100 million in special needs trust (SNT) assets between 2009 and 2020. The Center, whose mission had been to serve as a court-appointed corporate trustee for individual and pooled SNTs, recently filed for bankruptcy. According to court documents, more than 1,500 of its client accounts have now been found to be missing or empty of funds.

Todd and Kelli Chamberlin filed the suit by and through their child, Clark. Mr. and Mrs. Chamberlin are the grantors of a special needs trust benefiting Clark. The Chamberlains set up the court-approved trust with settlement funds they received in a medical malpractice suit after Clark had undergone several brain injuries and become permanently disabled.

The defendants are accused of transferring millions of dollars from the Center’s SNT accounts to pay illicit loans to various companies, including one Govoni owns. The Center claims it does not have any records of the loan documents or board approvals for the loans, and states that it had not discovered the missing funds until 2022. It did not notify its clients about these unauthorized loans or missing funds prior to filing for bankruptcy.

“The Center now blames everyone but itself and its current directors for the massive, unmitigated misappropriation of SNT assets,” states the suit, in which the plaintiffs demand a jury trial.

Read the 58-page class action complaint in full.