SEC v. WE THE PEOPLE; and INC. OF THE UNITED STATES, No. 2:13-cv-14050, Southern District of Florida (Feb. 4, 2013)

1

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA

Case No. ____________-Civ
SECURITIES AND EXCHANGE COMMISSION,
    Plaintiff,
v.
WE THE PEOPLE, INC. OF THE UNITED STATES,
Defendant.

COMPLAINT

Plaintiff, United States Securities and Exchange Commission (“SEC”), states and alleges
as follows against Defendant We The People, Inc. of The United States (“We The People”):
SUMMARY OF THE CASE
1. We The People, a purported charitable organization based in Tallahassee, Florida,
defrauded investors by making false and misleading statements in connection with the offer, sale,
and purchase of securities.  Enticed by We The People’s scheme, investors transferred assets –
stocks, annuities, real estate,  or cash – to We The People in exchange for an investment product
that We The People called a “tax-deductible gift annuity” or “charitable gift annuity” (“CGA”).
From June 2008 through April 2012, We The People raised over $75 million in assets from
approximately 400 investors in over 30 states, almost all of whom are elderly.
2. We The People’s marketing and promotional materials for the CGA offering
contained misrepresentations and omissions of material fact, including:

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• false statements regarding the value of the CGA that investors received in exchange
for the assets transferred to We The People, falsely claiming that investors would
receive the full accumulated value of their investments;

• false statements regarding the safety and security of  the CGA program, falsely
claiming that We The People held in trust a reserve equal to 110% of its liabilities and
that it obtained reinsurance;

• omissions regarding the indictments and regulatory sanctions issued against two We
The People senior executives, Richard and Susan Olive, for fraudulently selling
similar products at a company known as National Foundation of America (“NFOA”);
and
• omissions regarding the sizable commissions We The People paid to third-party
promoters on the sale of its products, hiding that these commissions totaled several
million dollars.
We The People also made false public statements regarding the amount of charitable
contributions it made, significantly exaggerating those contributions.  By so acting, We The
People violated the anti-fraud provisions of federal securities laws and offered and sold securities
in violation of the registration provisions of the federal securities laws.
3. The SEC brings this civil enforcement action seeking permanent injunctions and
other appropriate relief, which may include disgorgement plus prejudgment and postjudgment
interest, for violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities
Act”) [15 U.S.C. §§ 77e(a), 77e(c), 77q(a)]; Section 10(b) of the Securities Exchange Act of
1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b) and 78o(a)]; and Rule 10b-5 [17 C.F.R. §240.10b-
5].
JURISDICTION AND VENUE
4. The Court has jurisdiction pursuant to Securities Act Sections 20(b) and 22(a) [15
U.S.C. §§ 77t(b) and 77v(a)], and Exchange Act Sections 21(d) and (e), and 27 [15 U.S.C. §§
78u(d) and (e) and 78aa].

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5. In connection with the acts described in this Complaint, Defendant used the mails,
other instruments of communication in interstate commerce, and means or instrumentalities of
interstate commerce.
6. Venue lies in this Court pursuant to Securities Act Section 22(a) [15 U.S.C. §
77v(a)], Exchange Act Section 27 [15 U.S.C. § 78aa], and 28 U.S.C. § 1391(b) (2).  Certain of
the acts and practices described in this Complaint occurred in the Southern District of Florida,
and certain investors in We The People reside in the Southern District of Florida.  Further,
Defendant has consented to venue in this Court.
DEFENDANT
7. We The People is a Massachusetts corporation registered under Section 501(c)(3)
of the Internal Revenue Code with its principal place of business at 2636 Mitcham Drive,
Tallahassee, Florida 32308.
FACTUAL BACKGROUND
I. The Olives Join We The People
8. We The People was founded in 1987 and originally operated as non-profit
organization that promoted nuclear safety.  However, from the late 1990s until 2008, We The
People was an entity that had no assets and limited operations.  We The People became
significantly more active in March 2008, when it hired Richard Olive and his wife Susan Olive
to raise money for We The People.
9. In March 2008, the Olives signed a joint employment agreement with We The
People.  Under the agreement, We The People agreed to pay the Olives commissions.
Originally, We The People agreed to pay the Olives a combined 1.5% commission.  In March
2009, We The People increased the combined percentage to 2.5%.   And in June 2009, the Olives

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started receiving a base salary as well as a combined .75% commission.  During their period of
employment, March 2008 to April 2012, the Olives were paid over $1.1 million in salary and
commissions.
10. At the time they were hired by We The People, the Olives were subject to
numerous adverse legal proceedings related to their previous business.  The Olives ran an
investment program at NFOA, a purported charity based in Tennessee, which involved having
elderly individuals transferring assets to NFOA (typically a commercial annuity) and, in
exchange for the transferred assets, NFOA would issue investors a product similar to We The
People’s CGAs.
11. By the time the Olives joined We The People, regulators in several states,
including, but not limited to, Alabama, California, Florida, Iowa, Tennessee, Texas, and
Washington had determined that NFOA’s products were not properly registered, or that NFOA
made misleading statements to investors in connection with the sale of the products.   For
example,
• In April 2007, the State of Florida determined that Richard Olive and Susan Olive
were engaged in unauthorized and illegal transactions through NFOA and presented
“an immediate danger to the public health, safety or welfare of Florida consumers.”

• In May 2007, the Texas State Securities Board issued a cease and desist order which
found that NFOA’s products were “securities” and that the securities were sold
illegally both because they were unregistered and because NFOA and Richard Olive
“intentionally” failed to disclose “material facts” in connection with the sales of those
securities.

• Also in May 2007, the State of Tennessee brought a civil suit against NFOA and the
Olives, among others, for selling products without the proper licenses and
registration.  Shortly thereafter, the court appointed a receiver to wind down NFOA’s
affairs.

12. The Olives’ conduct at NFOA also resulted in criminal charges.  In February
2010, while they were employed by We The People, a Tennessee grand jury indicted the Olives

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on multiple theft charges in connection with their sale of investment products at NFOA.   Then,
in March 2012, a federal grand jury in the Middle District of Tennessee indicted Richard Olive
on several fraud counts arising out of his actions at NFOA.
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II. We The People’s Offer and Sale of CGAs
13. After the Olives arrived at We The People, beginning on or about May 2008 and
continuing through April 2012, We The People solicited investors to purchase interests in
investment contracts, referred to by We The People as CGAs, which were securities, through an
asset exchange.  Specifically, We The People offered to have investors exchange various assets –
including stocks, annuities, real estate, or cash – for a CGA.  Under the CGA agreement, We The
People agreed to make periodic payments, immediately or after a period of deferment, for the
lifetime of the CGA purchaser and, sometimes, his or her designated beneficiary.
  2
  As detailed
further herein, We The People through, among others, Richard and Susan Olive, made numerous
false and misleading statements of material fact in the course of the CGA offering.
14. During the period We The People was issuing and exchanging securities, it
claimed to operate as a non-profit organization.  However, rather than operate as a charity, We
The People operated for the primary purpose of issuing CGAs.  We The People used the
proceeds of the CGA offering to pay substantial sums to the Olives, third-party promoters, and
consultants.  The Olives also misappropriated some of the proceeds of the CGA offering for their

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  Tennessee dismissed its charges after Richard Olive was indicted by the federal grand jury.
2
  Although called a “charitable gift annuity” by We The People, the products sold were different
from CGAs issued legitimately for several reasons, including, but not limited to:  (a) We The People
marketed the product based on false representations regarding the financial benefits of its CGAs; (b)  We
The People utilized third-parties it referred to as “marketing advisors” who promoted We The People’s
products in exchange for significant, undisclosed commissions; (c) We The People issued CGAs
primarily to benefit the Olives and promoters, rather than charity; and (d) assets transferred to We The
People in exchange for CGAs were its only source of funds.

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own personal benefit.  We The People directed only an insignificant amount of the money raised
towards charitable services, contrary to its representations.  For instance, We The People made
public statements that it had donated $21.8 million in relief aid, when in fact the supplies were
donated by others and WTP merely made a small donation to cover the cost of a third-party to
ship the supplies.
15. We The People’s CGAs were promoted and marketed as investments.  We The
People claimed that its CGAs were worth the “full” accumulated value of the assets transferred
by investors to We The People, and that purchasers would receive an income stream, penalty free
cash withdrawals, and tax benefits.
16. Investors with We The People did not have any duties or management roles in the
operation of the We The People CGA program.  Investors were dependent upon the expertise and
efforts of We The People for their returns.  Also, We The People pooled investor funds in
various bank accounts.
17. Investors often learned about We The People’s investment product from
promoters who signed marketing agreements with We The People.  We The People would
provide these promoters with materials, including flyers, letters, illustrations, and even videos, to
use in soliciting the investments.   We The People paid these promoters significant commissions,
ranging from 7-10%.
18. Investors also learned about We The People’s product from its website, direct
mail solicitations, or through in-person seminars conducted by We The People.
19. The Olives were directly involved in nearly all aspects of the We The People
offering and received commissions based on the assets transferred to We The People pursuant to
the CGA program.  Richard Olive was head of We The People’s marketing and promotional

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efforts.  He organized We The People’s sales operations, drafted the marketing materials,
solicited investors, and recruited third-parties to solicit investors to purchase the CGAs.   Susan
Olive served as We The People’s chief administrative and financial officer, and also supported
We The People’s marketing and promotional efforts.  Together, with one other individual, they
formed the “executive management group” at We The People and were the highest-paid
employees at We The People.
20. Richard and Susan Olive conducted seminars about the program for potential
investors and, at those seminars, distributed promotional materials related to the program.
Richard Olive featured on promotional videos distributed by We The People and also spoke
directly with individuals over the phone to solicit investments with We The People.
21. By the end of 2009, investors had transferred almost $10 million in assets to We
The People in exchange for its CGAs.  By the end of 2010, that number had risen to over $25
million.  And as of April 2012, when We The People ceased offering CGAs in response to the
SEC’s investigation of its conduct, We The People had received over $75 million in assets from
over 400 investors in over 30 states in exchange for the issuance of its investment products.  A
portion of the assets received in exchange for CGAs consisted of stocks and other securities.
III.  Misrepresentations and Acts of Fraud and Deceit
22. As a part of the scheme, We The People made numerous false and misleading
statements through, among others, the Olives about the CGAs and engaged in acts of fraud and
deceit on prospective and existing investors.
23. With respect to the value of the CGAs, We The People falsely claimed in written
materials and oral statements that in exchange for their existing asset, investors would receive a
product worth the “full accumulated value” of the transferred asset, in addition to receiving fixed

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payments based on a specified percentage of the accumulated value of the assets they transferred
and other financial benefits.
24. In fact, those claims were misleading because potential investors were not told in
advance of transferring their assets to We The People that the value of the CGA issued in
exchange for the transferred assets – as calculated by We The People – was always substantially
less than those assets’ “full” accumulated value because We The People took a significant
percentage of the asset’s value and kept it as a purported “charitable gift.”
25. With respect to the safety and security of the investment, We The People falsely
stated in promotional and marketing materials and call scripts containing information shared with
potential investors that We The People maintained a reserve, equal to 110% of its liabilities,
secured in a trust account with a financial services company and that We The People’s trust
account could not be borrowed or loaned against. In fact, this claim was false.  We The People
does not have any restricted-access “trust accounts,” let alone maintain a “reserve” in them.
26. Further with respect to the safety and security of the investment, We The People
falsely stated in promotional and marketing materials and call scripts containing information
shared with potential investors that it “reinsured” its products through “highly rated” commercial
insurance companies.
27. Representations that We The People obtained reinsurance for its investment
products are false.  We The People did not purchase reinsurance from an insurance company to
cover its potential liabilities under the CGAs and there is no obligation running from any
insurance company to the investor to cover any losses they may have in the event We The People
defaults on its payment obligations.

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28. Also, We The People failed to disclose to investors any information concerning
the Olives’ legal problems, including the fact that Richard Olive has been found to have engaged
in securities fraud in connection with the sale of similar products at NFOA.  We The People also
failed to disclose any information concerning the Olives’ criminal indictments, in February 2010
and March 2012, in connection with their conduct at NFOA.
29. We The People also failed to disclose to investors any information concerning the
several million dollars in commissions paid in connection with the sale of its investment
products.  We The People typically paid commissions of 7% to its marketing advisers, and in
some instances up to 10%.  We The People also paid commissions to the Olives, ranging from
.75% to 2.5% during their period of employment.
30. We The People’s false statements were made by phone, e-mail, facsimile, and
through United States mail.
IV. Offer and Sale of Unregistered Securities
31. Section 5 of the Securities Act prohibits any offers, directly or indirectly, to sell a
security unless a registration statement for that security has been filed with the SEC.   A
registration statement is transaction specific.  Each sale of a security must either be made
pursuant to a registration statement or fall under a registration exemption.
32. The interests in the CGAs were investment contracts, which are securities under
federal law.
33. At the time of the offers and sales of the interests in We The People’s CGA
program, there were no registration statements filed and in effect with respect to the program.

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34. We The People offered and sold interests in the investment program to hundreds
of investors in multiple states.   Except for the purported returns and identification of items being
exchanged, the terms of the investment contracts were substantially similar.
35. We The People did not provide current or prospective investors with material,
accurate information about We The People’s finances or about the value of the investment
contracts that We The People sold.  We The People also did not provide current or prospective
investors with an audited balance sheet for We The People, or any other accurate, material
financial disclosures.
36. We The People took no steps to ensure that the offering and sale of the CGAs
were directed to only a small number of sophisticated investors and, in fact, took no steps to
determine potential investors’ net worth, or that investors had the knowledge, experience, or
business acumen to qualify as sophisticated or accredited investors.  Most of the investors were
elderly, many were unsophisticated, and some invested a significant portion of their entire
savings with We The People.
FIRST CLAIM FOR RELIEF
Fraud - Violations of Securities Act Section 17(a)
[15 U.S.C. § 77q(a)]

37. The SEC incorporates the allegations of paragraphs 1 through 36 as if fully set
forth herein.
38. We The People, directly or indirectly, with scienter, in the offer or sale of
securities, by use of the means or instruments of transportation or communication in interstate
commerce or by use of the mails, employed a device, scheme, or artifice to defraud, in violation
of Section 17(a)(1) of the Securities Act.

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39. We The People, directly or indirectly, in the offer or sale of securities, by use of
the means or instruments of transportation or communication in interstate commerce or by use of
the mails, obtained money or property by means of untrue statements of material fact or by
omissions to state material facts necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, in violation of Section 17(a)(2) of
the Securities Act.
40. We The People, directly or indirectly, in the offer or sale of securities, by use of
the means or instruments of transportation or communication in interstate commerce or by use of
the mails, engaged in transactions, practices, or courses of business which have been or are
operating as a fraud or deceit upon the purchasers of securities, in violation of Section 17(a)(3)
of the Securities Act.
41. We The People has violated, and unless restrained and enjoined will in the future
violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Fraud – Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
[15 U.S.C. §§ 78j(b) and 17 C.F.R. § 240.10b-5]

42. The SEC incorporates the allegations of paragraphs 1 through 41 as if fully set
forth herein.
43. We The People, acting with scienter, by use of means or instrumentalities of
interstate commerce or of the mails, or of any facility of a national securities exchange, used or
employed, in connection with the purchase or sale of a security, a manipulative or deceptive
device or contrivance in contravention of the rules and regulations of the SEC; employed
devices, schemes or artifices to defraud; made untrue statements of material fact or omitted to
state material facts necessary in order to make the statements made, in light of the circumstances

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under which they were made, not misleading; or engaged in acts, practices or courses of business
which operated or would operate as a fraud or deceit upon any person, in violation Section 10(b)
of the Exchange Act and Rule 10b-5 thereunder.
44. We The People has violated, and unless restrained and enjoined will in the future
violate Exchange Act Sections 10(b) and Rule 10b-5 [15 U.S.C. §§ 78j(b) and 17 C.F.R. §
240.10b-5].
THIRD CLAIM FOR RELIEF
Sale of Unregistered Securities: Violations of Sections 5(a) and 5(c) of the Securities Act
[15 U.S.C. §§ 77e(a) and 77e(c)]

45. The SEC incorporates the allegations of paragraphs 1 through 44 as if fully set
forth herein.
46. We The People, directly or indirectly, made use of the means or instruments of
transportation or communication in interstate commerce or of the mails to offer and sell
securities through the use or medium of a prospectus or otherwise, and carried or caused to be
carried through the mails, or in interstate commerce, by means or instruments of transportation,
such securities for the purpose of sale or for delivery after sale, when no registration statement
had been filed or was in effect as to such securities.
47. We The People has violated, and unless restrained and enjoined, will continue to
violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)].
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that the Court:
1. Enter an Order finding that We The People committed the violations alleged in
the First Through Third Claims for Relief in this Complaint, and unless restrained will continue
to do so;

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2. Enter Injunctions, in a form consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, temporarily, preliminarily, and permanently restraining and enjoining We The
People, and their officers, agents, servants, employees, attorneys, fictitious trade name entities,
and those persons in active concert or participation with them who receive actual notice by
personal service or otherwise, from violating or any of the violations alleged;
3. Order that We The People disgorge all illegal gains, together with prejudgment
and post judgment interest;
4. Order that We The People, and any entities that they control, each prepare a
sworn accounting of their receipt, disbursement and/or use of any funds received directly or
indirectly from any investor and include a schedule of each of their assets and liabilities and a
schedule of the assets and liabilities of any entities that they control;
5. Enter an Order appointing a receiver for the purposes of marshaling and
preserving all assets of the Defendant; and
6. Order such other relief as this Court may deem just or appropriate.

Dated:  February 4, 2013

 Respectfully submitted,

/s/ Nicholas Heinke
Nicholas Heinke (Special Bar No. A5501845)
Dugan Bliss
U.S. Securities and Exchange Commission
1801 California Street, Suite 1500
Denver, CO  80202
Telephone: (303) 844-1000
Facsimile: (303) 844-1068
Attorneys for Plaintiff

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Of Counsel:
Ian Karpel
Michael Cates
Stephen C. McKenna
U.S. Securities and Exchange Commission
1801 California Street, Suite 1500
Denver, CO  80202
Telephone: (303) 844-1000
Facsimile: (303) 844-1068

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UNITED STATES DISTRICT COURT 
FOR THE SOUTHERN DISTRICT OF FLORIDA 

 
Case No. ____________-Civ 

SECURITIES AND EXCHANGE COMMISSION, 

    Plaintiff,  

v.  

WE THE PEOPLE, INC. OF THE UNITED STATES, 

Defendant. 

 
 

COMPLAINT 

 

Plaintiff, United States Securities and Exchange Commission (“SEC”), states and alleges 

as follows against Defendant We The People, Inc. of The United States (“We The People”): 

SUMMARY OF THE CASE 

1. We The People, a purported charitable organization based in Tallahassee, Florida, 

defrauded investors by making false and misleading statements in connection with the offer, sale, 

and purchase of securities.  Enticed by We The People’s scheme, investors transferred assets – 

stocks, annuities, real estate,  or cash – to We The People in exchange for an investment product 

that We The People called a “tax-deductible gift annuity” or “charitable gift annuity” (“CGA”).  

From June 2008 through April 2012, We The People raised over $75 million in assets from 

approximately 400 investors in over 30 states, almost all of whom are elderly.    

2. We The People’s marketing and promotional materials for the CGA offering 

contained misrepresentations and omissions of material fact, including: 

Case 2:13-cv-14050-XXXX   Document 1   Entered on FLSD Docket 02/04/2013   Page 1 of 14



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• false statements regarding the value of the CGA that investors received in exchange 
for the assets transferred to We The People, falsely claiming that investors would 
receive the full accumulated value of their investments; 
 

• false statements regarding the safety and security of  the CGA program, falsely 
claiming that We The People held in trust a reserve equal to 110% of its liabilities and 
that it obtained reinsurance; 
 

• omissions regarding the indictments and regulatory sanctions issued against two We 
The People senior executives, Richard and Susan Olive, for fraudulently selling 
similar products at a company known as National Foundation of America (“NFOA”); 
and  

• omissions regarding the sizable commissions We The People paid to third-party 
promoters on the sale of its products, hiding that these commissions totaled several 
million dollars. 

We The People also made false public statements regarding the amount of charitable 

contributions it made, significantly exaggerating those contributions.  By so acting, We The 

People violated the anti-fraud provisions of federal securities laws and offered and sold securities 

in violation of the registration provisions of the federal securities laws.   

3. The SEC brings this civil enforcement action seeking permanent injunctions and 

other appropriate relief, which may include disgorgement plus prejudgment and postjudgment 

interest, for violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities 

Act”) [15 U.S.C. §§ 77e(a), 77e(c), 77q(a)]; Section 10(b) of the Securities Exchange Act of 

1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b) and 78o(a)]; and Rule 10b-5 [17 C.F.R. §240.10b-

5]. 

JURISDICTION AND VENUE 

4. The Court has jurisdiction pursuant to Securities Act Sections 20(b) and 22(a) [15 

U.S.C. §§ 77t(b) and 77v(a)], and Exchange Act Sections 21(d) and (e), and 27 [15 U.S.C. §§ 

78u(d) and (e) and 78aa]. 

Case 2:13-cv-14050-XXXX   Document 1   Entered on FLSD Docket 02/04/2013   Page 2 of 14



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5. In connection with the acts described in this Complaint, Defendant used the mails, 

other instruments of communication in interstate commerce, and means or instrumentalities of 

interstate commerce. 

6. Venue lies in this Court pursuant to Securities Act Section 22(a) [15 U.S.C. § 

77v(a)], Exchange Act Section 27 [15 U.S.C. § 78aa], and 28 U.S.C. § 1391(b) (2).  Certain of 

the acts and practices described in this Complaint occurred in the Southern District of Florida, 

and certain investors in We The People reside in the Southern District of Florida.  Further, 

Defendant has consented to venue in this Court. 

DEFENDANT 

7. We The People is a Massachusetts corporation registered under Section 501(c)(3) 

of the Internal Revenue Code with its principal place of business at 2636 Mitcham Drive, 

Tallahassee, Florida 32308.   

FACTUAL BACKGROUND 

I. The Olives Join We The People 

8. We The People was founded in 1987 and originally operated as non-profit 

organization that promoted nuclear safety.  However, from the late 1990s until 2008, We The 

People was an entity that had no assets and limited operations.  We The People became 

significantly more active in March 2008, when it hired Richard Olive and his wife Susan Olive 

to raise money for We The People.   

9. In March 2008, the Olives signed a joint employment agreement with We The 

People.  Under the agreement, We The People agreed to pay the Olives commissions.  

Originally, We The People agreed to pay the Olives a combined 1.5% commission.  In March 

2009, We The People increased the combined percentage to 2.5%.   And in June 2009, the Olives 

Case 2:13-cv-14050-XXXX   Document 1   Entered on FLSD Docket 02/04/2013   Page 3 of 14



4 
 

started receiving a base salary as well as a combined .75% commission.  During their period of 

employment, March 2008 to April 2012, the Olives were paid over $1.1 million in salary and 

commissions.   

10. At the time they were hired by We The People, the Olives were subject to 

numerous adverse legal proceedings related to their previous business.  The Olives ran an 

investment program at NFOA, a purported charity based in Tennessee, which involved having 

elderly individuals transferring assets to NFOA (typically a commercial annuity) and, in 

exchange for the transferred assets, NFOA would issue investors a product similar to We The 

People’s CGAs.  

11. By the time the Olives joined We The People, regulators in several states, 

including, but not limited to, Alabama, California, Florida, Iowa, Tennessee, Texas, and 

Washington had determined that NFOA’s products were not properly registered, or that NFOA 

made misleading statements to investors in connection with the sale of the products.   For 

example,  

• In April 2007, the State of Florida determined that Richard Olive and Susan Olive 
were engaged in unauthorized and illegal transactions through NFOA and presented 
“an immediate danger to the public health, safety or welfare of Florida consumers.”   
 

• In May 2007, the Texas State Securities Board issued a cease and desist order which 
found that NFOA’s products were “securities” and that the securities were sold 
illegally both because they were unregistered and because NFOA and Richard Olive 
“intentionally” failed to disclose “material facts” in connection with the sales of those 
securities.  

 
• Also in May 2007, the State of Tennessee brought a civil suit against NFOA and the 

Olives, among others, for selling products without the proper licenses and 
registration.  Shortly thereafter, the court appointed a receiver to wind down NFOA’s 
affairs. 

 
12. The Olives’ conduct at NFOA also resulted in criminal charges.  In February 

2010, while they were employed by We The People, a Tennessee grand jury indicted the Olives 

Case 2:13-cv-14050-XXXX   Document 1   Entered on FLSD Docket 02/04/2013   Page 4 of 14



5 
 

on multiple theft charges in connection with their sale of investment products at NFOA.   Then, 

in March 2012, a federal grand jury in the Middle District of Tennessee indicted Richard Olive 

on several fraud counts arising out of his actions at NFOA.1   

II. We The People’s Offer and Sale of CGAs 

13. After the Olives arrived at We The People, beginning on or about May 2008 and 

continuing through April 2012, We The People solicited investors to purchase interests in 

investment contracts, referred to by We The People as CGAs, which were securities, through an 

asset exchange.  Specifically, We The People offered to have investors exchange various assets –  

including stocks, annuities, real estate, or cash – for a CGA.  Under the CGA agreement, We The 

People agreed to make periodic payments, immediately or after a period of deferment, for the 

lifetime of the CGA purchaser and, sometimes, his or her designated beneficiary. 2  As detailed 

further herein, We The People through, among others, Richard and Susan Olive, made numerous 

false and misleading statements of material fact in the course of the CGA offering.   

14. During the period We The People was issuing and exchanging securities, it 

claimed to operate as a non-profit organization.  However, rather than operate as a charity, We 

The People operated for the primary purpose of issuing CGAs.  We The People used the 

proceeds of the CGA offering to pay substantial sums to the Olives, third-party promoters, and 

consultants.  The Olives also misappropriated some of the proceeds of the CGA offering for their 
                                                           
1  Tennessee dismissed its charges after Richard Olive was indicted by the federal grand jury.   

2  Although called a “charitable gift annuity” by We The People, the products sold were different 
from CGAs issued legitimately for several reasons, including, but not limited to:  (a) We The People 
marketed the product based on false representations regarding the financial benefits of its CGAs; (b)  We 
The People utilized third-parties it referred to as “marketing advisors” who promoted We The People’s 
products in exchange for significant, undisclosed commissions; (c) We The People issued CGAs 
primarily to benefit the Olives and promoters, rather than charity; and (d) assets transferred to We The 
People in exchange for CGAs were its only source of funds.   

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own personal benefit.  We The People directed only an insignificant amount of the money raised 

towards charitable services, contrary to its representations.  For instance, We The People made 

public statements that it had donated $21.8 million in relief aid, when in fact the supplies were 

donated by others and WTP merely made a small donation to cover the cost of a third-party to 

ship the supplies. 

15. We The People’s CGAs were promoted and marketed as investments.  We The 

People claimed that its CGAs were worth the “full” accumulated value of the assets transferred 

by investors to We The People, and that purchasers would receive an income stream, penalty free 

cash withdrawals, and tax benefits.   

16. Investors with We The People did not have any duties or management roles in the 

operation of the We The People CGA program.  Investors were dependent upon the expertise and 

efforts of We The People for their returns.  Also, We The People pooled investor funds in 

various bank accounts.   

17. Investors often learned about We The People’s investment product from 

promoters who signed marketing agreements with We The People.  We The People would 

provide these promoters with materials, including flyers, letters, illustrations, and even videos, to 

use in soliciting the investments.   We The People paid these promoters significant commissions, 

ranging from 7-10%.     

18. Investors also learned about We The People’s product from its website, direct 

mail solicitations, or through in-person seminars conducted by We The People.    

19. The Olives were directly involved in nearly all aspects of the We The People 

offering and received commissions based on the assets transferred to We The People pursuant to 

the CGA program.  Richard Olive was head of We The People’s marketing and promotional 

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efforts.  He organized We The People’s sales operations, drafted the marketing materials, 

solicited investors, and recruited third-parties to solicit investors to purchase the CGAs.   Susan 

Olive served as We The People’s chief administrative and financial officer, and also supported 

We The People’s marketing and promotional efforts.  Together, with one other individual, they 

formed the “executive management group” at We The People and were the highest-paid 

employees at We The People.   

20. Richard and Susan Olive conducted seminars about the program for potential 

investors and, at those seminars, distributed promotional materials related to the program.  

Richard Olive featured on promotional videos distributed by We The People and also spoke 

directly with individuals over the phone to solicit investments with We The People. 

21. By the end of 2009, investors had transferred almost $10 million in assets to We 

The People in exchange for its CGAs.  By the end of 2010, that number had risen to over $25 

million.  And as of April 2012, when We The People ceased offering CGAs in response to the 

SEC’s investigation of its conduct, We The People had received over $75 million in assets from 

over 400 investors in over 30 states in exchange for the issuance of its investment products.  A 

portion of the assets received in exchange for CGAs consisted of stocks and other securities.   

III.  Misrepresentations and Acts of Fraud and Deceit 

22. As a part of the scheme, We The People made numerous false and misleading 

statements through, among others, the Olives about the CGAs and engaged in acts of fraud and 

deceit on prospective and existing investors.  

23. With respect to the value of the CGAs, We The People falsely claimed in written 

materials and oral statements that in exchange for their existing asset, investors would receive a 

product worth the “full accumulated value” of the transferred asset, in addition to receiving fixed 

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payments based on a specified percentage of the accumulated value of the assets they transferred 

and other financial benefits.   

24. In fact, those claims were misleading because potential investors were not told in 

advance of transferring their assets to We The People that the value of the CGA issued in 

exchange for the transferred assets – as calculated by We The People – was always substantially 

less than those assets’ “full” accumulated value because We The People took a significant 

percentage of the asset’s value and kept it as a purported “charitable gift.”  

25. With respect to the safety and security of the investment, We The People falsely 

stated in promotional and marketing materials and call scripts containing information shared with 

potential investors that We The People maintained a reserve, equal to 110% of its liabilities, 

secured in a trust account with a financial services company and that We The People’s trust 

account could not be borrowed or loaned against. In fact, this claim was false.  We The People 

does not have any restricted-access “trust accounts,” let alone maintain a “reserve” in them.   

26. Further with respect to the safety and security of the investment, We The People 

falsely stated in promotional and marketing materials and call scripts containing information 

shared with potential investors that it “reinsured” its products through “highly rated” commercial 

insurance companies.   

27. Representations that We The People obtained reinsurance for its investment 

products are false.  We The People did not purchase reinsurance from an insurance company to 

cover its potential liabilities under the CGAs and there is no obligation running from any 

insurance company to the investor to cover any losses they may have in the event We The People 

defaults on its payment obligations.  

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28. Also, We The People failed to disclose to investors any information concerning 

the Olives’ legal problems, including the fact that Richard Olive has been found to have engaged 

in securities fraud in connection with the sale of similar products at NFOA.  We The People also 

failed to disclose any information concerning the Olives’ criminal indictments, in February 2010 

and March 2012, in connection with their conduct at NFOA.   

29. We The People also failed to disclose to investors any information concerning the 

several million dollars in commissions paid in connection with the sale of its investment 

products.  We The People typically paid commissions of 7% to its marketing advisers, and in 

some instances up to 10%.  We The People also paid commissions to the Olives, ranging from 

.75% to 2.5% during their period of employment. 

30. We The People’s false statements were made by phone, e-mail, facsimile, and 

through United States mail. 

IV. Offer and Sale of Unregistered Securities  

31. Section 5 of the Securities Act prohibits any offers, directly or indirectly, to sell a 

security unless a registration statement for that security has been filed with the SEC.   A 

registration statement is transaction specific.  Each sale of a security must either be made 

pursuant to a registration statement or fall under a registration exemption. 

32. The interests in the CGAs were investment contracts, which are securities under 

federal law. 

33. At the time of the offers and sales of the interests in We The People’s CGA 

program, there were no registration statements filed and in effect with respect to the program.   

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34. We The People offered and sold interests in the investment program to hundreds 

of investors in multiple states.   Except for the purported returns and identification of items being 

exchanged, the terms of the investment contracts were substantially similar.   

35. We The People did not provide current or prospective investors with material, 

accurate information about We The People’s finances or about the value of the investment 

contracts that We The People sold.  We The People also did not provide current or prospective 

investors with an audited balance sheet for We The People, or any other accurate, material 

financial disclosures.   

36. We The People took no steps to ensure that the offering and sale of the CGAs 

were directed to only a small number of sophisticated investors and, in fact, took no steps to 

determine potential investors’ net worth, or that investors had the knowledge, experience, or 

business acumen to qualify as sophisticated or accredited investors.  Most of the investors were 

elderly, many were unsophisticated, and some invested a significant portion of their entire 

savings with We The People. 

FIRST CLAIM FOR RELIEF 
Fraud - Violations of Securities Act Section 17(a) 

[15 U.S.C. § 77q(a)] 
 

37. The SEC incorporates the allegations of paragraphs 1 through 36 as if fully set 

forth herein. 

38. We The People, directly or indirectly, with scienter, in the offer or sale of 

securities, by use of the means or instruments of transportation or communication in interstate 

commerce or by use of the mails, employed a device, scheme, or artifice to defraud, in violation 

of Section 17(a)(1) of the Securities Act. 

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39. We The People, directly or indirectly, in the offer or sale of securities, by use of 

the means or instruments of transportation or communication in interstate commerce or by use of 

the mails, obtained money or property by means of untrue statements of material fact or by 

omissions to state material facts necessary to make the statements made, in light of the 

circumstances under which they were made, not misleading, in violation of Section 17(a)(2) of 

the Securities Act. 

40. We The People, directly or indirectly, in the offer or sale of securities, by use of 

the means or instruments of transportation or communication in interstate commerce or by use of 

the mails, engaged in transactions, practices, or courses of business which have been or are 

operating as a fraud or deceit upon the purchasers of securities, in violation of Section 17(a)(3) 

of the Securities Act. 

41. We The People has violated, and unless restrained and enjoined will in the future 

violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Fraud – Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

[15 U.S.C. §§ 78j(b) and 17 C.F.R. § 240.10b-5] 
 

42. The SEC incorporates the allegations of paragraphs 1 through 41 as if fully set 

forth herein. 

43. We The People, acting with scienter, by use of means or instrumentalities of 

interstate commerce or of the mails, or of any facility of a national securities exchange, used or 

employed, in connection with the purchase or sale of a security, a manipulative or deceptive 

device or contrivance in contravention of the rules and regulations of the SEC; employed 

devices, schemes or artifices to defraud; made untrue statements of material fact or omitted to 

state material facts necessary in order to make the statements made, in light of the circumstances 

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under which they were made, not misleading; or engaged in acts, practices or courses of business 

which operated or would operate as a fraud or deceit upon any person, in violation Section 10(b) 

of the Exchange Act and Rule 10b-5 thereunder. 

44. We The People has violated, and unless restrained and enjoined will in the future 

violate Exchange Act Sections 10(b) and Rule 10b-5 [15 U.S.C. §§ 78j(b) and 17 C.F.R. § 

240.10b-5]. 

THIRD CLAIM FOR RELIEF 
Sale of Unregistered Securities: Violations of Sections 5(a) and 5(c) of the Securities Act  

[15 U.S.C. §§ 77e(a) and 77e(c)] 
 

45. The SEC incorporates the allegations of paragraphs 1 through 44 as if fully set 

forth herein. 

46. We The People, directly or indirectly, made use of the means or instruments of 

transportation or communication in interstate commerce or of the mails to offer and sell 

securities through the use or medium of a prospectus or otherwise, and carried or caused to be 

carried through the mails, or in interstate commerce, by means or instruments of transportation, 

such securities for the purpose of sale or for delivery after sale, when no registration statement 

had been filed or was in effect as to such securities.  

47. We The People has violated, and unless restrained and enjoined, will continue to 

violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)]. 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court:  

1. Enter an Order finding that We The People committed the violations alleged in 

the First Through Third Claims for Relief in this Complaint, and unless restrained will continue 

to do so; 

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2. Enter Injunctions, in a form consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, temporarily, preliminarily, and permanently restraining and enjoining We The 

People, and their officers, agents, servants, employees, attorneys, fictitious trade name entities, 

and those persons in active concert or participation with them who receive actual notice by 

personal service or otherwise, from violating or any of the violations alleged; 

3. Order that We The People disgorge all illegal gains, together with prejudgment 

and post judgment interest; 

4. Order that We The People, and any entities that they control, each prepare a 

sworn accounting of their receipt, disbursement and/or use of any funds received directly or 

indirectly from any investor and include a schedule of each of their assets and liabilities and a 

schedule of the assets and liabilities of any entities that they control;  

5. Enter an Order appointing a receiver for the purposes of marshaling and 

preserving all assets of the Defendant; and 

6. Order such other relief as this Court may deem just or appropriate. 

 
 
Dated:  February 4, 2013  
 
 Respectfully submitted, 
 

/s/ Nicholas Heinke     
Nicholas Heinke (Special Bar No. A5501845) 
Dugan Bliss  
U.S. Securities and Exchange Commission 
1801 California Street, Suite 1500 
Denver, CO  80202 
Telephone: (303) 844-1000 
Facsimile: (303) 844-1068 
Attorneys for Plaintiff 
 
 
 

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Of Counsel: 
Ian Karpel 
Michael Cates 
Stephen C. McKenna 
U.S. Securities and Exchange Commission 
1801 California Street, Suite 1500 
Denver, CO  80202 
Telephone: (303) 844-1000 
Facsimile: (303) 844-1068 
 
 

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