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Lawsuit Takes Aim at Dr. Phil's 'Resident Money Expert'

South Carolina couple claims financial wizard scammed them for millions

A South Carolina couple is suing well-known "financial strategist" Loral Langemeier, claiming that the supposed financial wizard cost them well over a million dollars while lining her own pockets.

The couple, Elisabeth and Steven Lenes, sued Langemeier in federal court in South Carolina. Their complaint says that Langemeier is "the author of multiple books...in which Langemeier promotes herself as a 'master coach, financial strategist, and team-made millionaire,' as well as a 'Millionaire Maker.'" According to the complaint, Langemeier also "aggressively markets and teaches her trademarked 'Wealth Cycles,' and...claims to possess a proven 'wealth-building program.'"

The Leneses' suit claims that Langemeier charges thousands of dollars for "wealth-building and investment seminars," and then encourages students to invest in "highly risky, unproven investments from which she receive[s] undisclosed kickbacks."

The Leneses first got in touch with Langemeier after purchasing two of her textbooks at a Charleston bookstore. They contacted her to ask about a real estate investment they were considering. According to the complaint, one of Langemeier's agents told the Leneses to "hold off" on that investment, and that Langemeier could get them a better deal elsewhere.

The Leneses took that advice, and, in March 2006, shelled out $18,000 for one of Langemeier's "Big Table seminars," where they were promised "access to exclusive investment opportunities that had been thoroughly vetted and researched by Langemeier and her team."

Langemeier subsequently convinced the Leneses to exchange "lazy assets" -- such as equity in their homes -- for investments with higher returns. According to the complaint, between June 2006 and September 2008, the Leneses invested well over a million dollars in nine separate investment opportunities touted by Langemeier.

The Leneses' suit says that Langemeier "falsely represent[ed] that she was a like investor in the securities she recommended," when in fact she was receiving "kickbacks, commissions, and/or other consideration as a result of the investments [the Leneses] made." Langemeier further failed to register as an "investment advisor," even though such registration is required by law.

Further, the complaint charges that "[e]ach of the investments recommended by Langemeier was a highly risky start-up venture with no track record and with little reasonable prospects for success."

Langemeier's flashy website, LoralLangemeier.com, boasts that "Loral IS America's MONEY MAKER," and touts her as "a frequent guest on National TV and the resident 'Money Expert' on the Dr. Phil show." Another site, LiveOutLoud.com, markets Langemeier as "the Money Coach," and advertises Webinars, personal coaching, and workshops. An ad for the subtly-named Cash Machine Workshop promises that "This is not a get rich quick scheme or an MLM marketing seminar. This is a real hands on workshop lead by me (Loral) and my dream team of wealth builders, who are graduates of my most powerful and innovative year-long mentoring Program - Loral's Big Table."

The Leneses' complaint charges Langemeier with breach of fiduciary duty, fraud and misrepresentation, negligence, and breach of several South Carolina securities laws, including failing to register as an investment adviser and the unlawful sale of unregistered securities.

Langemeier responds

We received the following from Lynne Taylor, CPA, MBA:

This responds to your article of February 16, 2010 titled "Lawsuit Takes Aim at Dr. Phil's 'Resident Money Expert. I am a Certified Public Accountant licensed in the State of California. During the time period from approximately August 2007 until December 2009, Loral Langemeier engaged me as a consulting chief financial officer (CFO) to, among other tasks, travel to and investigate the principals and/or entities that made up some of the investments described in the Lenes' lawsuit: Specifically, I met with the operating directors or principals and examined the books and records of Bionovix, Inc. (Bionovix), the Z Restaurant Group of entities (ZRG) and Renaissance Laser, LLC (Renaissance). Based on my experience and a review of these records, I know the allegations that you have quoted in your article to be false for the following reasons:

1. Ms. Langemeier did not broker or sell securities related to Bionovix, ZRG or Renaissance, and did not act as an investment or financial advisor in connection with those offerings. Each of these investments was promoted by an independent party or principal of the company who was not an agent of Loral Langemeier or her Live Out Loud company, and each of the investments were offered to accredited investors per the terms and conditions described in private placement memoranda prepared by each entitys securities counsel.

2. Ms. Langemeier did not receive kickbacks, commissions, or any other form of consideration from Bionovix, ZRG or Renaissance. I have in my possession a copy of the detailed general ledgers and trial balances for Bionovix, ZRG and Renaissance and there is no evidence in any of the accounting records that Ms. Langemeier was paid any remuneration or received any income of this nature. In addition, as Ms. Langemeiers consulting CFO and tax accountant for approximately the last three years, I am thoroughly familiar with Ms. Langemeiers detailed accounting records and know she has received no income of any kind from Bionovix, ZRG and Renaissance.

3. Ms. Langemeier is an investor in Bionovix, ZRG and Renaissance, just like the Leneses.

Further, as a result of my investigations of Bionovix, ZRG and Renaissance, I prepared Executive Summaries for Ms. Langemeier which she also shared with others who had made investments in these entities. Ms. Elisabeth Lenes was one of the investors who received copies of the Summaries I prepared. In the case of the ZRG investment, Ms. Lenes called me directly after receiving the ZRG document and asked that I specifically change the language of the Executive Summary to reflect that she had not participated in promoting the ZRG investment to her friends and acquaintances in her Mt. Pleasant, South Carolina community. I included this information in the Executive Summary because Ms. Lenes did, in fact, introduce other investors residing in Mt. Pleasant to Mr. David Zebny (the principal and owner) and his Z Restaurant Group of entities. Those individuals, like Ms. Lenes and her husband, received investor K-1 tax statements for the 2008 tax year, and will receive final K-1 tax statements for the 2009 tax year.

I respectfully ask that you publish these facts as a follow-up to your original article. If you wish to discuss these matters in further detail, please feel free to contact me.


Lynne Taylor, CPA, MBA

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