Lawyer accused of giving bad financial advice
Stillwell Law office at 2 W Broadway in Alton
Bad financial advice prompted Phone Masters Ltd. of Wood River and its shareholders Barbara Davis and Janet Chappell to file a six-count, $300,000 lawsuit against the Stillwell Law Office and Raymond Stillwell.
According to the complaint, Stillwell advised the plaintiffs that they should invest corporate revenue into a "wealth builder" plan with Peachtree Financial Solutions, a limited liability corporation in Georgia, when in fact the plan was illegal.
Davis and Chappell claim Stillwell told them the plan had significant tax advantages and would legally accomplish corporate and estate planning needs. They were told that unlimited pre-tax corporate earnings could be deposited in the account and not be subject to federal or state income tax, according to the suit.
The complaint states that Davis and Chappell complied with Stillwell’s advice and agreed to transfer $265,000 into the wealth builder plan. Davis and Chappell made an initial payment of $100,000 and successive monthly payments of $15,000 through December 2003.
After learning the plan was illegal an inappropriate for the use and purpose Stillwell suggested on April 24, 2004, Davis and Chapman demanded their money be returned and all accounts be closed.
“Stillwell failed and refused to return the plaintiffs’ funds and instead represented that approximately $90,000 was being withheld and paid to federal and Illinois income tax withholdings,” the complaint states.
Stillwell allegedly converted funds in the account from the corporation Phone Masters, to Barbara Davis individually, and as a result, she was assessed income tax liability on $240,862, according to the suit.
Davis and Chappell claim Stillwell breached their contract to provide competent legal advice by advising them to make payments to Peachtree as part of a estate planning mechanism. They also claim he failed to advise Davis and Chappell that they had a conflict of interest in receiving a commission for compensation from Peachtree, and that he incorrectly advised them of tax consequences.
Despite repeated demands, Stillwell has not returned the plaintiffs' money.
Davis and Chappell are represented by Robert S. Forbes of Alton.
The case has been assigned to Circuit Judge Nicholas Byron.
05 L 180 (3rd Circuit)