DC lawyer Stuart Anolik, a specialist in mid-market captives including for “wealth preservation”, has denied allegations of conflict of interest regarding a Saint Lucia captive strategy at the centre of a $19m premium dispute.

In a suit filed with Maryland District Court in May 2022 plaintiffs Cosmo Import & Export and Outdoor Living (Cosmos Parties), a Wyoming furniture business, argued that they hired Stuart Anolik and the entities that he worked for, Anolik & Associates (A&A) and Fidelis Business & Advisory Services (Fidelis), to provide legal, business, and tax advisory services, particularly with respect to captive insurance matters.

According to his biography on his current law firm FisherBoyles’ website, Anolik has “extensive experience with insurance matters, including captive insurance, where he consults with mid-market closely held businesses on the advantages of implementing captive insurance scenarios that can provide benefits in such areas as risk mitigation, cost control, and wealth preservation”.

Based upon Anolik’s advice and recommendation, the Cosmo Parties said they purchased captive insurance from Reliant Group & Casualty Insurance ICC, Ltd (Reliant) an insurance company domiciled in Saint Lucia.

The plaintiffs argue that Anolik pressured them into putting millions of dollars into the Reliant captive, but did not fully disclose that he had close ties with the company. Anolik was a director of Reliant from 2010 to 2011 and his son had been an employee.

The suit also states that Anolik devised a tax strategy in which Cosmo would sell its right to the policy to a Barbados company, Geneva International Insurance, which would then issue a policy to Cosmo owner Jennifer Hayes for a life insurance trust of which she was beneficiary.

The Cosmo parties further accuse the tax attorney of providing an explanation of the Cosmo policy about its assignment to the Barbados company that gave Reliant a “pretextual excuse” to label the deal an illegal tax evasion scheme, terminate the policy and keep paid premiums totalling $19m.

“Reliant swindled approximately $19m from the Cosmo Parties,” the original complaint document states.

“Upon information and belief, Anolik played a meaningful role in this scam, ultimately allowing Reliant to terminate the Cosmo Parties’ insurance coverages and all benefits thereunder, particularly the right to a return of their premiums paid.”

In the court documents seen by Captive Intelligence, the plaintiffs also refer to Reliant’s reputation as “highly questionable”, noting that one court described its captive insurance programme as, “at best, a scheme, and at worst, a scam”.

In response to the claims made by the plaintiffs, the Anolik admits that for a “very brief time” in 2010 to 2011 he was listed as a director of Reliant, “but denies that at that time or any other time he was involved in Reliant’s operations or business activities”.

“Anolik further admits that his son was employed by Reliant at certain times, but Anolik does not know the actual dates of such employment,” the document said.

The defendant also told court that he had “no involvement” in a decision by Reliant to terminate a client’s policy and keep some $19m in already paid premiums.

“Anolik defendants had no involvement in Reliant’s termination decision and accordingly lack information sufficient to enable them to admit or deny the allegations of Paragraph 6 of the Complaint; therefore, they deny said allegations.”

The defendant argued that Cosmo sold its Reliant policy to Geneva and thus does not have standing to sue him.