Company Is Ordered to Avoid Misleading Sales Pitches : Courts: Injunction prevents Lake Forest firm from telling senior citizens that it prevents a need for long-term convalescent care, among other claims.

A Lake Forest company, accused of misleading senior citizens who buy its in-home care plan, has been ordered by a judge not to make false statements in its sales pitch.

In a civil lawsuit filed in Superior Court, Orange County Deputy Dist. Atty. Robert C. Gannon Jr. charged that officials with Vanguard Assisted Care Inc. pose “a continuing threat to the consumers of the state in that more elderly individuals and senior citizens may be misled and enticed into purchasing” the company’s companion-care plan.

From its offices in Lake Forest, Vanguard salespeople have been selling the companion-care plan, particularly to residents of the nearby Leisure World retirement community in Laguna Hills. Under an agreement, senior citizens must make an initial $6,600 payment to qualify for the plan’s benefits. They also must make co-payments when they call for an in-home worker to help them with housecleaning, preparing meals or getting to doctor’s appointments.

The injunction granted by Superior Court Judge Phillip E. Cox on Wednesday prohibits Vanguard employees from making several claims about the company’s plan. Named in the lawsuit were Vanguard’s President Stanley Norman; his son and company Vice President Jeffrey L. Norman; and company consultant Barbara Bufty.

Jeffrey Norman denied the district attorney’s allegations on Friday, saying that the district attorney “has inadequate information about our plan, and we are prepared to educate him about the facts of this matter.”

Gannon and the district attorney’s lawsuit painted a picture of high-pressure salespeople who withheld information about the plan from senior citizens and repeatedly made “untrue or misleading statements” about its benefits.

The lawsuit alleges that the defendants sought to mislead potential buyers into believing that more than 2,000 Leisure World residents had purchased the plan when in fact, no more than 20 sales had been made up to Aug. 20, 1993.

The sales people also falsely claimed that the plan offered protection against a need for long-term convalescent care, “when in fact . . . members would not necessarily avoid the need for such care,” according to the suit. In addition, company officials allegedly misled potential buyers into believing that in-home companions were employees of Vanguard, when they are members of a registry and independent contractors.

The Normans and Bufty also refused to provide a copy of the service agreement so that purchasers could inspect the terms and conditions of the plan. Purchasers were told that they would receive a copy approximately two weeks after their purchase, the lawsuit alleges.

Gannon said the district attorney’s office decided to file the lawsuit after an investigation with the state Department of Insurance. He disputed claims by company officials that fees they collected have been deposited in a bank account designated solely for the benefit of the plan purchasers.

Vanguard does not have adequate reserves to fund the costs of these services, Gannon said.

Responding to the district attorney’s allegations, Jeffrey Norman said that Vanguard’s reserves are “very adequate, and we’ll have enough money to fund the plan 20 years from now.”

“We feel that many of these allegations are very minor, very incorrect and we are willing to comply with everything that they have said” in their lawsuit, Norman said. “If they want us to tone down the language of our sales pitch, we will.”

“We know the D.A. is just making sure that no one is being scammed,” Norman said. “We are totally willing to comply.”

Times staff writer Mark Landsbaum contributed to this report.