Jeffrey Lucey was a 23-year-old lance corporal in the Marine Reserves when he hanged himself in his family’s Belchertown home in June 2004. He had enlisted in the Marines at 18, long before US troops entered Iraq. He and his parents had opposed that war, but when he was called up, he felt he had to go. After he came home in July 2003, he began drinking heavily, sleeping poorly, and acting erratically, raging at himself for what he had seen and done.

The lawsuit requests payment of all interest Prudential earned, which could be a significant amount for some families. But for the Luceys, the damage is less financial than moral. Kevin Lucey said they agreed to be the lead plaintiffs because: “That’s just wrong. They were profiteering from my son’s death and the death of every single soldier.’’

On Sept. 14, the Department of Veterans Affairs acknowledged the concerns about the accounts and announced that it would change the program to allow beneficiaries to receive lump sum checks.

An amended complaint, filed Aug. 29, added fraud, accusing Prudential of abusing the trust of the families by misleading them and withholding important information. Six more beneficiaries, including an Army colonel, were named in the suit, but it potentially affects tens of thousands.

Infuriated, the Luceys agreed to put their names on a class action lawsuit against Prudential on behalf of all beneficiaries of dead soldiers and veterans who had requested lump sum payments. The suit, filed in federal court in Springfield in July, alleges that Prudential enriched itself at the beneficiaries’ expense by withholding lump sump payments and keeping an unjustifiable amount of interest.

Only much later did he learn that Prudential had never deposited any money in his account, instead investing it as part of its general account and passing on only a small portion of the interest earned, he said.

Several months later, on the advice of a colleague, Kevin Lucey decided to withdraw the money and invest it more profit ably elsewhere. The paperwork had included what looked like a bank checkbook, so he wrote a draft for the balance. Prudential took nearly a month to send the money, he said.

“I didn’t want to hear it,’’ she recalled. “I said it was blood money.’’

Still reeling from Jeffrey’s death, he asked his wife, Joyce, what she wanted to do about the money.

Three weeks later, Lucey received a kit from Prudential Insurance, which provides life insurance benefits to veterans on behalf of the federal government. He had the option of receiving the $250,000 payment in a lump sum or 36 monthly installments. Like most people, Lucey opted for the lump sum, and Prudential explained it had set up an “Alliance Account’’ in his name.

“I never read them. I just signed,’’ he said. “I wanted to get back to Jeff.’’

Kevin Lucey was at the wake for his son, Jeffrey, a Marine who had committed suicide at their Belchertown home in the summer of 2004, when military officers presented him with a stack of forms to sign.

“He was slowly dying in front of our eyes and nobody knew what to do in our family,’’ said his mother, who wears his dog tags around her neck, along with a peace symbol pendant. Despite Jeffrey’s symptoms of post-traumatic stress disorder, they said, the Veterans Administration failed to help him.

In the summer of 2007, Cristobal Bonifaz, a passionate, 75-year-old lawyer practicing out of his barn in Conway, approached the Luceys about a suit he was considering against the Veterans Administration for negligence in dealing with military suicides, which were then barely acknowledged. They agreed to be his first case, hoping the attention might ease the stigma of suicide and prod the VA to address the problem. After the government settled early last year, the VA changed some of its practices.

This summer Bonifaz brought the lawsuit against Prudential, after studying the 2009 annual report for Servicemembers’ Group Life Insurance and finding the numbers didn’t add up.

Servicemembers’ Group Life Insurance, created by Congress in 1965, is a basic entitlement for people in the armed services. It is group policy that the Department of Veterans Affairs purchases solely through Prudential. Subsequent legislation created similar programs for veterans, and for victims of traumatic injury.

According to a VA report, Prudential insured about 6 million people under the service members’ and veterans’ group plans in the 2009 policy year and collected nearly $1 billion in premiums.

Prudential paid lump sum benefits by sending checks directly to beneficiaries until 1999, when, on the basis of an unwritten agreement with the VA, it introduced its Alliance Accounts and presented them to military beneficiaries as the only option for lump sum payments.

Alliance Accounts are retained-asset accounts — interest-bearing, usually short-term accounts that function much like bank money market funds, minus federal protections and mandatory disclosures. Unlike bank accounts, they are not federally insured.

Meanwhile, the insurer sets the rate of interest it turns over to beneficiaries and keeps the bulk. According to the lawsuit, the beneficiaries got 0.5 percent to 1.5 percent, while Prudential earned 5 percent to 6 percent.

Bonifaz said Alliance Accounts are used as a kind of IOU, which Prudential employs to obscure its practice of profiting from money that doesn’t belong to the company.

“Once a person dies,’’ Bonifaz said, “it’s no longer Prudential’s money, period.’’

Bob DeFillippo, Prudential spokesman, agreed that the money belongs to the beneficiary, but insisted, “It’s simply not true that we’re not giving beneficiaries access to all of their money.’’

DeFillippo declined to comment on the lawsuit, but he defended the Alliance Accounts as designed to help people at their most vulnerable by giving them time to grieve and immediate access to their money. He said that because these accounts require ready access to funds, the investment is short-term and the interest rate is lower.

“We’re willing to have a discussion on whether the interest is the right amount,’’ he said, but argued that their rates are commensurate with what bank money market accounts pay.

It is unclear how much interest Prudential made on the accounts; the suit puts the total at half a billion dollars or more.

For Paul Sullivan, executive director of the advocacy group Veterans for Common Sense and a veteran of the first Gulf War, the problem arises from too cozy a relationship between Prudential and the VA.

“Essentially, the VA was asleep at the switch,’’ Sullivan said.

Congress should step in and regulate how for-profit companies deal with veterans’ benefits, he said. “What [Prudential] is doing is war profiteering.’’

That is a sentiment echoed by the Luceys.

For Kevin, Kevin Lucey, it began when the VA failed them. “Then all of a sudden we have Prudential,’’ he said. “I remember as a little kid, you’d see it on TV and you would have the rock. This rock has cracked.

“They were a symbol of strength in America , and I just felt, my God, what’s America? It sort of erodes your faith.’’

Joyce Lucey added: “I’ve always noticed when [soldiers] are going off to war, everybody’s rah-rah, and when they come back it’s rah-rah for this real short time. And then the support is not there.’’

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