Life Settlement - Compliance News

Father, daughter accused of preying on seniors Father

A Redding father and daughter are among eight people indicted by a federal grand jury on felony charges alleging that they tried to bilk about 500 investors, many of whom are senior citizens, out of more than $25 million, officials with the U.S. attorney’s office and Securities and Exchange Commission announced Thursday.

Three people pleaded guilty Tuesday in a multimillion dollar scheme to defraud life insurance policy investors, authorities said.
Raquel Kohler, Ameer Khan and Stephen Ziegler each pleaded guilty in federal court in Miami to one count of conspiracy in connection to fraudulent activities through Mutual Benefits Corp., according to a statement from Miami U.S. Attorney R. Alexander Acosta.

The state will not launch a formal investigation into Boca Raton philanthropist Barry Kaye’s relationship with a company accused of defrauding the elderly, an official from the Department of Financial Services said Tuesday.

Philanthropist and insurance tycoon Barry Kaye is bringing unwanted attention to a university that has benefited from his largess and to the life settlement industry. Two weeks ago, Mr. Kaye, his son, Howard, and their firm were named in a complaint issued by the Florida Office of Insurance Regulation in Tallahassee against Coventry First LLC for “engaging in fraudulent or dishonest practices” involving life settlement transactions.

Galvin alleges funeral, insurance scams netted more than $1 million.
A Winthrop man has defrauded elderly North Shore residents of more than $1 million by selling them fraudulent life insurance policies and by failing to return some or all of their prepaid funeral expenses, which he persuaded funeral directors to invest with him, according to an administrative complaint filed yesterday by Secretary of State William F. Galvin.

Ross and Collaborating Agents Acting in Concert with Him Could Be Held Liable for Millions of Dollars, According to MCC

The Honorable Ronald L. Bauer, Judge of the Orange County Superior Court, granted MCC’s request for a preliminary injunction against Mark Ross, his companies, and those acting in concert with them. The injunction comes five weeks after Judge Bauer entered a restraining order against the same group for various violations of contracts and tort law.

In a significant reversal of its previous position, the Superior Court of Orange County ruled that life insurance industry innovator Mark Ross cannot be prevented from engaging in public dialogue about the business practices of Mutual Credit Corp. [MCC], an Irvine, Calif.-based premium finance agency that Mr. Ross alleges has defrauded seniors out of hundreds of millions of dollars in life insurance protection. The decision continues the successful advance of Mr. Ross’ efforts to “clean up” abusive practices in the life insurance industry.

Coventry today issued the following statement in connection with a lawsuit that was filed by Ritchie Capital Management:
“Coventry considers this action by Ritchie Capital Management to be a cheap publicity stunt to divert attention from its own well-documented problems and will seek an immediate dismissal with prejudice. Coventry has not committed fraud of any kind. Coventry has been and continues to be in full compliance with all agreements related to the Ritchie life settlement portfolio.

Ritchie Capital Management today filed a complaint against Coventry First, a leader in the life settlements industry, under the Federal RICO Act and for fraud, breach of fiduciary duty and breach of contract. This complaint, filed in the United States District Court, Southern District of New York, was brought to recover damages to Ritchie Capital caused by Coventry First’s pervasive fraud in the secondary market for life insurance, wherein an investor purchases a life insurance policy from the owner, pays the premiums as they come due, and then collects the benefits upon the expiration of the insured.

North Dakota last week became the first state to adopt a more stringent statute regulating life settlements, with special emphasis on stranger-originated life insurance. Other states may follow, making life settlements a less attractive option for adviser clients who want to sell or invest in life insurance policies, industry observers say. Life settlements are the sale of life insurance policies by policyholders to third-party investors.