Christian Stanley’s program was labeled as “Reverse Life Insurance”

The Securities and Exchange Commission’s Los Angeles district office has obtained an emergency court order halting all operations and freezing the assets of a company it says has been “creating the illusion” for seven years that it was taking investors’ money and investing it in life settlements.

Instead, SEC attorneys claim in their complaint in federal court, the company, Christian Stanley, Inc., was allegedly used by the founder, Daniel C.S. Powell, 29, to finance “stays at luxury hotels, visits to nightclubs and restaurants,” and for “purchase of high-end vehicles.”

Marc Blau, assistant director of enforcement at the SEC’s Los Angeles office, told  On Wall Street, “Christian Stanley’s actual investment in life insurance policies was de minimis at best.”

The SEC complaint alleges that since March 2009, Christian Stanley and Powell “offered and sold at least $4.5 million in unregistered securities in the form of debentures” to some 50 investors to whom they “promised to pay ‘secured and structured; annual returns ranging from 5% to 15.5%.”

The complaint further alleges, “In reality, defendants applied less than $90,000 of the amount they raised — about 2% — toward these avowed purposes, and have spent over 50% of the remaining investor fund for purposes that bear no relation to the operation of Christian Stanley’s purported business.”

The SEC claims Powell used investors’ money “for such unrelated purposes as sales commissions and Ponzi-like payments to existing note holders,” as well as to make “personal expenditures” allegedly including $21,000 toward his school loans, $5,000 for cowboy boots and “nearly $5,000 for a dating service.”

Source/Full article: onwallstreet.com/news/sec-injunction-ponzi-scheme-christian-stanley-2674981-1.html

Carole Fiedler Life Settlement Broker

Carole Fiedler, a Greenbrae, Calif., viatical and life settlement broker who operates Innovative Settlement Solutions, sued after her $180,000 fee was not paid after she gave advice on whether a $3 million policy should be sold.

She filed a lawsuit Tuesday in Marin County Superior Court in San Rafael, Calif., alleging breach of contract, breach of the covenant of good faith and fair dealing and unjust enrichment.

Fiedler, who says she’s been in the viatical/life settlement business for 19 years, said she was contacted by the insured, Shirley Seid, in June 2009 about selling her Phoenix Life Insurance Co. policy.

When she contacted her, she had been diagnosed with a terminal illness and wanted to get the money so she had control over where the proceeds would go, according to the lawsuit. She wanted to make sure her two stepsons received some of the purchase price, the suit added. Only her daughter and granddaughter were beneficiaries of her life insurance trust.

The suit said the policy had been obtained through premium financing firm BankDirect and Seid paid no premiums for the first two years. The suit said there were concerns that Phoenix would claim the policy was stranger-originated life insurance (STOLI), that Phoenix wouldn’t pay the death benefit because its rating had been downgraded, and that Phoenix would contend that the application was fraudulent.

Ultimately, BankDirect sought to take over ownership of the policy because Seid could not pay premiums. But Fiedler said she got the firm to agree to pay $450,000 to buy it. She said in her suit she also got Habersham Funding, an Atlanta-based provider, to offer $1.02 million for the policy. Seid, however, died within hours after the sales agreement with Habersham was signed, the suit said.

Phoenix then paid the death benefit to the trust, but Fiedler never received her commission, the suit said.

Source: Lawsuit/Life Settlements Report

Retirement Value CEO Richard “Dick” Gray, who authorities said repeatedly engaged in illegal sales of securities, has reached a tentative agreement to pay $650,000 in cash and property to settle claims.

The court-appointed receiver for Retirement Value LLC is recommending that a Travis County judge approve $7.7 million in payments to the “investor-victims.”

In the case of Retirement Value, regulators alleged a New Braunfels law firm served as the beneficiary of the purchased life insurance policies, while investors were “co-beneficiaries.” Investors were supposed to receive a pro-rata share of the death benefits when the insured die.

Investors were told they could expect to earn 16.5 percent annually upon maturity of the investments.

Retriement Value Life Settlements

Read more:

http://www.mysanantonio.com/business/article/Payments-possible-in-life-settlement-case-1377276.php

Life Settlement Class Action

Dallas Law Firm Heygood, Orr & Pearson Files Life Settlement Class-Action Lawsuit Against Life Partners Holdings, Inc.’s Life Partners Inc.

Dallas Law Firm Heygood, Orr & Pearson announced that they have filed a class-action lawsuit in Ellis County on behalf of Texas investors who say Waco-based Life Partners Inc. charged excessive premiums on the company’s so-called “life settlement” policies.

This is the second lawsuit Heygood, Orr & Pearson has filed against Life Partners in the past month. The first was a nationwide class action filed in Dallas County, which includes allegations that Life Partners wrongfully withheld thousands of dollars investors paid in escrowed premiums.

Life Partners, a subsidiary of the publicly traded Life Partners Holdings Inc. purchases life insurance policies from policyholders for the purpose of selling interests in those policies to groups of investors.

Source: Reuters

Provident Capital Life Settlement Fraud

The Securities and Exchange Commission yesterday slapped Provident Capital Indemnity Ltd. with a lawsuit, alleging that the company had conducted a major life settlement bonding fraud.

The firm’s president, Minor Vargas Calvo, and its outside auditor Jorge L. Castillo, were also charged in the case.

PCI, based in Costa Rica, provided the financial backstop for many life settlements and their investors. Between 2004 and March 2010, the firm issued some 197 bonds covering investments in life insurance policies with a face value of at least $670 million.

In a complaint filed in U.S. District Court for the Eastern District of Virginia, the SEC charged that the firm, along with Mr. Vargas and Mr. Casthttp://www.lifesettlementfraud.com/wp-admin/post-new.phpillo, misrepresented PCI’s ability to cover its bond obligations by inflating the value of the assets backing the bonds. The regulatory agency also claims that PCI tarted up its credit rating and made false statements about the availability of reinsurance to cover the bond claims.

Attempts to reach attorneys for Mr. Castillo and Mr. Vargas were unsuccessful. An executive at PCI noted that Provident has no relationship with the lawyers representing the pair.

The alleged fraud will no doubt roil the insurance industry. PCI’s bonds covered life settlements sold by American Settlement Associates LLC and A&O Resources Management Ltd.

The latter, whose life settlement-selling subsidiaries filed for bankruptcy in 2009, has been hit by a series of lawsuits, including a suit in federal court in Illinois by a retail investor who claimed a broker solicited him to invest about $2 million in so-called “guaranteed bonded life settlements.” And the litigation continues: Last September, the U.S. Attorney’s Office for the Eastern District of Virginia unsealed indictments against A&O’s founder, Christian M. Allmendinger, and others for conspiracy to commit mail fraud, money laundering and securities fraud, according to the SEC’s complaint. That trial is set for this spring.

The SEC called for an asset freeze on PCI, Mr. Vargas and Mr. Castillo, disgorgement of the ill-gotten funds, plus interest, a civil penalty and temporary, preliminary and injunctive relief.

PCI, Mr. Vargas and Mr. Castillo are also in hot water with the Justice Department. All three face one count of conspiracy to commit mail and wire fraud, plus three counts each of mail wire fraud. Authorities are seeking more than $40 million in forfeitures.

Both Mr. Vargas and Mr. Castillo were arrested earlier this week.

Source: InvestmentNews.com

I went to their now non-operational website and they a huge Financial Integrity logo on their site… Kinda ironic right?

Financial Integrity Logo

Scott Ross Life Settlement Scam

Scott Ross of Woodstock, Ill. was charged with three counts of mail fraud for swindling people who invested in funds he claimed to operate, according to the U.S. Attorney for the Northern District of Illinois and the FBI.

He raised about $1.9 million from about 25 investors for the Elucido Fund, which claimed to invest in life settlements, and another $3 million from about 134 investors in the Moondoggie Fund, which purported to invest in the company’s stock and its reported development of a dual-sided computer monitor.

According to the criminal information: “(T)he defendant misappropriated all of the funds invested in the Elucido Fund to, among other things, pay expenses of the Maize Fund, make Ponzi-type payments to repay investors in the Moondoggie Fund and benefit himself, including the purchase of a $75,000-per-year sky box at the football stadium of the Indianapolis Colts and the payment of a $319,000 salary to himself.”

He told investors in the Elucido Fund they could expect returns as high as 34% from investments in life settlements and viaticals, although he never purchased such contracts, the FBI said.A 42-year-old Illinois man was charged Tuesday with allegedly defrauding more than $5 million from about 150 people, including raising $1.9 million from 25 investors in a life settlement scheme, according to the FBI in Chicago.

If convicted, Ross faces up to 20 years in prison and a $250,000 fine for each count.

Source: Press

* Remember, this is on again a scam/fraud related to investment side of Life Settlements, not the side of selling your policy. Just wanted to make that clear.

7 Charged with Life Settlement Fraud

Christian M. Allmendinger, 39; Adley H. Abdulwahab, 35; and David C. White, 40, all from the Houston area, each were charged in federal court in Richmond with one count of conspiracy to commit mail fraud, six counts of mail fraud, one count of conspiracy to commit money laundering, six counts of money laundering and four counts of securities fraud.

If convicted of all charges, they face up to 20 years in prison on each count except the securities fraud counts, on which they face up to five years in prison per count.

Tomme Bromseth, 68, the Richmond area sales agent formerly from Chester who lives in Blackstone, was charged with mail fraud and structuring financial transactions to evade reporting requirements. He sold more than $3 million of A&O products to 15 investors, MacBride said.

The three executives and their representatives allegedly misrepresented to investors the company’s prior successes, its scope and size, the risk involved in its investment offerings and the use of investor funds.

They dealt in life insurance settlements. A life settlement is an investment in which a person, typically elderly or terminally ill, sells his or her life insurance policy for a cash payment, which is a percentage of death benefit — the amount paid by an insurance company when the insured dies.

A&O, founded in November 2004, bought life settlements from a wholesaler and began selling whole or fractional interests in those settlements to investors, according to the indictment. In such sales, investors typically buy the right to receive a portion of the death benefit when the insured dies.

A&O claimed it had set aside money to pay premiums. If premiums are not paid, insurance companies have no obligations to pay death benefits.

The company had insufficient funds to pay the premiums and filed for bankruptcy protection in September 2009.

Source: InsuranceNewsNet.com

The company, which offers technology and services to portfolio managers for evaluating life settlements, says it recently began evaluating portfolios for banks and institutional investors that have taken ownership of life settlement investments after loan defaults.

Track Life, Atlanta, also announced it recently secured a contract to service a multi-billion-dollar life insurance settlement portfolio.

The company was launched in 2008 by executives of the Lifeline Program, a unit of Wm. Page & Associates Inc., Atlanta.

Source: PR

I am sure they will find some shady and possible fradulant policies in some of these portfolios, I hope they will share some of their findings.

US hedge fund CarVal has walked away from a £40 million restructuring deal which would have seen 25,000 Lifemark investors repaid over a 14-year-period, according to sources close to the negotiations.

The options for Lifemark and the prospects for its investors, who put £350 million into the Luxembourg-based vehicle via Keydata, founded by Stewart Ford, have now narrowed.

Lifemark needs to secure funding through a restructuring deal or sell the life settlement policies it holds in order to bridge its severe liquidity problems.

We will continue to monitor and post updates…

Source: Citywire.co.uk – Read full article

Florida Insurance Agent Arrest

A Florida insurance agent was arrested on numerous counts of alleged fraud and grand theft in connection with a stranger-originated life insurance (STOLI) scheme involving $78 million in death benefits, according to the Florida Department of Financial Services.

Steven Brasner of Infinity Financial Group in Boynton Beach, Fla., was arrested at his office and booked into Palm Beach County Jail, according to the Financial Services department. He was arrested after an investigation by the Florida Division of Insurance Fraud and the State Attorney’s Office in Palm Beach County, Fla., the Financial Services agency said.

He allegedly submitted insurance applications to AXA Equitable Life Insurance Co. with false information on prospective insureds’ net worth and arranged for the policies to be sold on the secondary market in a STOLI scam.

A probable cause affidavit alleged that Brasner sought insurance for five seniors and said that the policies were not intended to be sold. It also alleged he earned $1.6 million in commissions on the $78 million worth of policies.

In addition to the AXA policies, the affidavit alleges that Brasner obtained another $6.5 million policy for an elderly woman with Transamerica Occidental Life Insurance Co., now known as Transamerica Life Insurance Co.

Brasner allegedly promised to pay the insureds 3% to 5% of the face value of the policies when they were sold after the two-year contestability period.

In the same case, AXA previously sued Brasner and others in June 2008 for alleged fraud in U.S. District Court for the Southern District of Florida.

Source: Press