July | 2007 | Life Settlement News

July 17, 2007 by Administrator

Fraud defendants plead guilty, agree to pay $826 million

MIAMI — 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.

Kohler also pleaded guilty to one count of perjury in connection to false testimony given during a deposition in a civil action brought by the Securities and Exchange Commission, the U.S. Attorney’s Office said.

Under the plea agreement, Khan and Ziegler agreed to jointly reimburse investors $826 million. Kohler, because she joined the conspiracy later, agreed to share in the reimbursement of $471 million of the total $826 million. Each defendant also faces up to five years in prison at a Sept. 25 sentencing hearing.

Kohler was the chief financial officer of MBC, which was closed by federal regulators in May 2004, authorities said. Khan served as president of another company that performed alleged fraudulent services for Kohler. Ziegler was an MBC attorney.

Authorities allege the three schemed to sell investment interests in life settlements. According to authorities, the process involves an investor purchasing an interest in the life insurance policy death benefit of a terminally ill or elderly person. When the insured person dies, the investor sees a profit if the policy benefit is greater than the price paid for it.

The U.S. Attorney’s Office said MBC sales agents “fraudulently induced investor participation in MBCs offering by promising investors ‘safe’ investments in ‘secure’ life insurance policies.”

In addition, the defendants were accused of engaging in deceptive business practices, using investor funds for personal expenses and deceiving regulators about MBC’s management.

Ziegler’s attorney, Fred Haddad, said his client acknowledged guilt to avoid a trial and the possibility of receiving a longer prison sentence.

“Does my client have $800 million? Of course not,” Haddad said. “They’ll get what they can.”

Telephone messages left Tuesday by The Associated Press for Khan’s and Kohler’s
attorneys were no immediately returned.

Source: AP

Other related Viatial Fraud Posts:
Accountants Settle Mutual Benefits Claims
Grifters Fined $5m for Viatical Scam

Accountants settle Mutual Benefit claims

July 10, 2007 by Administrator

The insurance carrier for Miami’s Spear Safer CPAs & Advisors has agreed to pay $3.5 million to the court-appointed receiver of Mutual Benefits to settle allegations the accounting firm was negligent in its audits of the viatical and life settlement company.

M. Glenn Spear, Spear Safer’s managing partner, said his firm did nothing wrong.

”We did our job and we did it properly,” Spear said. “We don’t believe the case had any merit. Our insurance carrier chose to settle for other reasons.”

Receiver Roberto Martinez’s lawsuit against Spear Safer was set to have gone to trial on Monday. The settlement requires the approval of a federal judge.

Federal authorities allege Mutual Benefits defrauded some 30,000 investors out of about $830 million in the sale of life insurance policies.

More Viatical Information:
Viatical Settlement
Viatical Fraud

Boston Ventures and Genstar Capital Invest in 21st Services

July 1, 2007 by Administrator

Boston Ventures and Genstar Capital Invest in 21st Services

BOSTON & SAN FRANCISCO–(BUSINESS WIRE)–Genstar Capital, LLC and Boston Ventures announced today a majority investment in 21st Services, in partnership with management. The Minneapolis, Minnesota based Company is a leading provider of mission critical, life expectancy information that is currently used in the life settlement industry, the secondary market for life insurance, and with new applications planned to be launched in coming years.

21st Services currently supplies life expectancy estimates on seniors to brokers, providers and investors, as they determine the valuation for a policy. Using a proprietary diagnostic software model, the Company provides consistent, reproducible life expectancies using mortality tables coupled with numerous risk factors that impact mortality. Its customers are the providers who arrange the funding and bid on policies on behalf of investors, the brokers who sell the life policies, and the investors who fund the policies.

21st Services was founded in 1998 by three individuals, Paul Kirkman, Robert Simon and Steven Walker, all of whom will remain significant shareholders and active managers of the Company. Jack Kettler, who formerly ran the life insurance division of CNA Insurance, will be named CEO of the Company. In addition, Dennis Chookaszian and Robert Dowdell, seasoned industry executives, will participate in the transaction and will join the Board of Directors. Dennis, formerly Chairman and CEO of CNA Insurance, founded Viaticus, the first institutionally funded purchaser of life settlements. “This partnership will provide 21st with additional capital and expertise that will enable us to provide even greater value to our customers and offer significant growth opportunities to our staff,” commented Steven Walker.

Ryan Clark, a Vice President of Genstar, commented, “Because of the many benefits to
policy holders and investors, the life settlement industry is rapidly growing, and we believe that 21st Services is one of the leading providers in the category with a proprietary methodology that differentiates it from its competitors. The life settlements market will continue to mature and expand, and 21st is best positioned to provide independent, consistent, and reliable life expectancy estimates to the marketplace.”

Matt Kinsey, a Principal of Boston Ventures, said, “21st Services; market position is impressive, and its services are highly valued by its customers. We look forward to working with management and our partners to capitalize on 21st Services’ experience, reputation and customer relationships to develop new service offerings. This opportunity fits with Boston Ventures’ strategy of investing in quality, high potential, information businesses that serve growing markets.”

About Boston Ventures

Boston Ventures Management, LLC (www.bostonventures.com) is a private equity firm
that has been an active investor and financial partner to management teams in the media, entertainment, publishing and information and communications sectors since 1983, earning the firm a franchise position in the private equity community. Boston Ventures’ general partners and principals are accomplished and experienced professionals who have a diverse and complementary range of skills and a broad network of domestic and international relationships. Since its inception, Boston Ventures has invested approximately $2.4 billion in its targeted industries. The firm is currently investing its seventh fund.

About Genstar Capital

Based in San Francisco, Genstar Capital (www.gencap.com) is a private equity investment firm that makes leveraged investments in quality middle-market companies. Genstar Capital works in partnership with management to transform its portfolio companies into industry-leading businesses. With more than $3 billion of committed capital under management and significant experience investing in businesses, Genstar focuses on selected segments of life science and healthcare services, industrial technology, business services and software services.

About 21st Services

21st Services (www.21stservices.com) was created in 1998 with the goal of creating a
new standard of service for the life settlement industry. To accomplish this goal, 21st Services produced the first-ever software program available to the life settlement industry for evaluating life expectancies for impaired senior insured individuals. This innovative product helped transform the evaluation process from a subjective “guess” to a more objective, consistent methodology. Since then, 21st Services has continued to innovate and refine the evaluation process. Based in Minneapolis, Minnesota, the company offers quality diagnostics through a network of consulting physicians and cutting-edge proprietary software that provides industry-leading senior diagnostics. The three founding principals of 21st Services have more than 35 years experience combined in life expectancy evaluation, insurance underwriting, post-purchase portfolio management, and compliance.