NEW YORK, May 2 /PRNewswire/ — 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.
Ritchie Capital is seeking damages of $700 million against Coventry First. Under the Federal RICO Act, these damages could be three times the actual damages established at the trial and potentially amount to more than $2 billion.
“This is one of the first lawsuits in the life settlements industry to expose companies like Coventry First which defrauded both policy owners and investors to maximize its profits,” stated Thomas Puccio, legal counsel for the plaintiffs. “We intend to pursue Coventry First to the fullest extent of the law.”
Beginning in 2005, Ritchie Capital negotiated an arrangement with Coventry First to invest in life insurance products. Ritchie Capital not only conducted due diligence on Coventry First, but also relied on the company because of its experience and reputation for integrity in the industry.
“Coventry First participated in numerous racketeering activities and fraud, such as bid rigging and concealing both unlawful conduct and an investigation by the Attorney General of New York, unbeknownst to Ritchie Capital,” added Puccio. “Had Ritchie Capital known that Coventry engaged in these illegal practices, it would have never done business with the company.”
About Ritchie Capital
Ritchie Capital is a diversified alternative asset management firm established in 1997 with interests in hedge funds, private equity, venture capital, insurance, energy and real estate and with offices in Geneva, IL, New York, Bermuda, and Menlo Park, CA.
Source: PRNewswire
