March 29--The last of 13 people charged in a $1.25 billion insurance fraud scheme has been convicted, U.S. Attorney Wifredo A. Ferrer announced Friday.
Joel Steinger pleaded guilty in federal court in Miami to charges of conspiracy to commit mail and wire fraud for deceiving some 30,000 investors. Despite a criminal record, Steinger hid behind a figurehead executive to secretly operate Mutual Benefits Corp., which marketed viatical and life insurance settlements, prosecutors said.
As the head of MBC, Steinger and co-conspirators Steven Steiner, Michael McNerney, Anthony M. Livoti Jr. and others raised more than $1.25 billion from investors before being shut down by federal regulators in May 2004. By the time charges were filed in December 2009, investor losses were estimated at more than $800 million, according to trial evidence.
Between 1994 and 2004, MBC purchased life insurance policies from people with AIDS, the chronically ill and seniors. MBC sold shares of insurance policy death benefits, known as viatical settlements, promising a fixed rate of return with low risk, evidence showed.
New investor money was used to pay premiums on life insurance policies purchased by earlier investors and to pay investors who requested their money back. The Ponzi-like scheme eventually collapsed, prosecutors said.
Steinger is scheduled to be sentenced June 6, officials said.
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