Man pleads guilty in life-insurance scheme [Richmond Times-Dispatch, Va.]

Sept. 17--RICHMOND, Va. -- A Richmond-area figure in a scam that authorities say fleeced 800 investors in the U.S. and Canada out of $100 million pleaded guilty to charges of mail fraud and money structuring in federal court here yesterday.

Tomme Bromseth, 68, now of Blackstone but formerly of Chesterfield County, is facing up to 25 years in prison when sentenced Jan. 7 by U.S. District Judge Robert E. Payne. He pleaded guilty under the terms of an agreement calling for his full cooperation with prosecutors, including possible testimony.

Bromseth was the Richmond-area sales representative of A&O Resource Management in Houston and sold more than $3 million in "products" to 15 investors from July 2006 to November 2007.

Last week, the U.S. attorney's office in Richmond charged three executives of A&O and four other people, including Bromseth, in connection with the fraud.

Authorities say that the executives spent tens of millions of dollars to fund a lavish lifestyle, buying exotic cars, a 5.6-carat diamond ring, a diamond Cartier watch and a Steinway grand piano.

Bromseth quietly admitted his guilt before U.S. Magistrate Judge Dennis Dohnal yesterday afternoon. In court papers, he admitted that in one typical case he falsely told an unidentified, potential client -- who invested $600,000 -- that he was a registered investment adviser, that the investment was risk-free and that it would pay an annual return of between 10 and 12 percent.

His commission on that deal was $252,000. Bromseth also admitted structuring a financial transaction in April 2009 to avoid federal reporting requirements. He told Dohnal yesterday that he is unemployed.

The government did not object to Bromseth remaining free pending his sentencing.

The victims included elderly retirees who in some cases lost most if not all of their life savings.

The company dealt in life insurance settlements -- 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 the amount paid by an insurance company when the insured dies.

A&O 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.

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

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

Contact Frank Green at (804) 649-6340 or fgreen@timesdispatch.com.

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