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Category: Life Settlements

Federal Appeals Court Affirms Conviction In Case Arising From Viatical Ponzi Scheme

Federal Appeals Court Affirms Conviction In Case Arising From Viatical Ponzi Scheme

The Eleventh Circuit Court of Appeals last week affirmed the criminal conviction of an attorney who had been involved in a viatical company’s Ponzi scheme. The federal appeals court affirmed the conviction of Anthony Livoti, outside counsel for Mutual Benefits Corporation, concluding that the federal government had presented sufficient evidence for the jury to convict him of two counts of mail fraud, conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering.  He had appealed his conviction,…

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Federal Appeals Court Revives Life Settlements Claims, On Both Sides Of Lawsuit

Federal Appeals Court Revives Life Settlements Claims, On Both Sides Of Lawsuit

A federal appeals court revived claims on both sides of a disputes over a life settlements transaction. In an opinion released last week, Sun Life Assurance Co. of Canada v. Imperial Premium Fin., LLC, Nos. 17-10189, 17-10415 (11th Cir. Sept. 18, 2018), the 11th Circuit Court of Appeals reversed a U.S. District’s Court’s rulings, and is now allowing both the insurer and the life settlements company to proceed with previously-dismissed claims. Summarizing the ruling, the 11th Circuit Court of Appeals…

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Attorney Reportedly Opposes Penalties Following Magistrate’s Recommendations In Life Partners Litigation

Attorney Reportedly Opposes Penalties Following Magistrate’s Recommendations In Life Partners Litigation

A news report says that the lawyer for a bankrupt life settlement company has filed papers opposing penalties against him following a magistrate’s ruling in a long-running legal dispute. Says Law360: “The former top lawyer for bankrupt life settlement trader Life Partners Holdings Inc. urged a federal judge in Texas to reject a report and recommendation from a magistrate judge that he be held liable for the ‘bad actions’ of the company’s former CEO, who was found liable for securities violations.”…

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Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

The Wall Street Journal recently reported that Future Income Payments, LLC, has apparently collapsed and left investors “stranded.” In an article published July 24 (here), the Journal last month said that the company “appears shut” and the man who ran it, Scott Kohn, has disappeared. The Journal said that Kohn was a  “64-year-old felon” who “ran a company from a Nevada strip-mall mailbox” and that investors now say the company “took them for more than $100 million in losses.” Said…

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Federal Appeals Court Affirms Restitution Order for STOLI Investors

Federal Appeals Court Affirms Restitution Order for STOLI Investors

A victim of a crime “may not be denied restitution simply because the victim had greedy or dishonest motives, so long as the victim’s intentions were not in pari materia with” the criminal defendant who had been convicted of crimes relating to a stranger-originated life insurance (STOLI) scheme. That’s the way this JD Supra writer put it, describing a decision last month from the Second Circuit Court of Appeals to affirm an order of restitution in U.S. v. Quatrella, 17-1786-cr,…

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Texas Appeals Court Affirms Decision Turning Away Viatical Investor’s Claims

Texas Appeals Court Affirms Decision Turning Away Viatical Investor’s Claims

A Texas court of appeals yesterday affirmed a trial court’s decision rejecting claims, by an investor in viaticals, against life insurance agents who procured more than $70,000,000 worth of life insurance policies – investments that resulted in losses of more than $3 million. In Jessen v. Duvall, No. 14-16-00869-CV, 2018 Tex. App. LEXIS 1369 (Tex. Ct. App. Feb. 22, 2018), the Texas Court of Appeals, Fourteenth District (Houston), held that the investor had standing to bring claims that included fraud and…

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Claims Against Viatical Company Dismissed, Claim against Agent Survives In Lawsuit Over Deal Where – 20 Years After $20,000 Investment – Viators Are Still Alive

Claims Against Viatical Company Dismissed, Claim against Agent Survives In Lawsuit Over Deal Where – 20 Years After $20,000 Investment – Viators Are Still Alive

And, as if on cue given the U.S. News & World Report story (here) about how investors run a serious risk if an insured lives longer than expected, a federal court in New York issues a ruling in a lawsuit involving a 1998 viatical investment. “Nearly twenty years later, the viators are still alive, and plaintiff is without any return on his investment,” said the court in Amberger v. Legacy Capital Corp., 17 Civ. 532(NRB), 2017 U.S. Dist. LEXIS 171816…

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Life Settlements As ‘Morbid’ Investments: ‘An Asset and A Liability’

Life Settlements As ‘Morbid’ Investments: ‘An Asset and A Liability’

A U.S. News and World Report article about life settlements includes a warning from an A.M. Best managing director of insurance-linked securities about how “A life settlement isn’t just an asset; it’s an asset and a liability.” The most significant risk to investors, the article indicates, “is that the insured lives longer than expected and investors end up paying more in premiums than they receive from the death benefit.” The article, “The Morbid Niche of Life Settlement Funds” by Coryanne…

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New York Times: Life Settlements Businesses No Longer Targeting Only the Very Affluent

New York Times: Life Settlements Businesses No Longer Targeting Only the Very Affluent

A New York Times article says that life settlements industry industry, “which previously targeted the very affluent, has begun courting middle class” life insurance policy owners. The article provides a first-hand account of obtaining a quote, as well as commentary about the business, and also points out that – in response to questions about life settlement business practices, such as undisclosed broker commission rates – “43 states have adopted life-settlement regulations, usually requiring that companies be licensed and consumer disclosures.”…

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Life Partners Bankruptcy Provides Litigator with Strange Day in Court

Life Partners Bankruptcy Provides Litigator with Strange Day in Court

Law360 publishes a regular series of articles about lawyers’ unusual or interesting experiences.  Last month, the publication ran a piece entitled “My Strangest Day In Court: The Life Partners Bankruptcy”, by Texas attorney Joseph Wielebinski.  Among his observations were the following: In 1992, Life Partners Inc. (LPI) began developing a multilevel marketing network to sell a life insurance derivative known as a ‘viatical.’  . . . . These life insurance products essentially pit investors against life insurance companies.  The investors…

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