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Estate Planning Scheme Targeted Terminally Ill

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FBI logoThe FBI has issued a statement regarding a “despicable scheme” of “stealing identities of terminally ill individuals to fraudulently obtain millions of dollars from insurance companies and bond issuers.”

In November, attorney Joseph Caramadre and his employee Raymour Radhakrishnan pled guilty to conspiracy to commit identity theft and wire fraud. According to the FBI, Caramadre used variable annuities and death put bonds in the scheme:

In addition to buying annuities from insurance companies listing terminally ill individuals as annuitants, he also purchased bonds of distressed companies for significantly below face value listing terminally ill individuals as “co-owners.” When the terminally ill person died days or weeks later, he would exercise the death benefits associated with the investments.

Caramadre reportedly lied to terminally ill patients in order to get them involved in “profit-sharing agreements” in which he kept a large portion of the profits for himself. In addition to having victims sign documents that were not what they thought they were signing and obtaining signatures to forge later, the pair also compiled many types of personal information from Social Security numbers to driver’s license numbers and used it to funnel money into their own pockets.

Particularly disturbing is how Caramadre located victims, such as through visiting AIDS facilities and placing advertisements in a religious newspaper.

For his part, Radhakrishnan visited patients to determine their “eligibility” for the program; that is, Caramadre was only interested in those with six months or less to live in order to maximize profits.

The scheme, which began in 1996 and ran until 2010, came to light when some insurance companies and brokerage firms filed complaints and the FBI among other governmental branches, including the IRS, began investigating.

This story reminds us to be sure to ask plenty of questions whenever presented with money-making opportunities, especially if something seems to be good to be true — because it often is.

Read more at the FBI website.

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December 30th, 2012 at 5:54 am

Posted in Estate Planning

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