Mutual Benefits Corporation
Mutual Benefits Corporation was a Ft. Lauderdale, Florida based investment sales company that operated a huge ponzi scheme selling viatical settlements, with investors losing an estimated $835 million. The principal ring leader of the scam was Joel Steinger.
Joel Steinger
[edit]Steinger was born in Brooklyn, New York in 1949. In the 1970's Steinger moved with his family to Florida and in later life became acquainted with the mobster Meyer Lansky after Steinger's brother redecorated Lansky's house. Eventually, Steinger married the daughter of a Miami banker who was an alleged associate of Lansky. After working at his father-in-law's import/export business, Steinger set up a boiler room operation selling fraudulent commodity options. The scheme resulted in a conviction for fraud and a lifetime ban from the securities industry. However, this conviction did not stop Steinger. Steinger continued to run a variety of investments scams from oil wells to diet pizza. In 1994, Steinger set up the Mutual Benefits Corporation. [1]
Criminal enterprise
[edit]Mutual Benefits Corp. was started by Joel Steinger (aka Joel Steiner), who listed himself as a consultant to the company because he had a criminal background and had been barred by the Securities and Exchange Commission from trading securities. The company purchased life insurance policies at a discount from people with AIDS, cancer, terminal illnesses or who were elderly. They then sold participation shares of the policies' death benefits to investors, promising high returns. The company operated from October 1994 to May 2004, selling $1.25 billion worth of life insurance policies to 30,000 investors. Officials of the company lied about the life expectancy of the policyholders to the investors, bribing a doctor to sign off on their statements. It operated as a ponzi scheme, using new investors money to pay premiums on older life insurance policies, pay a return to earlier investors, and provide lavish salaries and benefits for the company's owners. Mutual Benefits Corp. was shut down by the SEC in 2004.[2][3]
Prosecution and conviction
[edit]There were 13 people involved with the company who were either convicted or pled guilty. Joel Steinger received a 20-year prison sentence in 2014 after pleading guilty to conspiracy to commit mail and wire fraud. Co-founder and vice president Steve Steiner (the brother of Joel Steinger) pled guilty in one case and was convicted in another case and sentenced to 15 years in prison. Attorney Anthony Livoti Jr., the trustee for the investment accounts, was convicted in December 2013 and sentenced to 10 years in prison for conspiracy to commit fraud and money laundering, Attorney Michael McNerney pleaded guilty and received five years in prison. Peter Lombardi, the company's president, was sentenced to 20 years in prison.[4][5] Dr. Clark Mitchell was sentenced to 10 years in prison.[6] Another of the Steinger brothers involved in the company, Leslie Steinger, died in 2008 before he could be tried.
Media
[edit]The ponzi scheme was featured on the CNBC television program American Greed in October 2015 entitled "Friends Without Benefits."[7]
References
[edit]- ^ moneyweek.com
- ^ "Mutual Benefits Corp., et al.: Lit. Rel. No. 18698 / May 6, 2004". www.sec.gov.
- ^ "Joel Steinger and Mutual Benefits Corp. Stole a Billion Dollars by Peddling Bogus Life Insurance Policies". New Times Broward-Palm Beach. 2009-06-04. Retrieved 2017-08-12.
- ^ "Former Mutual Benefits Corporation Head Sentenced To 20 Years In Prison For His Role In $1 Billion MBC Scheme". www.justice.gov. 2015-03-12.
- ^ "South Florida mastermind of $1 billion-plus swindle sentenced to 20 years in prison". Miami Herald. 2014-08-29. Retrieved 2017-08-12.
- ^ "Physician pleads guilty in massive securities fraud - tribunedigital-orlandosentinel". Orlando Sentinel. 2006-12-28. Retrieved 2017-08-12.
- ^ CNBC Prime (20 October 2015). "Brothers Steal Millions from Mutual Benefits - American Greed" – via YouTube.