Federally Indicted Estate Planning Attorney Pleads Guilty

Attorney Jospeh Caramadre and his associate Raymour Radhakrishnan were to be tried for a scheme of defaruding dying individuals and make more than $15 million.  On November 20, 2012 they admitted in the U.S. District Court in Rhode Island that they had committed wire fraud and conspiracy. The guilty pleas were entered as part of a packaged agreement.

In exchange for the pleas, the U.S. Attorney's Office will recommend that the court give the two men prison terms of no longer than 10 years. Each faced a maximum sentence of 25 years in prison and $500,000 in fines.

As reported by Darla Mercado for InvestmentNews:

" From 1995 through 2010, Mr. Caramadre created a strategy for investors that involved using variable annuities and naming a terminally ill person as the annuitant. Once the annuitant died, the investor received the death benefits, as well as a guaranteed return of the principal and other enhancements.

“The insurance companies collectively lost millions of dollars from defendants' submission of variable annuities utilizing terminally-ill annuitants,” authorities noted in a court document stating the facts of the case. Some 20 carriers were involved, including Metropolitan Life Insurance Co., Western Reserve Life Insurance Co. and Transamerica Life Insurance Co.

The lawyer also offered “death put bond” strategies. Those involved assigning a sick person as a co-owner on the bond, along with an investor, who then profited when the co-owner died.

Federal authorities said that from July 2007 to August 2010, Mr. Caramadre and Mr. Radhakrishnan conspired to commit mail, wire and identity fraud.

The pair “concealed from the terminally-ill individuals and their family members that their identities would be used on annuities and bonds that were purchased by Caramadre and others,” authorities said. "

Here is the FBI's new release:  click here

The FBI says:  "According to court documents, Caramadre located terminally ill individuals in various ways, including by visiting AIDS patients at a House of Compassion in Cumberland, Rhode Island, by locating family members and associates who were terminally ill, and by soliciting individuals who were terminally ill to purchase small life insurance policies.

According to court documents, Caramadre placed an advertisement in a local Catholic newspaper that provided that there was a compassionate organization that would immediately give $2,000 in cash to terminally ill individuals. Dozens of terminally ill responded to the ad. Caramadre gave Raymour Radhakrishnan, who began working for Caramadre in July 2007, the job of meeting with the people who responded to the ad for the purpose of obtaining their identity information and using that information on annuities and brokerage accounts.

According to court documents, Caramadre and Radhakrishnan made misrepresentations to terminally ill and elderly patients and their family members in order to obtain their personal identity information. They used the information, including names, dates of birth, and Social Security numbers, to obtain more than 200 variable annuities and to open more than 75 brokerage accounts in order to purchase death-put bonds in the victims’ names without their knowledge and consent. Caramadre and Radhakrishnan either forged the signatures of terminally ill people on account documents or obtained the signatures by means of misrepresentations. When the terminally ill person died, Caramadre and others reaped substantial profits by exercising death benefits associated with the investments."

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