World
US insurance schemer pleads guilty to fraud and identity theft

Joseph Caramadre made a profit dealing in insurance products that paid out when someone died. He said he paid the terminally ill to participate, creating win-win deals. Now, he's pleaded guilty to fraud and identity theft

In a trial closely watched by the insurance industry, Rhode Island attorney Joseph Caramadre and his former employee Raymour Radhakrishnan pleaded guilty today to charges that they conspired to steal the identities of the terminally ill.

 

ProPublica wrote about Caramadre's scheme last August in "Death Takes a Policy." He recruited the terminally ill to sign up for products such as variable annuities and bonds that, upon the death of participants, could pay out handsome benefits to Caramadre, his family members and outside investors. Acting on Caramadre's behalf, Radhakrishnan signed up the people whose deaths would trigger the benefits.

 

In interviews with ProPublica before the trial, Caramadre described the scheme as a win-win. Caramadre or his investors put up the money and reaped the reward, but he paid the terminally ill several thousand dollars or more to participate. They themselves usually could not afford the annuities and bonds he purchased. In Caramadre's view, he was offering money to the needy that they had not expected to receive. Some family members of the terminally ill agreed, while others felt exploited.

 

The two men pleaded guilty to identity theft and wire fraud, two counts in a 66-count indictment a grand jury returned against them last year. As part of the plea deal, prosecutors will not ask for more than 10-year sentences for each man. Ultimately, it will be up to the judge's discretion how much prison time they receive. Sentencing is scheduled for Feb. 8.

 

As part of the plea agreement, Caramadre and Radhakrishnan agreed that the object of the scheme was to defraud the insurance companies and bond issuers. The two men did so by obtaining the identity information of terminally ill individuals through false explanations as to why their signatures were required. They also took steps to prevent the terminally ill from understanding the documents they were signing. In some cases, the signers never even saw the full documents to which Caramadre attached their signatures.

 

As part of the bond purchasing part of the scheme, the two men opened a brokerage account with T.D. Ameritrade. They transferred $280,000 into the account, which constituted wire fraud, according to the plea agreement.

 

"This is a significant case of identity theft on a grand scale," says Jim Martin, a spokesman for the United States Attorney in Rhode Island.

 

In remarks outside the court house, U.S. Attorney Peter Neronha told the Associated Press that "today's message is that greed is not good."

 

A spokesman for Caramadre released a statement that he "has made a decision that acceptance of this plea agreement is in his best interests and the best interests of his family."

 

The plea agreement came unexpectedly on the second week of a trial that was expected to last for months.
 

Courtesy: http://www.propublica.org/

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Visa, MyUS.Com tie up to facilitate buying from US stores

The partnership enables Visa cardholders to access online deals from US stores and to pay with their card

New Delhi: Visa Inc and MyUS.com have joined hands to facilitate purchases from US stores by overseas consumers, reports PTI.

 

MyUS provides access to US stores for international customers through its personal shipping service.

 

The partnership enables Visa cardholders to access deals and to pay with their card, a company release said.

 

"Online shopping has opened up the global marketplace, the ability to buy from top US brands and have the goods delivered in over 200 countries is a very attractive proposition to consumers," Visa's Head of eCommerce Solutions for Asia Pacific, Central Europe, Middle East and Africa, Paul Jung said.

 

Commenting on the development, MyUS.com Chief Financial Officer Michael Chalhub said: "As the holiday season approaches, we're pleased to be able to offer our customers the ability to pay with their Visa card as they enjoy savings on their favorite US brands".

 

Visa cardholders can now enjoy privileges including the waiving of membership fees for two years, a saving of 25% in the first month, 20% on future shipments and $100 free insurance, a press release said.

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LIC allowed to buy up to 30% equity in a company

The new norms will enable the cash-rich LIC, which invests around Rs50,000-Rs60,000 crore in equity annually, to pick up higher equity in state-owned companies during the disinvestment process

New Delhi: Hard pressed to meet the Rs30,000 crore disinvestment target, the Finance Ministry has permitted state-owned Life Insurance Corp of India (LIC) to invest up to 30% in a company as against the earlier ceiling of 10%, reports PTI.

 

"LIC can invest up to 30% of a company's paid-up capital. Earlier it could invest up to 10%," Financial Services Secretary DK Mittal told reporters.

 

The notification relaxing investment norms for LIC has been issued, he added.

 

The new norms will enable the cash-rich LIC, which invests around Rs50,000-Rs60,000 crore in equity annually, to pick up higher equity in state-owned companies during the disinvestment process.

 

The Insurance Regulatory and Development Authority (IRDA), however, was against LIC picking up more than 10% equity in a company. It wanted LIC to stick to the norms applicable for private insurers.

 

The government's decision is apparently aimed at pushing through the disinvestment process which had so far remained a non-starter.

 

The government in the budget for 2012-13 had proposed to raise Rs30,000 crore from stake sale in public sector units (PSUs).

 

Finance Minister P Chidambaram in a recent interview to PTI had expressed the confidence that government would endeavour to be as near the target as possible.

 

The government proposes to sell equity in several state-owned companies like Nalco, Hindustan Copper, SAIL, BHEL, MMTC and Oil India Ltd (OIL). It is also planning to sell residual equity in companies privatised earlier.

 

In view of the subdued tax collection and subdued revenue realisation, the Finance Ministry had raised the fiscal deficit target for the current fiscal to 5.3% of the Gross Domestic Product (GDP) from 5.1% estimated earlier.

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COMMENTS

Nilesh KAMERKAR

4 years ago

Can we call this is RGESS - II; using people's money (Insurance premium amount paid to LIC)for meeting divestment targets.





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