Frank A. Rubino, ESQ.

FEDERAL AND INTERNATIONAL CRIMINAL DEFENSE

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Florida Pair Add Insurance Fraud to Their Resumés

The Fort Lauderdale brothers who were charged under a large investment fraud investigation in 2008 are now facing additional charges. The latest white collar crime allegations involve using dummy corporations to defraud insurance companies of millions of dollars. The latest fraud is alleged to have continued even after the investment fraud indictment was handed down. Both brothers are currently being held at the Federal Detention Center in Miami.

Multiple accusations have plagued the two men since the initial indictment for investment fraud. Those allegations stemmed from the brothers' practices in buying and selling viatical insurance policies, in this case specifically insurance policies held by AIDS sufferers. The brothers would buy or broker the purchase of these life insurance policies at a discounted rate from the policy holders. The fraud involved misrepresentations about the life expectancy of the policy holders and therefore the value of the policies themselves.

The latest charges involve the brothers obtaining insurance coverage through the use of shell companies and billing those carriers for services that should not have been covered. Roughly $3 million in medical costs were shifted in this way as the brothers submitted claims as employees of the shell businesses.

The latest charges may be the least of the brothers' worries. The investment fraud allegations concerned more than $1.25 billion in fraudulent gains. In addition, the brothers brokered a deal about another fraud scheme in exchange for information regarding the alleged activities of Alan Mendelsohn. The investigation into Mr. Mendelsohn did not yield the results investigators were likely hoping for. The brothers may find prosecutors to be less cooperative this time around. All the charges facing the brothers carry stiff penalties, including extensive time in federal prison, if convicted.

Source: The Orlando Sentinel, "Indicted Fort Lauderdale brothers facing new federal fraud charges," by Jay Weaver, 1 March 2012

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