Securitized Life Insurance Fraud Scheme - $400M Demand

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The Coventry Group sold securitized life insurance polices for hundreds of millions of dollars "through a pattern of bribes, bid-rigging, fraud, and falsification of documents" in 45 states, Ritchie Risk-Linked Strategies Trading says in a $400 million demand in Federal Court.
Coventry has been sued for this by the attorney general of New York and the Florida Office of Insurance Regulation, according to the complaint.
Ritchie claims Coventry, a buyer and seller of securitized life insurance policies in the secondary market, fabricated documents, falsified documents, paid kickbacks, and violated securities laws across the country.
"In approximately October 2006, plaintiffs learned that many if not all the life insurance policies they had purchased from LST likely had been purchased by defendants in violation of federal, state, and local law and regulations," according to the complaint. "Plaintiffs learned at the same time that there had been proceedings by government agencies threatened against or affecting defendants that could adversely affect plaintiffs' possession of clean and unencumbered title to the policies, contrary to the representations and warranties contained in the MPPAs."
Defendant LST I is a wholly owned subsidiary of defendant Montgomery Capital, and an alter ego of the Coventry Group, according to the complaint. Ritchie claims Coventry and Montgomery are "under common control with the other defendants."
According to the complaint, "Coventry First is a buyer in the secondary market for life insurance policies. It entered the market as a buyer in 2001, and by 2005 it or its affiliates had purchased 1,138 life insurance policies representing more than $3 billion in death benefits."
Ritchie is represented by Jeffrey Liddle with Liddle & Robertson.
Attached to the 22-page complaint are 58 pages of attachments, including then-Attorney General Eliot Spitzer's colorful 33-page complaint against Coventry and Montgomery in New York County Court, filed in October 2006; and the Florida Office of Insurance Regulation's 18-page "Notice and Order to Show Cause" of May 2007.

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