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It's Happening Again (We've Got Another Schiavo, Starving In GA, No Brain-Damage)
Media Release | 4-6-05 | The Family of Mae Magouirk

Posted on 04/07/2005 2:59:57 AM PDT by schmelvin

For Immediate release! To: All media, and supporters of life. From: The Family of Mae Magouirk Date: April 6, 2005 Contact: Kenneth Mullinax -

Shiavo case revisited in Georgia

Mae Magouirk…not comatose …not vegetative …not terminal

Why is Hospice LaGrange, Ga. withholding nourishment?

(LaGrange, Georgia) Mae Magouirk is being withheld nourishment and fluids and the provisions of her Living Will are not being honored at the Hospice-LaGrange, (1510 Vernon Street, LaGrange “Troup County” Georgia, 706-845-3905) a subsidiary of the LaGrange Hospital in LaGrange Georgia. Her family is desperately seeking to save her life before she dies of malnourishment and dehydration.

Mae Magouirk IS NOT comatose and she IS NOT vegetative. She is not terminal!

Despite these facts the Hospice and Beth Gaddy, a school teacher at LaGrange’s Calloway Middle School and granddaughter of Mae Magouirk have been denying her proactive nourishment or fluids (via a nose administered feeding tube or fluids via an IV) since March 28 without prior legal consent; against the wishes of her Living Will and against the wishes of Mae Magouirk’s closest living next of kin. Mae Magouirk’s next of kin are: Mr. A. B. McLeod (Her Brother) and Mrs. Lonnie Ruth Mullinax (Her sister) both of nearby Anniston, Alabama.

Under Georgia law, unless a medical durable power of attorney is in place, your closest living next of kin are stipulated to make all medical decisions. When Mae Magouirk’s closest living next of kin lodged a complaint with Hospice LaGrange’s in-house attorney Carol Todd last Thursday, March 31, Ms. Todd checked Mae Magouirk’s case file and upon examination of both documents discovered that Beth Gaddy DID NOT have the durable medical power of attorney for Mae Magouirk and upon closer examination of Mae Magouirk’s Living Will ascertained that fluids and nourishment were ONLY TO BE WITHHELD if she was either comatose or vegetative. SHE IS IN NEITHER STATE!!!

Nor is Mae Magouirk terminally ill. Her local LaGrange, Ga. cardiologist, Dr. James Brennan and Dr. Raed Aqel, a highly acclaimed interventional cardiologist at the nationally renowned University of Alabama-Birmingham Medical Center have determined that Mae Magouirk’s aortic dissection is contained and not presently life threatening.

Two weeks ago, Mae Magouirk’s aorta had a dissection and she was hospitalized in the LaGrange Hospital in LaGrange, Ga. Her aortic problem was at first determined to be severe and she was admitted in the intensive care Unit. Her granddaughter, Beth Gaddy, a teacher at the Calloway Middle School in LaGrange, stated that she held Mae Magouirk’s medical power of attorney and thus invoked said powers against the wishes of Mae Magouirk’s closest living next of kin by having her moved to Hospice-LaGrange. While at Hospice-LaGrange, Beth Gaddy stated that her wishes were for no nourishment for Mae Magouirk via a feeding tube or fluids via an IV. Before hospitalization Mae was lucid and never had been diagnosed with dementia as was testified to in Probate Court on Monday, April 4, by a local MD.

Page Two Mae Magouirk is being starved to death!

Upon learning from Hospice-LaGrange that Mae Magouirk was being denied nourishment and fluids and upon being told by Carol Todd (Hospice LaGrange’s in-house legal consul) that Beth Gaddy DID NOT HAVE THE PROPER LEGAL AUTHORITY to deny said nourishment AND that the denial of nourishment went against Mae Magouirk’s Living Will, Mae’s family (Mullinax/McLeod) ordered the immediate beginning of such nourishment/fluids for Mae to Hospice via Carol Todd.

First Contact with Hospice on Thursday, March 31 Carol Todd told Mrs. Lonnie Ruth Mullinax (Mae Magouirk’s sister) and Kenneth Mullinax (Mae Magouirk’s nephew) via phone on Thursday, March 31 that Georgia Law stipulated that Mrs. Mullinax and her brother A. B. McLeod (Mae Magouirk’s brother) were entitled to make any and all decisions for Mae Magouirk. Mrs. Mullinax immediately told Carol Todd to insert fluids via an IV and insert a feeding tube, via her nose. Carol Todd had the IV fluids started that evening but told the family that they would have to come to Hospice LaGrange to sign papers to have the feeding tube inserted and because of such, she believed that Mae Magouirk would no longer be a candidate for Hospice LaGrange. She was then told that Mae Magouirk’s family concurred and the ONLY REASON Mae was at Hospice was because the LaGrange Hospital had failed to exercise due diligence in closely examining the power of attorney which Beth Gaddy said she had, as well as executing the provisions of Mae’s Living Will to her preordained stipulations. Gaddy only had a financial power of attorney and did not have a medical power of attorney and Mae Magouirk’s Living Will provided that a feeding tube and fluids SHOULD ONLY BE DISSCONTINUED IF Mae was comatose or in a vegetative state. She was and is in neither state.

Attempt to rescue Mae on Friday denied by Probate Judge Donald Boyd On Friday, April 1, when A. B. McLeod (brother) and Kenneth Mullinax (nephew) showed up to meet with Carol Todd and to arrange emergency air transport of Mae Magouirk to the University of Alabama-Birmingham Medical Center (One of the top cardiovascular centers in the USA) Hospice LaGrange stalled them while Beth Gaddy went before Troup County Georgia (LaGrange, Ga.) Probate Judge Donald W. Boyd (who DOES NOT hold a law degree) who granted Beth Gaddy emergency guardianship of Mae Magouirk, giving Beth Gaddy full and absolute authority. Thus, they COULD NOT MOVE HER FOR PROACTIVE MEDICAL CARE Friday because Beth Gaddy had Hospice stop them and then she had Mae’s IV fluid tube pulled out. Beth Gaddy has repeatedly told Mr. McLeod, Mrs. Mullinax and Kenneth Mullinax that she feels they all should let Mae not eat and thus cause her to die because, and we quote Beth Gaddy: “Grandmamma is old and I think it is time she went home to Jesus. She has glaucoma, and now this heart problem and who would want to live with disabilities like these?”

As stipulated under Georgia Law, a hearing for an Emergency Guardianship, must be held within 3 days of its request and Mae Magouirk’s hearing was held on this past Monday, April 4, before Troup County Georgia Probate Judge Donald Boyd who favors granting Beth Gaddy permanent guardianship and thus will seal Mae Magouirk’s fate of allowing Beth Gaddy to starve her to death against the wishes of her Living Will and in full knowledge that Mae Magouirk is not terminal, not in a coma and is not in a vegetative state and that medical care at UAB Medical Center is awaiting her. Shiavo revisited!

Mae’s present state and vital signs Mae’s blood pressure is good, averaging 140/82 with a pulse rate of 88. However, since admission to Hospice she has not been lucid but who would be since nourishment and fluids have been denied since March 28, 2005. Also adding to her confusion is that she is off her regular medicines and is on a dose of Adavan and Morphine. Without food or water her electrolytes and body chemistry is not within its proper parameters. If her condition is not given major public attention soon, she will die, not by divine cause but by the omission of assistance by man. WE MUST GET Mae moved to UAB Medical ASAP

Resources: Probate Judge Donald Boyd…Court CASE NUMBER: Estate 138-05 Attorney for saving Mae’s life: Jack Kirby, Kirby & Roberts***

TOPICS: Health/Medicine
KEYWORDS: cultureofdeath; euthanasia; forcedexit; georgia; hospice; judicialmurder; mae; maemagouirk; magouirk; righttokill; schiavo; schindler; starvation; teri; terri; terrischiavo
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I found this posted on another message board (without a link & I couldn't find anything when I did a google).

I'm not sure how authentic this is, but it sounds legit, so I'm posting it here.

P.S. I did delete some phone numbers, (e.g. Beth Gaddy's home number was listed) because I was worried it might get FR into trouble if I posted them.

1 posted on 04/07/2005 2:59:58 AM PDT by schmelvin
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To: schmelvin

Thank you for the heads up.

2 posted on 04/07/2005 3:14:56 AM PDT by djreece (May God grant us wisdom.)
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To: schmelvin

Get ready for the influx of Freepers telling us:
A) this story is a hoax
B) It's ok because it's legal because a judge says so
C) the old woman doesn't need to live because she's old, in poor health and SOMEBODY's gotta pay for it.

I guarantee at least 1 of those answers will pop up here by the "death Freeper crowd"

3 posted on 04/07/2005 3:39:32 AM PDT by Awestruck (My ancestors were LEGAL immigrants... big difference...)
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To: floriduh voter; Brad's Gramma; pollywog; Pegita


4 posted on 04/07/2005 3:46:12 AM PDT by Awestruck (Here we go again!!)
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To: djreece

I already tried to call the hospice, but they don't open until 8:00 am. I'll be calling them back in a few hours.

I really hope FReepers aren't so thrashed from the Schiavo fight, that we stop duking it out with the pro-deathers as we hear about this sort of thing happening more and more.

According to the press release this woman is being starved against her wishes (that were explicitly stated in her living will) by her granddaughter (who was not even named in her living will as power-of-attorney) because:

“Grandmamma is old and I think it is time she went home to Jesus. She has glaucoma, and now this heart problem and who would want to live with disabilities like these?”

I intend to check into this and find out what's going on at that hospice.

5 posted on 04/07/2005 3:47:43 AM PDT by schmelvin
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To: schmelvin

OH my...

6 posted on 04/07/2005 3:47:56 AM PDT by kassie ("It's the soldier who allows freedom of speech, not the reporter..")
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To: schmelvin

thrashed but getting my 2nd wind by the grace of God.

7 posted on 04/07/2005 3:49:52 AM PDT by Awestruck (Here we go again!!)
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To: Diva Betsy Ross; Leatherneck_MT; kingattax; livius; the invisib1e hand; longtermmemmory; ...

NOC list ping

8 posted on 04/07/2005 4:19:12 AM PDT by combat_boots (Dug in and not budging an inch. NOT to be schiavoed, greered, or felosed as a patient)
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To: Awestruck; All

It's starting to look like it's not a hoax.

I did a google and found the lawyer listed in an online directory:

It's still too early for me to get anyone on the phone yet, though. I'll let you all know when I'm able to find out more.

9 posted on 04/07/2005 4:20:49 AM PDT by schmelvin
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To: schmelvin

reference bump

10 posted on 04/07/2005 4:29:14 AM PDT by tomkat
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To: schmelvin

Wow. Could this another travesty? Waiting to hear more.

11 posted on 04/07/2005 4:39:39 AM PDT by PatriotGirl827 (Would you rather be O.J.'s girlfriend or Michael Schiavo's fiancee? - Ann Coulter)
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To: schmelvin
So. It has begun. Get rid of the old or inconvenient to us. Who next? Is this hospice connected in any way to the one in Pinellas County?

Hoping this is a hoax.
12 posted on 04/07/2005 4:49:29 AM PDT by Humal
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To: schmelvin

I think you did right by deleting the phone #, this info re Mae is on Blogs for Terri and reportedly verified by the author. I received it via email this a.m.

13 posted on 04/07/2005 4:51:26 AM PDT by tutstar ( <{{--->< Impeach Judge Greer
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To: schmelvin

I wonder who the Jim King of Georgia is!

14 posted on 04/07/2005 4:55:03 AM PDT by tutstar ( <{{--->< Impeach Judge Greer
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To: Awestruck

Frankly, my first impulse was to support the fight, but you're right that I should be cautious. After all the lies told about Mrs. Schiavo, this could very well be a hoax. Unfortunately, the FR truth bar dropped a lot over the case from Florida. :-( :-(

15 posted on 04/07/2005 5:12:35 AM PDT by Gondring (Pretend you don't know me...I'm in the WPPFF.)
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To: Fedora; Calpernia


16 posted on 04/07/2005 5:23:15 AM PDT by nicmarlo
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To: Humal
So. It has begun. Get rid of the old or inconvenient to us.

No, it's begun a long time ago. But the press, and others, wouldn't tell you about it. You can education yourself on this thread as to the AGENDA that has been set, and other court cases in which these types of withholding nourishment has occurred, nationwide.

< a href="">Law changed by Hospice where terri is dying - More information (Unsourced)

Note: Though the title says it's unsourced, the text is sourced within the thread.

17 posted on 04/07/2005 5:29:07 AM PDT by nicmarlo
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To: Gondring; Awestruck

Gondring, you would find a way to say 2 + 2 = 3 is not a lie.

18 posted on 04/07/2005 5:30:12 AM PDT by nicmarlo
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To: Humal
So. It has begun. Get rid of the old or inconvenient to us.

Sorry, reformatting my link:

Law changed by Hospice where terri is dying - More information (Unsourced)

Note: Though the title says it's unsourced, the text is sourced within the thread.

19 posted on 04/07/2005 5:31:32 AM PDT by nicmarlo
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To: schmelvin

The Troup County Probate Court address is:
900 Dallis St.
LaGrange, GA 30240

Donald W. Boyd
Probate Judge

Debbie Wade
Chief Clerk

20 posted on 04/07/2005 5:35:54 AM PDT by nicmarlo
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To: Awestruck

"death Freeper crowd"

What and who is that?

21 posted on 04/07/2005 5:37:39 AM PDT by Smartaleck
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To: schmelvin
I noticed an advertisement in the subway last night:

We Fight For Brain Damaged Children!

The irony was crushing.
22 posted on 04/07/2005 5:38:45 AM PDT by the invisib1e hand (In Honor of Terri Schiavo. Let it load and have the sound on.)
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To: schmelvin

Does Grandmamma have lots of money? (I smell a rat.)

23 posted on 04/07/2005 5:40:26 AM PDT by Saundra Duffy (Rest in Peace, Theresa Marie SCHINDLER - IMPEACH JUDGE GREER!!!!!!!)
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To: Awestruck

schmelvin has a phone number and there is a case number listed.

I'm debating asking schmelvin for the phone to see if they want a website listed to gain support.

24 posted on 04/07/2005 5:44:56 AM PDT by Calpernia (
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To: schmelvin

Good move on removing phone numbers. You shouldn't leave e-mail addresses unaliased like that, though...spambots and mailbombers find them and the contact address often has to be shut down soon. :-(

25 posted on 04/07/2005 5:45:29 AM PDT by Gondring (Pretend you don't know me...I'm in the WPPFF.)
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To: Saundra Duffy

It doesn't matter if they have money persay.

On our research thread, we figured out how monies are created through something called viaticals.

Go to the latter end of the posts and you can read about them

Terri Bump Thread:

26 posted on 04/07/2005 5:46:13 AM PDT by Calpernia (
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To: nicmarlo



27 posted on 04/07/2005 5:47:18 AM PDT by Calpernia (
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To: schmelvin
"Gaddy only had a financial power of attorney and did not have a medical power of attorney..."

Follow the money.

28 posted on 04/07/2005 5:49:11 AM PDT by wife-mom
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To: Saundra Duffy
Does Grandmamma have lots of money? (I smell a rat.)

Gaddy only had a financial power of attorney...

Hmmmmmmm...I wonder if Beth is skimming a bit from Grandmamma and doesn't want anyone to know.

29 posted on 04/07/2005 5:51:12 AM PDT by Misty Memory (Making a mental note.)
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To: schmelvin; Certified Horticulturist


30 posted on 04/07/2005 5:51:13 AM PDT by sure_fine (*not one to over kill the thought process*)
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To: wife-mom; All

I'm probably going to make this a stand alone thread. This entire 'quality of life' culture is soooo intertwined....we are still mulling how to set up all the threads for easier reviewing to get the information out to everyone.

Posts just get buried.

From our research thread:

Chasing the death dividend
Viatical agreements match those who want to cash in on life insurance policies with investors willing to buy the rights to those policies. But a lack of regulation leaves the system open to fraud.

July 4, 2004

When the U.S. Coast Guard raided a Russian fishing vessel on the Pacific Ocean in 2001, investigators hit a jackpot: more than 12 tons of chalky powder hidden beneath a mountain of frozen squid, the largest haul of cocaine ever intercepted at sea.

At the time, they had no idea they also had tapped in to what federal authorities call another massive deception.

Agents tracing the source of the cocaine and probing possible money laundering eventually seized files that led deep into one of the financial industry's darkest corners: investing in the life spans of old or dying people, transactions known as viaticals.

Based on those records, federal authorities are investigating Mutual Benefits Corp. of Florida and filed a civil complaint two months ago that the Ft. Lauderdale-based viatical seller made false promises of extraordinary profit as it reeled in $1billion from 29,000 investors.

But a Tribune investigation found that Mutual Benefits is just one example of alleged deception in the rapidly growing viatical industry, a loosely regulated, often-misunderstood world that is riddled with fraud.

Dozens of companies selling viaticals maintain stellar regulatory records and have been consistently profitable. But since 1998, more than 100 companies have run afoul of state laws and regulations, records show.

The Tribune reviewed thousands of court files, analyzed government enforcement records from across the country and studied 400 current and defunct companies, piecing together a troubling portrait of an evolving industry.

In a viatical transaction, a person with, for example, a $100,000 life insurance policy might sell it for $50,000--though that figure could be lower or higher--and the investor is entitled to the full amount, minus commissions. The cold calculus is inescapable: The quicker the original policyholder dies, the better the investment.

But those profits often have proved elusive, while the industry has proved resistant to reform.

The Tribune investigation found that:

- Despite the industry's problems, a dozen states have failed to adopt laws restricting viatical businesses. Two dozen other states, including Illinois, rely only on vague regulations that serve to provide haven to troubled companies. Mutual Benefits was banned from doing business in five states but continued to operate in Florida--and in Illinois.

- Since 1995, at least 56 industry executives have been convicted of felonies for activities ranging from elaborate pyramid schemes--companies selling non-existent policies--to recruiting terminally ill patients to apply for multiple policies without disclosing their conditions, state and federal court records show.

- At least half a dozen doctors have been accused of manipulating medical diagnoses in attempts to assure investors that policyholders were near death. In most cases, these doctors delivered life expectancies without consulting with patients or their doctors.

- Companies commonly ply investors with complex contracts that downplay financial risks and obscure key disclosures, more than a dozen state investigations found. Behind advertisements guaranteeing safe and secure investments is the reality that investors may be responsible for premiums if the policyholder lives beyond life expectancy. Over time, that means investors could lose part of their principal.

"This is not a certificate of deposit," said William Scott Paige, the Florida founder of Wm. Paige & Associates, one of the country's oldest viatical companies. "No one can ever accurately predict life expectancy. They can make estimates and projections. But that's all they are."

Viaticals, which got their name from a Latin word meaning "provisions for a long journey," have gained in popularity in the past decade. When executed honestly, the deals can benefit everyone involved.

Policyholders gain a tax-free influx of cash that can be used to feather their last days in comfort, from dream vacations to new medicines.

Investors can receive rates of return double or triple that of safer investments, such as certificates of deposit or mutual funds. And the companies and brokers typically profit by taking a commission out of the money investors pay.

Eager to shed its image of shady deals, the industry now refers to its wares as life settlements. And instead of focusing on terminally ill policyholders, companies have expanded their reach to include most any older person.

But that has not been enough to reform the industry.

"We are very vulnerable to fraud and bad players," said Doug Head, director of the Viatical and Life Settlement Association of America, an Orlando-based trade group. "States don't know how to grapple with us. We are in deep need of standards."

Lawyers for Mutual Benefits say the company ran into problems not because of fraudulent business tactics or low standards in the industry but because regulators were overaggressive, which led to the raid on the company's offices.

"It's not a Ponzi scheme," said Jon Sale, a Miami attorney representing one of the company's officers. "Evidence will show that there's $200 million in escrow to pay [insurance] premiums with, which the company was not required to do."

He also disputed the Securities and Exchange Commission's claim that phony life-expectancy estimates were given to investors before they purchased a policy.

"Of course there are a lot of fraudulent viatical companies," Sale said. "But this isn't one of them."

AIDS afforded opportunities

Viatical companies grew quickly in the 1980s as the AIDS crisis presented an opportunity to buy large numbers of policies from dying patients. Mutual Benefits was founded later, in 1994, but still focused on AIDS patients and rapidly expanded to be one of the nation's largest buyers of benefits.

By the late 1990s, as medical advances prolonged the lives of many AIDS patients, payouts from Mutual Benefits' investments slowed down drastically. But the company didn't reveal this to future investors, according to SEC charges.

The company was formed in the mid-1990s by Leslie and Joel Steinger; their brother Steven, who goes by the last name Steiner; and Peter Lombardi, a family friend, according to a deposition from Steiner last month. All but Steiner have been named in the SEC civil complaint, though his consulting company was included.

The SEC's civil complaint accuses Mutual Benefits of improperly using investors' money. In response to the commission's request, a federal judge froze the company's assets and put it in receivership. The Florida Office of Statewide Prosecution has filed criminal charges of racketeering and investment fraud, while the state's Department of Insurance has suspended the company's viatical license.

The SEC in its complaint questioned the legitimacy of nearly $26 million paid by Mutual Benefits to an array of consulting firms connected to the brothers and Lombardi.

Les Steinger's Rainy Consulting Group received $9 million over four years, while Lombardi's PJL Consulting Inc. got $8.3million, Joel Steinger's Kensington Management Inc. was paid $6.3 million, and Steiner's SKS Consulting took in $2.3million, according to court documents.

Accurately predicting life expectancy is the linchpin of the viatical and life settlement industry. But because the process can be shrouded in secrecy, this calculation often has been the first point of deception.

The life-expectancy factor

George and Rose Bonomo of Plainfield, southwest of Chicago, reviewed the medical analysis provided by Mutual Benefits before investing $100,000 in 1996 on the insurance policies of two HIV-positive men.

They received a letter signed by Dr. Clark Mitchell affirming that the first man was expected to die within a year and the second within three years. The Bonomos are suing Mutual Benefits. Their Chicago attorney, Rick Schoenfield, provided an account of what happened to them.

The medical letters, which are meant to assure investors that life expectancy has been gauged by an independent, comprehensive medical review, held great weight for the Bonomos, Schoenfield said.

In the Bonomos' case, each AIDS patient received a discounted payoff, about 70 percent of their policies' face value, and Mutual Benefits received a commission. If both men died as expected, the Bonomos expected to receive just under a 30 percent return on their investment.

In the late 1980s, an AIDS diagnosis often meant death was swift and certain. By the late '90s, however, medical advances stunted many cases, and viatical companies were put on shaky ground.

Many companies' portfolios crashed because too many patients lived too far beyond expectations, state bankruptcy records show.

In some cases, doctors admitted, they earned fat fees as long as their life-expectancy estimates did not spoil the investment potential of a policy.

This year, as the Bonomos waited for the investment to pay off and couldn't get their phone calls returned, they grew suspicious. On April 30, they filed a civil claim against Mutual Benefits in U.S. District Court in Chicago.

Three days later, government agents seized control of the company, leveling a flurry of accusations, including that Mitchell and other doctors fabricated life expectancies.

With the company now in the grip of bankruptcy, they aren't sure they will collect anything, Schoenfield said.

Federal and state agents charge that Mutual Benefits masked the fact that 90 percent of policyholders, most of whom have AIDS, had lived substantially beyond life expectancy. Mutual Benefits' portfolio was not diversified to offset risks, court records show.

Doctors implicated

But the core problem, government investigators concluded in May, was that about 65 percent of policies purchased by Mutual Benefits were assigned life expectancies that were not based on "any meaningful review or confirmation by an independent physician." In their May complaint against Mutual Benefits, SEC investigators claim Mitchell was one of the culprits.

Mitchell's attorney did not return calls.

This was not the first time Mitchell's name had appeared on questionable medical diagnoses. In 2001, he was charged with 25 felony counts involving fraud based on allegations that he fabricated or manipulated life-expectancy records for Mutual Benefits. Information about the case is unavailable because the file has been sealed, according to court officials.

Government agents also detailed the actions of another physician, Edgar Escobar, who is accused of arbitrarily calculating estimates based on the wishes of Mutual Benefits founder Joel Steinger.

"Substantially all of the life expectancies purportedly assigned by Mitchell and Escobar were in fact determined by [Joel] Steinger," according to an SEC affidavit. The doctors often did not review medical records to confirm diagnosis or plot life expectancy. Instead, they issued "fraudulent life-expectancy figures that had already been designated by [Joel] Steinger."

A third doctor, Anthony LaMarca, was paid to verify life expectancies, according to court records. About 20 percent of his cases were adjusted to shorter time periods considered more acceptable to Joel Steinger, government investigators said in court filings.

In an interview, LaMarca disputed claims that 20 percent of his cases were adjusted, calling the figure closer to 3 percent.

"Those were revised because new medical information was brought to light," he said. LaMarca, who said he has cooperated with the SEC, said his medical reviews were not done on patients who had AIDS or were HIV-positive.

Mutual Benefits is only the most recent company stung by allegations of life-expectancy fraud. Nestled in the ocean resort town of Delray Beach, Fla., Dedicated Resources was one of the darlings of the industry until its sudden and unexpected collapse in 2001. The company blamed unforeseen medical advances for prolonging life spans. Disenchanted investors refused to pay extra premiums to keep the policies active.

Raking in millions

Court records provide a more detailed snapshot of a company that raked in multimillion-dollar salaries for founder Michael Zadoff and other family members, and show fat fees paid to an out-of-state doctor who estimated life expectancies after reading abbreviated medical files sent in overnight mail packets.

Dedicated Resources' medical review of patients consisted of a 30-minute examination of photocopied patient files by Dr. Lon Baratz in Rochester, N.Y., according to depositions filed in a Florida civil suit by disgruntled investors.

Baratz testified that he received $75 to $100 for each assessment. He rendered opinions without talking to the original physician or patient, according to his 2002 deposition in a pending civil case.

Patient files were bundled together by the dozens and shipped overnight to Baratz. Files never included copies of X-rays or other information that would have allowed an independent review. But photocopies of original doctors' medical charts were available, Baratz testified.

From 1993 to 1998, Baratz reviewed about 800 files and was paid about $70,000, according to his deposition in a recent civil case. Baratz was asked by attorneys representing investors to produce his records. Baratz said he shredded everything.

"It just made sense," he said.

Baratz did not respond to a request for an interview.

Viatical industry trade groups have long complained that their industry is unfairly tainted by the media. In 1999, Deborah Rhoades, then vice president of the National Viatical Association, told The Associated Press that fraud is not widespread.

Two years later, Rhoades was convicted in one of Ohio's largest viatical swindles. She had risen to become president of the now-defunct Washington, D.C.-based industry trade group.

Rhoades' case was linked to convictions of 17 other viatical executives, including fellow Ohioan J. Richard Jamieson. His company, Liberte Capital, defrauded more than 3,000 people of $100 million, court records show.

Once the owner of luxury cars and mansions, Jamieson was sentenced to 20 years in prison in December. He was ordered to repay about $92 million for the embezzlement and his role in coaching AIDS victims on how to lie to obtain policies.

Liberte Capital bought policies for pennies on the dollar. Investors were to be paid when the policyholders died. Because of this investigation, 85 insurance companies canceled most of the fraudulent policies. The insurance companies saved more than $25 million; investors lost everything.

The viatical industry's history is stamped by dozens of such fallen companies and executives. Michael Lee Davis founded his own viatical company after he was paroled from prison. He had been convicted in 1981 of murder for his role in a Houston murder-for-hire plot in which a husband, wife and son were killed for their insurance benefits.

Once Davis was freed, he again turned to life insurance to earn money. But he and his viatical company, First American Fidelity Corp., soon ran afoul of the law again.

In 2000, he was convicted of fraud for recruiting 20 people to lie about pre-existing medical conditions to obtain $5 million in policies. Davis used the falsely obtained policies to take money from investors, a Texas court found.

Policyholder scams

Scams in the industry also have involved the original policyholders.

Four years ago, more than 50 FBI and state agents poured into the Lexington, Ky., headquarters of Kelco Viatical and its subsidiary, Genesis Viatical, in an investigation dubbed Operation Clean Sheet.

To secure more policies, Kelco encouraged AIDS patients to get small life insurance policies that did not require medical tests. Kelco bought the policies and resold them to investors who were promised up to 30 percent returns, according to court records.

But the insurance companies learned of the fraud and canceled the policies, leaving investors with no hope of recovering their investments. The crime is known as clean sheeting because policyholders falsely claim their medical records are clean.

The FBI convicted 19 people of the scheme, including the company's top three executives. After being sentenced to 14 years in prison in 2003, Kelco founder Stephen Keller became a fugitive. He was tracked to Panama and arrested by U.S. marshals in February.

Government regulators have struggled to do something as simple as legally define viaticals and life settlements. What has emerged is a confusing latticework of regulations and legal opinions, allowing shady and nimble companies to easily hopscotch across state borders to avoid government investigators.

At the heart of the debate is whether a viatical or life settlement transaction should be regulated as an insurance product or as a security. The viatical industry describes itself as an alternative niche of the mainstream insurance industry, arguing it should fall under the authority of state insurance regulators, which generally are not as aggressive in pursuing fraud as federal agents.

The federal government believes the industry oversteps the traditional insurance market. The government argues that viaticals are clearly investments and should be governed as securities, which have strict federal regulations.

Renewed debate

The debate has been revived by the Mutual Benefits case. Lawyers for the company argued in court that federal securities law did not apply to the firm's deals.

On June 25, U.S. District Judge Federico Moreno sided with the SEC, finding that the investors in policy benefits offered by the company are putting money into a type of security. Mutual Benefits' attorneys immediately announced plans to file an appeal.

Moreno's ruling is at odds with a 1996 decision that resulted when the SEC filed a civil case against Texas-based Life Partners Inc. A federal appeals court sided with Life Partners' argument that it was fundamentally selling an insurance product.

The SEC's case against Mutual Benefits is widely seen as pivotal in the argument over how to regulate the industry. Should the SEC prevail, the federal precedent could be the spark to touch off new, specific state securities laws, said Tanya Solov, director of the Illinois Department of Securities.

Entangled with drug dealers

Mutual Benefits, which is in receivership, has been the focal point of more than a half-dozen Florida investigations in the past decade. But it took a federal investigation into drugs to uncover the business documents that led to the company's downfall.

Carl Villazon, a Florida deputy and forensic accountant on a task force attached to the U.S. Department of Homeland Security, helped raid Mutual Benefits offices in November 2002.

"Specifically, the investigation concerns allegations of laundering of narcotics proceeds through investment-grade viatical and life insurance policies," he wrote in an affidavit unsealed this year in U.S. District Court in Florida.

Since the high seas drug bust in 2001 aboard the Svesda Maru, agents have unearthed an elaborate criminal network of Mexican and Russian crime lords working in collusion with Colombian drug cartels. A trail of cash led to Mutual Benefits, according to court records.

Six cartel members, including one who was a Mutual Benefits contractor, have been indicted for drug dealing and money laundering. Mutual Benefits is named but not charged. Company attorneys say they did not know the foreign-based investment money represented laundered drug proceeds.

In his affidavit, Villazon detailed how the federal task force turned over an array of files and computers to the SEC in March. Armed with the evidentiary windfall, the SEC and Florida regulators took action. Many of the records seized from company files in 2002 were filed in court this year, stripping away the facade of a company on the brink of a financial abyss.

None of the executives or their attorneys would comment on the accusations.

Colombian success story

Court records reveal that Mutual Benefits marketed viaticals in Mexico and South America beginning in 2001. In Ecuador, for example, the company detailed plans to unleash 50 brokers, with the goal of grabbing an estimated $24 million from investors.

Their most successful contractor was in Colombia. Jaime Rey Albornoz, a globe-trotting broker, had the uncanny ability to rake in millions of dollars, as shown by company records submitted as exhibits in the SEC's pending case.

Albornoz was indicted last month as a drug cartel member along with four co-defendants, who are charged with moving millions of illegal drug dollars around the world and into Mutual Benefits investments, according to the federal indictment filed in U.S. District Court in Florida. Prosecutors allege that the cartel planned to profit not only from the legitimate investment results but from the commissions earned by Albornoz.

Co-defendant Rodrigo Jose Murillo also has been indicted in San Diego in connection with the drug seizure aboard the Svesda Maru.

Federal officials have not filed any drug-related charges against officers of Mutual Benefits. But they say their investigation shows that this is the first time suspected drug traffickers have used insurance investment companies as sanctuaries for dirty money.

Almost three years ago, Albornoz was buoyant as he recapped recent successes, including helping sell 1,000 policies valued at $25 million, according to company memos submitted as exhibits to the court.

"Using the words of a Colombian airline, `We must be doing something right,"' Albornoz wrote to Joel Steinger.

Albornoz detailed business meetings in Chile and Toronto, where he reportedly obtained tentative commitments from managers of large mutual and pension funds interested in funneling $100 million into investments.

"The potential is so big," he concluded, "that I do not think we are large enough to handle future demands."

COMING MONDAY In Illinois, ineffective regulations and a lack of oversight afford dissatisfied viatical buyers little protection.

- - -

How a typical viatical deal works

Viaticals are financial instruments that allow a life insurance

policyholder to sell his or her policy benefits to investors for a

portion of what the policy will someday pay



A life insurance policyholder decides to sell his or her life insurance benefits and contacts a broker or a viatical company.

Broker: The broker contacts the viatical company.

Viatical company: The viatical company lines up investors to buy the seller's policy. The company hires doctors who review the seller's medical file to make a life expectancy estimate.

Investors: Viatical investors range from individuals to large institutional firms.


(From) Investors:


Amount paid by investors-

Escrow account:

The investment money is placed into an escrow account. From the account, the money is paid out to the seller, the broker and the viatical company. A predetermined amount of the money is used to pay premiums on the insurance policy while the seller remains alive.

Seller: Typically receives 20 percent to 80 percent of the policy's face value, a figure largely determined by how long the seller is expected to live. Those with a shorter anticipated life span collect a higher percentage.

Broker: Receives a commission

Viatical company: Receives a commission

Premium payments: Money is set aside to continue making insurance policy payments. If the money is depleted, the investor often must begin paying the premiums out of pocket.


Once the policyholder dies...

Leftover escrow money:

Any unused premium payment money is returned to the investor, or is paid to the viatical company, depending on the arrangement.

Policy pays:

The investor is paid the value of the insurance policy.

Bending the rules

CLEAN SHEETING: The policy seller deceives the insurance company-

Policyholders with life-threatening illnesses obtain an insurance policy without disclosing their illness to the insurer. They typically seek policies that don't require a medical exam, and often seek policies from several companies. After two years--the period when companies can most easily question whether a policyholder has deceived them--they sell the policies to a viatical company. In some cases, viatical companies have been aware of the policyholders' deceptions.

FALSE ADVERTISING: The safety of the investment is exaggerated-

The viatical company promises the investor extraordinary returns at safe, fixed rates. Cautions that the investment is volatile are not fully explained. When policyholders don't die in the time investors had been led to believe, investors must begin paying the insurance premiums to prevent their policy from being canceled by the insurance company.

PYRAMID SCHEME: The policies don't exist-

The settlement company falsely claims it has policies available for investment. Investors put in their cash but don't realize they have not actually invested in an insurance policy. Any payoffs the company makes are financed by continually bringing in new investors.

31 posted on 04/07/2005 5:53:24 AM PDT by Calpernia (
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To: schmelvin
we quote Beth Gaddy: “Grandmamma is old and I think it is time she went home to Jesus. She has glaucoma, and now this heart problem and who would want to live with disabilities like these?”

Wish I had a nickel for every time someone posted a similar presumptuous sentiment on this board in the last few weeks. I'd have enough to make a generous donation to FR. OTOH, it'd be dirty money.

32 posted on 04/07/2005 5:54:01 AM PDT by shhrubbery!
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To: Calpernia

This post above is just about Mutual Benefits Corp. of Florida. But when you start doing searches to see who is affiliated, who is partnered, who is on the BOD....the connections get HUGE.

Again, our thread is here:

Terri Bump Thread:

33 posted on 04/07/2005 5:54:28 AM PDT by Calpernia (
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To: Smartaleck

The Death Freeper Crowd? Oh, that's just visiting "DU'ers in disguise twanging our twangers. They like to mess with us like that. Wastes our time."

Changing subjects. I wonder if this "Hospice" is connected to the one in Florida in any way. It looks like this death obsessed crowd may be taking over SOME hospices around the country, maybe with ambitions to take them all over eventually. This bunch has the legal battle out of the way, and looks like they are moving fast with the help of apparently greedy relatives possibly standing to inherit "grandmamma's" property. No?

Even if "grandmama" is in her nineties, she deserves her life. One day, before she knows it, this granddaughter will be "old" and she will wonder how she got there so quick. Felo's "hospice death squad" will be there waiting for her.

34 posted on 04/07/2005 5:56:27 AM PDT by Twinkie (EVEN THE TENDER MERCIES OF THE WICKED ARE CRUEL.)
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To: schmelvin

If there is no brain damage then by fundamental definition it is not "another Shiavo"

35 posted on 04/07/2005 5:57:11 AM PDT by bert (Peace is only halftime !)
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To: LiveFreeOrDie2001; mhking; JohnHuang2; ChewedGum; sonsofliberty2000

Is there another you all can write about to get the information out there about how these viaticals work?

36 posted on 04/07/2005 6:03:10 AM PDT by Calpernia (
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To: Fedora; windchime; Velveeta; nw_arizona_granny

Another possible qualify of life victim

37 posted on 04/07/2005 6:04:18 AM PDT by Calpernia (
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To: Gondring
Not to mention all of the lies told by the MSM, Judge Greer and the "hubby"- which were reprinted and retold here as truth by some freepers.
38 posted on 04/07/2005 6:18:02 AM PDT by Diva Betsy Ross (Code pink stinks!)
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To: combat_boots

I would like some confirmation of this story.

39 posted on 04/07/2005 6:18:49 AM PDT by Diva Betsy Ross (Code pink stinks!)
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To: schmelvin

This is a few miles from me!!

Jeez, this Useless Eater thing is getting to be too much. The elderly in Florida had BETTER pay attention as all the other states obviously!

40 posted on 04/07/2005 6:29:59 AM PDT by sandbar
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To: All
I called the LaGrange Daily news, (706) 884-7311, and spoke to Joel Martin, and gave him the basics of the original post.

He said they haven't run any stories on it and haven't heard anything of it, but he says he will check it out.

41 posted on 04/07/2005 6:49:08 AM PDT by lil'bit
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To: lil'bit

Thanks for that. I know FReepers will find out the facts. Keep us updated please. Thank you.

42 posted on 04/07/2005 6:55:32 AM PDT by yellowdoghunter (The Terri issue is legally complicated, but not the moral issue. I want to be on the side of life.)
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To: combat_boots; EternalVigilance
I hope Georgia freepers mobilize because it doesn't take long at all to bump off an innocent American by starvation-dehydration. If Georgia doesn't have any guts, do like Florida and U.S. Go straight to the US Congress. Maybe they'll do aomething like get a SPECIAL PROSECUTOR to investigate why Florida and now Georgia?

I theorized a week or so ago that the euthanasiasts were going to CREEP UP the eastern seaboard. Looks like a domino effect. First Terri, then on to Georgia.

Well orchestrated killings. George Soros is throwing a lot of his dough into the euthanasia movement, ACLU, etc. Good luck Georgians.

43 posted on 04/07/2005 6:58:32 AM PDT by floriduh voter ( Demand the Impeachment of Judge Greer...No More!!!!)
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To: schmelvin; Scoop 1; tutstar; Sun

Going up the Eastern Seaboard on George Soro's map of the world for forced exits?

44 posted on 04/07/2005 6:59:45 AM PDT by floriduh voter ( Demand the Impeachment of Judge Greer...No More!!!!)
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To: schmelvin
We're not totally thrashed but imo, a freeper in the Georgia locale should do an announcement on the Georgia boards here. Time is short but I was calling Georgia about Terri so they know there's a problem in the south already.

The US Congress needs to know about Mae asap.

45 posted on 04/07/2005 7:01:46 AM PDT by floriduh voter ( Demand the Impeachment of Judge Greer...No More!!!!)
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Comment #46 Removed by Moderator

To: Calpernia

Oh my.

47 posted on 04/07/2005 7:05:05 AM PDT by Velveeta
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To: floriduh voter


48 posted on 04/07/2005 7:05:19 AM PDT by Velveeta
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To: schmelvin

I wish it WERE a hoax.

I believe there are thousands of starvations going on in our country.

49 posted on 04/07/2005 7:09:12 AM PDT by Sun (Visit * Pray for Terri. Pray to end abortion.)
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To: floriduh voter; mhking

MHKING is a GA freeper! And he is a well read blogger!

mhking, we do not know the situation on this GA woman yet. But please, when you get a chance, read my post above about viaticals.

50 posted on 04/07/2005 7:12:16 AM PDT by Calpernia (
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