Refreshments served at MSM parties.
Posted on 12/20/2005 6:49:46 AM PST by Liz
The former Bronx Boys & Girls Club at the center of a scandal over $875,000 funneled to the liberal radio network Air America is fighting eviction............
.........known as the Gloria Wise Boys & Girls Club until its charter was revoked by the youth organization's national headquarters, was ordered to turn in the keys............
Gloria Wise lost $9.7 million in city contracts...... because of an investigation of its finances.
"There was a time when they provided services for senior citizens, the frail and for youth," said Herbert Freedman, chief officer of Co-op City's management firm, Riverbay Corp. "Now it looks like it's for profit, since they charge $400 to $500 a month for day-care services. That's not why they were given the space."
(Excerpt) Read more at nypost.com ...
Rosen is no stranger to leftist causes and used the typical liberal scam --- conning taxpayer money to promote a political agenda. Commie Con Game: Steal as much as you can from the the public purse, and put on the Tolerance and Compassion Act while you're at it.
Rosen----one of the phony Russian-born con artists seeking asylum in the US was once known as "the Lenin of the North Bronx."
The US-based Russian crime wave is immense and consists of billion dollar frauds of auto insurance companies and Medicare by staging auto accidents.
Rosen was booted from the top post at the Bronx-based Gloria Wise Boys & Girls Club in June 2005 after the city yanked $9.7 million of the agency's contracts and launched an investigation into the group's finances, including the loans.
Rosen belonged to the Communist Progressive Labor Party by the time he took the helm of the nation's largest rent strike during a 13-month standoff at Co-op City that ended in 1976. Also in 1976, he wore a wire for Charles Hynes, then a special state prosecutor who investigated Rosen's claim that NY Assemblyman Alan Hochberg tried to bribe him with offers of a job and cash in order to keep Rosen from running against him.
Hochberg was convicted and sent to jail, while Rosen, with no more than a high-school diploma, was left to run the largest cooperative-apartment complex in the country, with about 50,000 residents.
Rosen was identified as coming from a family of Russian revolutionaries and said he claimed not to believe in electoral politics.
"Friend of the people" Rosen, has a home in Co-op City and an oceanfront condo in Rockaway Beach according to property records. And he is most probably living off the taxpayers as we type---collecting Social Security, state and city pensions, health benefits, maybe disability, and God knows what else he's got his filthy hands on.
good post, liz
I wonder if err America will report this turn of events, just ignore it, or blame it on Bush. Hmmm?
I'm guessing we won't be hearing about this in the MSM - particularly the Times.
Too bad the NSA did not wiretap these commies.
Thanks. Glad you liked it.
Heheh.....nice zinger.
I remember the Co-Op City strike in 1976. I used to watch Eyewitness News with Roger Grimsby and the other tall, lanky guy. There was Storm Field as the weatherman, Gloria Rojas being something that only Gloria could be and Warner Wolf doing (BOOM) sports.
I was nine and had no clue what a co-op was, let alone why a co-op was on strike. Was I that big a nerd? Apparently.
""There was a time when they provided services for senior citizens, the frail and for youth," said Herbert Freedman, chief officer of Co-op City's management firm, Riverbay Corp. "Now it looks like it's for profit, since they charge $400 to $500 a month for day-care services. That's not why they were given the space."
Typical money grabbing by liberal rat controlled pseudo non profit.
Of course tonight we will see this news on ABCNNBCBS and it will be front page news in tomorrow's NY Slimes, Wash Compost, and LA Slimes. Then the weekly non news mags Newsweak and Slime will make this a cover story in their next addition.
Of course anyone who believes that the MSM will respond as an investigative body re this criminal ridden left wing phoney non profit, will be buying the Brooklyn Bridge from Lize and I, this afternoon. Bidding for the Bridge starts at noon EST.
Investigators Say Fraud Ring Staged Thousands of Crashes
By PATRICK HEALY
New York Times, August 12, 2003
"Law-enforcement officials said today that they had cracked an insurance-fraud ring that staged thousands of car accidents and then employed its own network of doctors, acupuncture therapists and fake medical clinics to bilk an insurance company out of $48 million.
Prosecutors and insurance experts said the ring was the largest of its kind ever broken in New York State. A grand jury on Long Island has issued 567 indictments, 86 of which were made public at a news conference here today.
Those indicted included doctors, psychiatrists, chiropractors, dentists and nearly 20 bogus health-care clinics that were set up as part of the scheme to defraud
State Farm Insurance, the Suffolk County district attorney, Thomas J. Spota, said. "It's one of the biggest busts in the nation in terms of its breadth, its scope and the dollars involved," said Robert Hartwig, the chief economist of the Insurance Information Institute, an industry group. "We're talking about bringing down an entire network. It's analogous to bringing down a drug kingpin."
Mr. Spota said the ring used "runners" and "crash dummies" in cars that would cut in front of other cars, often driven by women with children or by elderly people, slam on the brakes, and cause a crash.
The authorities said the investigation dates to 2001, when they received word from insurers who noticed the same names were popping up over and over on insurance claims. One runner was involved with about 1,000 accidents.
Although tales of insurance fraud are well known in New York, Suffolk County investigators and prosecutors said this network, which traces its roots to the heavily Russian Brighton Beach section of Brooklyn, was especially large and complex.
Mr. Spota would not link the series of frauds to Russian organized crime, but an insurance-fraud lawyer familiar with the case said the fingerprints of organized crime appeared to be all over it. Some profits from the frauds were channeled to businesses in Russia, while others were funneled into a Swiss bank account and withdrawn by Russian citizens, the authorities said."
The MSM only gets aroused if Repubs are mentioned.
Maybe we oughta invent Democrat-Viagra arousal pills, and put them in their drinking water (/sarc).
Viagra would only arouse their sexual urges. The Slimes Homosexuals like Jayson Blair don't need any help there.
We need a morality/truty\h arousal pill to have a positive impact on these deviates at the Slimes.
Liberals Steal Childrens' Christmas, Hannuchah etal
And I betcha slimeball Rosen never, ever thought he'd get Hochberg's job when he turned him in (/sarc).
Virginia, There is a Santa Claus. But he gave all the presents to Air America!
+ Khanzaa or however it is spelled.
NYT does fit your sign in name.
Refreshments served at MSM parties.
Come on Coffee start working:
Should have been:
+ Khanzaa or however it is spelled.
NYT does not fit your sign in name.
Air America.
LOL!!!
http://www.cpusa.org/
A fine organization. /NOT!
Co-op City didn't happen until they destroyed the amusement park that owned the land it was built on.
Back in the 60's that was a horror scenario. Especially since across the river in NJ, Palisades Park was next to go. :-(
Yuck.
I was born in 67. I just remember Co-Op City. It wasn't until my later years that I learned these communists were infiltrating almost every aspect of society under the false idea of "helping the elderly and poor" against THE MAN.
My one sister is a leftist and she bought some underground comic in New Brunswick that featured communist propoganda about taking over an apartment for the cause of rent control. I looked at it and laughed
I think the amusement park took a big hit from the 1964-65 Worlds Fair in NYC, filed bankruptcy and along came Co-op City.
Great post, Liz.
It would appear the forces of Tolerance and Compassion spread their insight equally. Using the organizations at their beck and call, they wreak suffering on the Boy Scouts of America with campaigns to defund an organization whom they accuse of intolerance, discrimination & hate. Then in turn, organizations such as the Boys and Girls club that willingly serve their agenda are also deprived of their funding, to use instead to serve the forces of Tolerance and Compassion's own singular perception of the "greater good".
NY State Attorney General Elliot Spitzer is investigating this matter.
.
ping
These Russian emigres are more than an annoyance and a burden on our welfare system. Russian criminals in America are the worst....identity fraud, insurance ripoff scams, tax evasion schemes, etc, etc, etc.
Some of 'em got nabbed a few years back holding big jobs in the Bank of NY which they used to launder funny money. They are ruthless, sleazy, unprincipled, but highly politically-connected cons.
One of the scumbags gave money to Rudy Guiliani but they prefer Democrats----tells you a lot about Rudy, eh?
The activities of these ruthless Russian crooks are doubly disturbing since Russian emigrees come into the US under very auspicious circumstances. They are treated like royalty, get tax-subsidized government grants, tax-subsidized housing, and have job set-asides waiting for them......jobs that are taken from taxpaying born-Americans.
A TV news segment showed one of these young Russian freeloaders, who was a trained engineer, picking up welfare checks and food stamps while his wife was dolled up in an expensive fur, lolling around getting her hair done courtesy of US taxpayers.
It is an outrage that taxpayers are subsidizing this criminal element's entree into America, and are footing the bill enabling their crooked activities. They are politically savvy and their politics are corrupt and get quite Byzantine. We should be very concerned about their American presence, which is concentrated in Brooklyn, New York, and its environs......in a place nicknamed Little Odessa.
Some of these greedballs actually sued the US when we tried to get them off the tax-paid gravy train. These ruthless people are leeches and money-grubbers.
Duh---now that I outed them--- the ruthless bums will have to kill me (yawn). Gosh I'm so scared (zzzz).
Not to worry---I notfied the FBI, CIA, DOJ, the Royal Canadian Mounted Police, Interpol, Scotland Yard, and every Attorney General in the United States-------and I named names.
"Friend of the people" Rosen, has a home in Co-op City and an oceanfront condo in Rockaway Beach according to property records
Can I be a friend of the people too? Looks like it pays pretty good.
When you're 9 years old, you really have much more important stuff on your mind than this.
No apology is necessary!
CA....
These ruthless Russian criminals get into the US and onto the dole using the ruse of seeking "asylum." Read on.
FBI Tracked Alleged Russian Mob Ties of Giuliani Campaign Supporter
By Knut Royce / The Center for Public Integrity
LONG READ REST HERE: http://216.239.51.104/search?q=cache:IbwSNBinJ5QJ:store.publicintegrity.org/report.aspx%3Faid%3D323+SEMYON+KISLIN+Big+political+donor+&hl=en
WASHINGTON, December 14, 1999 — The Center for Public Integrity is investigating how billions of dollars of allegedly corrupted money from the former Soviet Union have found a haven in the United States, despite strict anti-laundering laws. Last month, the Center reported how a small San Francisco bank became a conduit for questionable funds as it, like many other banks around the country, aggressively pursued the cash from the former Soviet Bloc.
Today the Center reports on how political campaigns, also aggressively chasing after cash, end up with equally questionable contributions as suspected Russian organized crime figures seek to move into the U.S. political mainstream In future articles, the Center will show how the failure to sift the good money from bad is being replayed all over America.
A prominent commodities trader who acknowledges a business history with a reputed Soviet Bloc crime figure and a notorious arms dealer has been one of New York Mayor Rudy Giuliani's top campaign supporters. Giuliani is expected to be the Republican candidate next year for a U.S. Senate seat from New York (as of Dec 14, 1999).
Commodities trader Semyon (Sam) Kislin and his family also lavished thousands of dollars in contributions to Democratic Sen. Charles Schumer, to the Clinton-Gore re-election campaign, to former Republican Sen. Alfonse D'Amato and to a number of state and city politicians. Kislin sits on the New York City Economic Development Board.
Kislin is not alone among emigres from the former Soviet Union who have successfully established themselves in the United States while law enforcement agencies, particularly the FBI, track their alleged associations with organized crime.
The Center for Public Integrity has obtained confidential law enforcement documents detailing the activities of dozens of the emigres, but authorities rarely make cases and still less share the intelligence outside their departments.
A 1996 Interpol report claims that Kislin's firm, Trans Commodities, Inc., was used by two reputed mobsters from Uzbekistan, Lev and Mikhail Chernoy, for fraud and embezzlement. And a confidential 1994 FBI intelligence report on the Brooklyn, N.Y., mob organization headed by Vyacheslav Ivankov, the imprisoned godfather of Russian organized crime in the United States, lists Kislin as a "member/associate" of Ivankov's gang. It claims that his company co-sponsored a Russian crime boss and contract killer for a U.S. visa and asserts that he was a "close associate" of the late notorious arms smuggler Babeck Seroush, who later settled in Russia.
In a telephone interview on Dec. 17, Kislin confirmed he had employed Mikhail Chernoy at Trans Commodities, but said he didn't know Ivankov. "I never met this guy; I never saw him in my life," he said. He said that someone had forged his signature to obtain the hit man's visa. And, he confirmed, "I used to do business with Babeck Seroush."
Giuliani's prospective Democratic opponent, first lady Hillary Rodham Clinton, returned a $1,000 contribution several weeks ago after the newsmagazine U.S. News & World Report disclosed it had been given by the wife of one of Bulgaria's alleged top racketeers, Ilia Pavlov, who lives in the United States.
Recipient
Amount
Source of Funds
Kathleen Brown $25,000 Golden ADA contribution to gubernatorial campaign
Alan Hevesi $11,000 Sam, David and Henry Kislin
Rudolph Giuliani $14,250 Semyon and Ludmila Kislin, direct contributions, 1994 and 1997. Kislin hosted a fund-raiser for Giuliani at a Brooklyn restaurant: amount raised unknown.
Rudolph Giuliani $1,000 Arik Kislin, 1995.
Jules Polenetsky $7,700 Kislin contribution when Polenetsky ran
New York Liberal Party $30,000 Kislin donation during Giuliani mayoral campaign on that ticket.
Clinton-Gore $2,000 Semyon and Ludmila Kislin, primary committee 1995.
Hillary Clinton $1,000 Wife of an alleged Bulgarian top racketeer, Ilia Pavlov. The money was subsequently returned.
National Republican Congressional Committee $2,750 Jacob Bogatin, president of YBM Magnex, donations in 1996 and 19997.
Charles Schumer $8,000 Sam, Ludmila, son David and daughter Regina, $2,000 each, 1998.
Former Sen. Alfonse D'Amato $1,000 Sam Kislin
Bob Dole $250 Ludmila Kislin
Sources: Federal Election Commission, New York Campaign Finance Board, Guiliani campaign and news reports
Gives a clear meaning to what McCainFeingold speech law was allllll about. Out with clean money in with dirty money.
bump
You got that right----not that you are ever wrong. {{{{smile}}}}}
http://www.freerepublic.com/focus/f-news/1543943/posts?page=11#11
These are the same types of schemes we saw with the Viatical Settlements in the hospices and nursing homes!
http://www.freerepublic.com/focus/f-news/1379128/posts
Chasing the death dividend
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."
ping
Seems to be one scheme replicated many times.
Err America - financed by the mob - broadcasting to a mob. A match made in 'heaven'. (Betcha never hear THAT word discussed on their worthless network...)
Nice job on the research Liz. Lately, certain stories are getting back page coverage while complete garbage gets the headlines.
Here's another tidbit of interest.
23 December 1999
Financial Times (UK)
Russian mafia link to US campaign funds
By Thomas Catán in New York
Russian émigrés living in the US and believed by authorities to have links with organised crime have made campaign contributions to leading US candidates and political parties in what appears to be an effort to win political influence.
Through family members and businesses, Semyon (Sam) Kislin - identified in a 1994 internal report by the Federal Bureau of Investigation as a member of a Russian crime syndicate - contributed $46,250 to the political campaign of New York mayor Rudolph Giuliani, a Republican, in 1993 and 1997, election records show.
The commodities trader also donated $8,000 to New York senator Charles Schumer, a Democrat, last year, and contributed to several other US political figures. The allegations against him were first publicised by the Center for Public Integrity, the Washington-based non-profit group, earlier this week. Mr Kislin has denied any links with organised crime.
It also emerged that Jacob Bogatin, an associate of Semyon Mogilevich, who is himself alleged by US and UK intelligence authorities to be the head of a Russian crime syndicate, made donations to the National Republican Congressional Committee between 1996 and 1998. Mr Mogilevich has denied the allegations against him.
Election records show Mr Bogatin contributed at least $2,750 to the Republican campaign group - sometimes under the name of his company, YBM Magnex.
The Philadelphia-based magnet manufacturer, which was founded by Mr Bogatin with Mr Mogilevich, was raided and closed down by US authorities in May 1998. YBM Magnex pleaded guilty to securities fraud and was fined $3m in November 1999.
These and other developments have prompted US investigators to start looking closely at Russian assets and investments in the country, particularly in the New York area, according to people close to the investigations.
Though the political contributions traced so far are not large, they will fuel concerns that money from Russian organised crime could be finding its way into the political system.
"When I was in the Department of State, from time to time we would hear of people associated with organised crime reaching out to members of the [Capitol] Hill," said Jonathan Winer, who until recently served as deputy secretary of state. "The administration briefed Hill members on more than one occasion."
Mr Winer noted that those briefed by the State Department came from both main political parties, and on all occasions dropped contact with the figures under suspicion.
In recent years, two Russian businessmen identified by US authorities as having links to Russian organised crime have turned up at Democratic fundraising events, despite being denied entry visas. Both have appeared in photographs with President Bill Clinton and Vice-President Al Gore.
Yesterday (December 1999), the office of Senator Schumer said it had performed a background check on Mr Kislin and found nothing on him. "If any of these allegations prove true, we will absolutely return the money," a spokesman said.
Mr Giuliani's office could not be reached for comment.
You did an earlier post about Russian criminals permeating the sex industry.
They bring over Russian women with promises of legit work, then enslave them here, by forcing them into sex trades----stripping--prostitution, etc.
Illegal Immigration, Human Trafficking, and Organized Crime
(excerpt)
It is useful to make a distinction between two key activities of organized crime groups; trafficking of illegal goods and the provision of protection and enforcement services, usually to other criminal businesses. The Russian case shows how the agencies (the ‘mafiya’) selling the use of force for protection tend to form the core group of the criminal world. On the other hand, the position of organized crime involved in, say, marketing contraband has a more ambiguous position. The centrality of mafia-type organizations in Russia hinges on the fact that their activities compete directly with a key function of the state, the monopoly of force (Varese 2001: 4-6; Volkov 2002: 21-23).
However, even in the Russian case, one should not exaggerate the domestic protection function as the mafia is also extensively involved in transnational activities. In fact, organized crime has, in recent years, become more diverse in scope, more pervasive in its actions, and much more transnational in its reach. In sum, the ‘transnational criminal today tends to be active in several countries, going where the opportunities are high and the risks are low’ (Williams 2001: 58-60). Not unlike terrorism, the transnational organized crime makes efforts to benefit from the weak legal and bureaucratic capacity and flawed politics of weak or failed states (Williams 2002: 169-74).
(snip)
Within Europe, most of the women working as prostitutes come from Russia and other countries of the former Soviet Union. The number of sex migrants in Europe is impossible to determine, but 100,000 is sometimes given as a conservative estimate.
A higher estimate is reached if one believes that 50,000 Russian women are lured every year to the sex business abroad. On that basis, one may even suggest that the number of foreign sex workers in the EU varies between 200,000 and half a million. Ukraine seems to be a major source of sex migrants as 20 per cent of the trafficked migrants from there are women, while the corresponding figure for Lithuania is 7 per cent and Poland 9 per cent (Weir 2001; Salt and Hogarth 2000: 71-73; Global Report 1999: 225-27). The higher level of living and the Roman Catholic culture in Lithuania and Poland may explain the difference.
The estimation of the number of women trafficked for the sex industry is made even more difficult by the fact that women may come to a country for brief stints by a legal visa, go back home for a while, and return again. Those staying in prostitution business for longer periods of time may have originally entered the country legally to work, nominally at least, as maids, entertainers, waitresses, or secretaries (on problems to estimate trafficked migrants, see Salt and Hogarth 2000: 29-43).
(snip)
One thing I find really interesting about this topic is that the rise of the Russian mob in New York followed the decline of the Gambinos after the Gotti bust, which also shifted the balance of power to the Genoveses. I have wondered if these things are related, either by opportunism or by design, and how this shift in power relates to the political balance of power in New York politics.
Genoveses 'top of five Mafia families'
The FBI considers the Genoveses to be the biggest and most powerful of New York's five Mafia gangs. The four other families have seen their leaderships undermined by a relentless campaign against organised crime in the United States over the past 20 years, detectives say. That has led to a new underworld order. The Genoveses - once seen as the second most powerful family after the Gambinos - have now moved up to the number one slot, the FBI believes. The Gambinos were crippled by the arrests of their boss John Gotti and other leading figures.
Hearing on the Administration's "National Money Laundering Strategy for 2001"
Prepared Mr. Stuart Eizenstat, Partner, Covington and Burling
10:00 a.m., Wednesday, September 26, 2001 - Dirksen 538
The unhappy experience of the Bank of New York highlights the vulnerability of our financial institutions. The Bank was involved in an alleged money laundering scheme in which more than $7 billion was transmitted from Russia into the Bank through various offshore secrecy jurisdictions. At least one relatively senior official of the Bank was suborned, and she suborned others.
We do not know to this day how much of the money came from the accounts of the Russian "Mafiya," how much represented assets stolen in the course of the privatization of state industries — undermining the hopes of Russian reformers — and how much was money hidden to escape legitimate taxation, destroying the fiscal projections on which the reformers depended to lower taxes for ordinary citizens.
We do know that the money came out of Russia through accounts in shell banks chartered in places such as the South Pacific island of Nauru.
The Deputy Chairman of Russia’s Central Bank has estimated that, in 1998 alone, $70 billion was transferred from Russian banks to accounts in banks chartered in Nauru; not all of that money went to Bank of New York, of course, but none of it was ever intended to stay in Nauru.
Mmmmmmm....interesting theory.
It appears the Russian crooks have little or no compunction about using our sacrosanct political system to further their underhanded goals. They keep the pols in obeisance with plenty of dirty money. This creep Kislin boldly held fund-raisers for politicans.
Also these Russian types come from a culture where the government is totally corrupt.
Should also remember, these are not the well-to-do Russians of a generation ago who fled carrying small items---jewelry and Faberge eggs---to sell for their sustenance.
After the recent disintegration of the USSR, the current crop of Russians plundered the Russian government of assets it held under Communism.
The Gottis and Genoveses and all their rackets do not have access to the kind of ready money in huge amounts.
And I don't recall John Gotti being on a campaign donor's list.
Thanks.
I don't know how much is truth vs. legended; but I remember the conversations always going to drugs when the Genoveses family was brought up vs. the Gambinos.
I was much younger when my Great Uncles were alive; but I know I first heard about drugs in reference to the discusions when the Genovese family was discussed.
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