Friday, September 28, 2012

Fraud or Hero?

We've touched on "stranger owned" life insurance and annuity plans many times in the past (most recently: here). While there are legitimate uses for these kinds of plans, they are often of dubious legality.

Recently, Joseph Caramadre (a Rhode Island financial planning guru) decided to try his hand. Believing that the Ocean State's insurable interest requirement was weak, he decided it'd be a good idea to entice seniors (and folks knocking at death's door) to purchase variable annuities which he would then either keep for himself or sell off to rubes investors.

Acting as a "charitable organization," he's created a furor in Rhode Island, but may not have done anything illegal.

Time will tell.

Meantime, our friends at LifePartners (about whom we initially wrote here, with subsequent updates) appear to have dodged any number of bullets:

"Life Partners Holdings, Inc. has been cleared of allegations by Texas state securities officials that it did not register life settlement transactions as securities under state law."

The court basically told Lone Star State authorities to pound sand, clearing the way for LP to continue on its merry way.

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