News and Press Releases

Brothers Sentenced for Selling More than $6 Million in Pirated Software

FOR IMMEDIATE RELEASE
October 21, 2010

WASHINGTON - Eric M. Kurz, 46, of The Woodlands, Texas, pleaded guilty today to conspiracy to commit mail fraud and money laundering in conjunction with his actions as a wholesaler of investment products for A&O, a group of businesses that acquired and marketed life settlements to investors, announced U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

According to the statement of facts, A&O was founded in November 2004, and obtained life settlements from a wholesale life settlement company, then marketed and sold whole and partial interests in those life settlements to investors.  A life settlement is an investment in which a person sells his/her life insurance policy for a cash payment, which is a percentage of the policy’s face value or death benefit.

In the statement of facts filed with his plea agreement, Kurz admitted that from September 2005 to November 2007, he was affiliated with A&O, creating marketing materials for A&O’s sales agents to distribute to potential investors.  He also admitted that with his co-conspirators, he published information on an A&O website.  Kurz knew that the website and marketing materials contained specific misrepresentations about A&O’s management and past success.  According to the statement of facts, A&O obtained approximately $100 million from investors in 38 states and in Canada from 2005 to January 2008, based on the material misrepresentations and omission by Kurz and his co-conspirators. 

Kurz pleaded guilty before U.S. Magistrate Judge M. Hannah Lauck to a one-count criminal information alleging conspiracy to commit mail fraud and money laundering.  At sentencing, he faces a maximum penalty of five years in prison and a $250,000 fine.

Three principals of A&O were charged on Sept. 9, 2010, in an 18-count indictment for their alleged roles in the scheme.  They are awaiting trial.

This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with significant assistance from the Texas State Securities Board.  The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg from the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr., of the Criminal Division’s Fraud Section.

The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

 

 

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