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Justice News

Department of Justice
U.S. Attorney’s Office
District of Connecticut

FOR IMMEDIATE RELEASE
Thursday, May 25, 2017

Attorney Sentenced to 3 Years in Federal Prison for Participating in Life Insurance Fraud Scheme

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID QUATRELLA, 62, of Trumbull, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 36 months of imprisonment, followed by three years of supervised release, for participating in a scheme to defraud insurance companies into issuing insurance policies on the lives of elderly people for the benefit of QUATRELLA and other investors. The scheme is known as a stranger-originated life insurance (“STOLI”) scheme.

According to court documents and statement made in court, between approximately June 2008 and January 2016, QUATRELLA and others, including insurance brokers based in California, New Jersey and Florida, assisted elderly persons in applying for multimillion dollar life insurance policies. QUATRELLA, who is an attorney, and his co-conspirators offered the insureds the promise of free life insurance for two years, after which QUATRELLA and his co-conspirators would attempt to sell the policy and provide a share of the proceeds to the insured. The insured was not obligated to pay anything and was commonly told that the premiums were being borrowed from a third-party source. As part of the scheme, QUATRELLA and others recruited investors to finance the payment of premiums on the life insurance policies, with the understanding that the investors would earn a profit upon the sale of the policy.

QUATRELLA and his co-conspirators then caused to be submitted to various life insurance providers applications containing false and misleading information, and which failed to disclose the third-party premium funding arrangements for the policies.

QUATRELLA and his co-conspirators received large commissions from the providers as a result of the issuance of insurance policies on the lives of the insureds, and QUATRELLA personally profited approximately $272,000 as a result of the scheme. QUATRELLA and his co-conspirators attempted to sell the life insurance policies to life settlement investment funds or brokers but, in certain cases, they could not find a buyer and the policies lapsed.

Although the insurance companies were exposed to a total loss of nearly $15 million as a result of this scheme, no death benefits were paid on any of the policies.

On January 4, 2017, QUATRELLA pleaded guilty to one count of conspiracy to commit wire fraud. He also has agreed to forfeit $272,000, and a restitution order will be entered after further court proceedings.

QUATRELLA has voluntarily surrendered his law license.

QUATRELLA, who is released on bond, was ordered to report to prison on July 28, 2017.

This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Avi M. Perry.

Topic(s): 
Financial Fraud
Component(s): 
Updated May 25, 2017