New York State Residents Sentenced For Roles In Mail And Wire Fraud Conspiracy Relating To Life Insurance
CONCORD – Two New York City men, who previously pled guilty to conspiracy to commit mail and wire fraud in connection with a scheme to fraudulently obtain high value life insurance policies for the purpose of selling those policies to third party investors, have been sentenced to 18 months in federal prison. The scheme, which related to Stranger Originated Life Insurance (“STOLI”) policies, allowed the defendants to earn substantial commissions from the insurance companies issuing the policies based on the false information provided by the defendants.
According to documents filed in the United States District Court and other documents in the public record, Robert Wertheim and Abraham Kirschenbaum, both of New York, admitted that they conspired with others to identify elderly individuals interested in purchasing high value life insurance policies at no cost. Wertheim and Kirschenbaum conspired with others to provide false information on multi-million dollar life insurance policies to induce insurance companies to issue the policies, including but not limited to materially false information as to the assets held by and net worth of the insureds, whether or not the insureds intended to finance the cost of the substantial premiums associated with such policies, and whether the insureds intended to assign the beneficial interest in the policy to third parties. Some of the policies issued based upon the false representations were issued by a New Hampshire insurance company, Lincoln National Life Insurance Company.
Kirschenbaum and Wertheim, who faced a maximum prison sentence of 5 years in federal prison, were both sentenced to 18 months based on their substantial assistance to the government in its ongoing investigation of others. Additionally, Kirschenbaum was ordered to forfeit $1,000,000.
“Fraudulent life insurance procurement schemes pervert the market for life insurance policies,” said Acting United States Attorney Donald Feith. “By conspiring with others to infect the life insurance market with these fraudulently obtained policies, the defendant skewed the normal operation of life insurance and put insurers at substantial risk from the losses that could be incurred relating to such policies. Our office’s investigation of this practice is ongoing.”
The United States Secret Service, the United States Postal Inspection Service and the Federal Bureau of Investigation led the investigation of this case.