Dollars from death (RI)

Prosecutors in a fraud case have released the names of investors who profited from a scheme to bilk insurance companies by using the names of terminally ill patients. Some of the dozens of names on the list are raising eyebrows.

Estate planner Joseph Caramadre, of Cranston, was recently convicted of defrauding the firms of $46 million, along with his associate, Raymour Radhakrishnan. Their lawyers claim the amount was “only” $12 million. Prosecutors released the investors’ names to help the court set restitution.

Caramadre claimed to have found a risk-free way to tap into the stock market. He recruited terminally ill people to enter into agreements through the insurance companies. When the person died, Caramadre and his investors were eligible for a death benefit that guaranteed, at minimum, a full return of the investment, no matter how the market fared. He paid the terminally ill participants a few thousand dollars.

One named investor is Terry McAuliffe, a former chairman of the Democratic National Committee and bigtime fundraiser for Democratic politicians. He is running for governor of Virginia.

Another investor, Monsignor Raymond Bastia, oversees planning and financial services for the Roman Catholic Diocese of Providence. He and Mr. McAuliffe were joined on the list by Walter Craddock, a former Cranston police chief, and Gaythorne “Poochie” Angell, convicted of running a multimillion-dollar gambling operation.

They all will no doubt be listening to hear the legal and public reaction to the comments of former state Supreme Court Justice Robert Flanders, whose former law firm was also on the list.

Unlike others on the list, who didn’t respond or said they didn’t know the nature of the scheme, Mr. Flanders said he did know. “Yes, absolutely,” he told The Journal. “And there was nothing inappropriate about Caramadre’s strategy.” He said the insurance industry marketed the program to the elderly without asking for medical history. Terminally ill people were happy to be paid for their participation.

Well, maybe. The court did find Caramadre and his associate guilty of fraud. Then again, the legal ways to make a mint are many. Some of those which are legal are not necessarily moral. We are sure this matter is not over in the courts. Meanwhile, investors involved in the case may have some explaining to do to friends and neighbors.


Dollars from death
October 26, 2013
Providence Journal