Summary: A life insurance scheme that targeted elderly and terminally ill people got the attorney in charge behind bars for 6 years and disbarred.
A $46 million investment scheme concocted by a Rhode Island attorney targeting terminally ill people is more than despicable. At least some will get comfort knowing that the attorney, Joseph Caramadre will not be allowed to practice law anymore. The Rhode Island Supreme Court has disbarred Caramadre.
The scheme involved taking out bonds and annuities with the personal information of terminally ill people. When the people died, he collected the money. Between 2001 and 2010, life insurance companies sold around $1.14 trillion worth of variable annuities.
Caramadre pleaded guilty in 2013 but later withdrew his plea, blaming an inadequate defense. He claimed he was innocent but a judge kept the guilty plea. Caramadre called his scheme a unique arrangement for investors. He saw an opportunity in the life insurance industry that overlooked centuries of experience and commonsense in a tough competition for market share.
He said in interviews that the companies designed the rules, he just exploited them. He explained, “All we need to do is replace the necessity of the investor having to die, with someone else dying.” He rationalized that others make money off the death of others like funeral homes and cemeteries so why couldn’t he? Many life insurance companies only required a birthdate and Social Security number to sign up so the process was simple.
His law license was suspended in 2014 after his conviction. The disbarment is retroactive to 2014. His appeal was unsuccessful, putting Caramadre behind bars in a Massachusetts federal prison for six years. He is scheduled to be released in 2018.
Nearly 10 lawsuits have been filed in Rhode Island’s federal district court in relation to the scheme by insurance companies.
Do you think Caramadre did anything wrong or was he just clever at exploiting the fine print of the contracts? Tell us in the comments below.
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Photo: totalpeople.co.uk