'Death put' lawyer pleads guilty to fraud charge

Caramadre bought bonds, VAs using identities gleaned from the terminally ill

Nov 25, 2012 @ 12:01 am

By Darla Mercado

A Rhode Island lawyer who used variable annuities to help investors profit from the deaths of gravely ill people pleaded guilty to federal fraud charges last Monday.

Joseph Caramadre, an estate- planning lawyer based in Cranston, R.I., and his associate, Raymour Radhakrishnan, admitted in the U.S. District Court in Rhode Island that they had committed wire fraud and conspiracy.

In exchange for the pleas, the U.S. Attorney's Office will recommend that the court give the two men prison terms of no longer than 10 years. Each faced a maximum sentence of 25 years in prison and $500,000 in fines.

From 1995 through 2010, Mr. Caramadre created a strategy for investors that involved using variable annuities and naming a terminally ill person as the annuitant. Once that person died, the investor received the death benefits, as well as a guaranteed return of the principal and other enhancements.

INSURERS INVOLVED

Carriers involved included Metropolitan Life Insurance Co., Transamerica Life Insurance Co. and Western Reserve Life Insurance Co.

“Mr. Caramadre made a decision to accept the plea agreement because it was in his best interests and the best interests of his family,” said Mr. Caramadre's attorneys, Anthony M. Traini and Michael Lepizzera, in a statement.

Mr. Radhakrishnan's attorney, Olin Thompson, declined to comment.

Mr. Caramadre and Mr. Radhakrishnan are scheduled to be sentenced in February, but they still face a slew of civil lawsuits. The Securities and Exchange Commission, Transamerica and Western Reserve Life have cases pending against the two men.

dmercado@investmentnews.com Twitter: @darla_mercado

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Tech tools of tomorrow: Innovations your firms can't live without in 2020

Gadget Girl hits the tech pavilion at Pershing INSITE to see what exciting new tools advisers can't afford to miss.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print