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.
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.
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