STOLI

Agent Guilty of Misrepresentation Scheme to Induce Insurers to Issue Policies to “Straw Insureds”

Topics: STOLI

Defendant Daniel Carpenter, a lawyer and longtime participant in the life insurance field who knew insurers were opposed to STOLI, was convicted of devising and executing a scheme to defraud insurers by using misrepresentations to induce the issuance of high-face value universal life insurance policies to “straw insureds.” These contracts were purported to be purchased…

Agent Did Not Clearly Exceed Scope of Authority in Selling STOLI Policy

Topics: STOLI

In this case against the insurer, its agent sold an insured STOLI policy with an aggregate face amount of $10 million. The agent allegedly guaranteed that the insured would “double his money” in two years. But allegedly, he did not advise the insured of any economic factors that could affect the value of his policies…

Court Denies Motion to Dismiss Criminal Charges

Topics: STOLI

A U.S. District Court denied a motion to dismiss a 25 criminal count indictment against five defendants charged with conspiracy to commit wire fraud, aggravated identity theft, and money laundering. The indictment could, in addition to criminal charges and sentencing, result in the defendant’s forfeiture of all property, real or personal, which constitutes or is…

Lack of Insurable Interest Results in Void Contract

Topics: STOLI

U.S. Bank owned and was beneficiary of a $5 million policy on the life of Phyllis Malkin. The insurer, Sun Life, claimed the contract was a STOLI policy (it argued shadow investors utilized Malkin’s life as a conduit to procure the policy, wager on her life, and profit from her death).

STOLI Decision Affirmed on Appeal

Topics: STOLI

The Seventh Circuit Court of Appeals fully upheld the district court’s decision which held seven policies – all of which were outside the legal contestable period – void for lack of insurable interest. In upholding the district court’s decision,the Court of Appeals stated that the named insureds were used by the defendants as “puppets” and…

STOLI – Fraud Case Not Barred by Statute of Limitations

Topics: STOLI

This court denied the motion of defendants Denise Binday Koslowsky and R. Binday Plans & Concepts, Ltd. (the “Binday defendants”) to dismiss claims of fraud, conspiracy, breach of contract, negligent misrepresentation, and violations of the New Jersey Fraud Prevention Action asserted against them by plaintiff Pruco. The court also refused to agree with the defendants…

Insurer Alleges “Free Insurance Scheme and Fraud” Against Agents

Topics: STOLI

Transamerica Life Insurance Company alleged an unlawful insurance scheme by certain individuals and entities to manufacture the sale of Transamerica indexed universal life (“IUL”) insurance policies for the sole purpose of reaping huge financial gains at Transamerica’s expense. Allegedly, the ploy was perpetrated to induce Transamerica to issue IUL policies that it would not have…