Federal Indictment Charges Estate Planning CEO and Employee with Fraudulently Obtaining Millions in Death Benefits and Investments in the Names of Terminally Ill and Elderly Individuals
|U.S. Attorney’s Office November 17, 2011|
PROVIDENCE, RI—A Rhode Island attorney and an employee of his Cranston, R.I., estate planning company were charged in a 66-count federal grand jury indictment returned Thursday alleging that they conspired to steal and to use the identities of terminally ill patients and elderly individuals to obtain more than $25 million in illicit profits from insurance companies and bond issuers.
Attorney Joseph A. Caramadre, 49, president, CEO and majority owner of Estate Planning Resources, and Raymour Radhakrishnan, 27, an employee of Estate Planning Resources, are charged with conspiracy and multiple counts of mail fraud; wire fraud; identity theft; aggravated identity theft; and money laundering. Caramadre is also charged with one count of witness tampering.
The two-year investigation and indictment were announced by Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Robert Bethel, Inspector in Charge of the Postal Inspection Service, Boston Division; and William P. Offord, Special Agent in Charge of the Boston Office of the Internal Revenue Service - Criminal Investigation.
The indictment alleges that Caramadre and Radhakrishnan made misrepresentations to terminally ill and elderly patients and their family members in order to obtain their personal identity information. It is alleged they used the information, including names; dates of birth; and Social Security numbers, to obtain more than 200 variable annuities and to open more than 75 brokerage accounts in order to purchase “death-put” bonds in the victims’ names without their knowledge and consent. It is alleged that the defendants either forged the signatures of terminally ill people on account documents or obtained the signatures by means of misrepresentations. When the terminally ill person died, it is alleged that Caramadre and others reaped substantial profits by exercising death benefits associated with the investments. The scheme allegedly generated more than $25 million in illicit profits.
It is alleged that Attorney Joseph Caramadre launched the scheme in 1995. Raymour Radhakrishnan is alleged to have begun participating in the scheme when he was hired by Caramadre in 2007.
According to the indictment, one means by which the defendants undertook their alleged scheme was to regularly place advertisements in the Rhode Island Catholic newspaper, offering a $2,000 charitable gift to people suffering from a terminal illness. It is alleged that Radhakrishnan met with individuals and their family members who responded to the advertisement and gave them money on Caramadre’s behalf, while, at the same time, making an assessment as to the life expectancy of the person. It is alleged that if Radhakrishnan believed the person was likely to die in the near future, he would tell them Caramadre had more money available for them. Radhakrishnan and Caramadre then allegedly either forged the terminally ill person’s signatures or obtained their signatures on account opening documents by making misrepresentations and omissions about the nature of the documents.
The indictment alleges that some terminally ill people were misled when they were told their signatures were needed for receipts documenting Caramadre’s charitable gift. Others were allegedly misled when they were told that an account would be opened to benefit the terminally ill person’s surviving family members, or that an account would be opened to benefit other families suffering from terminal illness. The indictment alleges that Caramadre and Radhakrishnan concealed from the terminally ill people, their families and care givers that Caramadre and his investors stood to make a substantial profit from their deaths.
In addition, the indictment alleges that Caramadre and Radhakrishnan made numerous misrepresentations to insurance companies, brokerage houses and other corporate entities. It is alleged that they falsely claimed that the terminally ill people were clients of Caramadre’s law practice and that the terminally ill people were not paid or given money to become annuitants. It is also alleged that the defendants misrepresented the financial assets and investment experience of the terminally ill people; misrepresented the relationship between the terminally ill people and Caramadre or his clients; that the proceeds of the accounts would go to the terminally ill; falsely claimed that Caramadre paid for the terminally ill people’s burial expenses at the request of the Catholic Church; and concealed Caramadre’s ownership interest in many of the investments.
According to the indictment, Caramadre attracted capital from wealthy and prominent individuals and corporations as investors by telling them that he discovered a “loophole” which permitted the use of terminally ill persons on variable annuities and as co-owners on joint brokerage accounts to be used to purchase death-put bonds. Caramadre allegedly entered into profit-sharing agreements with some of these outside investors, through which Caramadre allegedly received a significant percentage of all profits earned.
The indictment seeks the forfeiture by Caramadre of property derived from the scheme.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams.
The matter was investigated by the U.S. Attorney’s Office and law enforcement agents from the FBI, U.S. Postal Inspection Service and IRS - Criminal Investigation.