Rhode Island Estate Planning CEO and Employee Plead Guilty to Obtaining Millions in Death Benefits and Investments in the Names of Terminally Ill Individuals
|U.S. Attorney’s Office November 19, 2012|
PROVIDENCE, RI—Attorney Joseph A. Caramadre, 50, president, CEO, and majority owner of Estate Planning Resources in Cranston, Rhode Island; and Raymour Radhakrishnan, 28, an employee of Estate Planning Resources, pleaded guilty in U.S. District Court in Providence, Rhode Island, today to conspiring to steal and to use the identities of terminally ill patients to obtain millions of dollars in illicit profits from insurance companies and bond issuers. They also admitted to making numerous misrepresentations to insurance companies, brokerage houses, and dealers in furtherance of the scheme.
Caramadre and Radhakrishnan pleaded guilty before U.S. District Court Judge William E. Smith to conspiracy to commit identity theft and wire fraud as the second week of testimony in their federal court jury trial was scheduled to begin. Caramadre and Radhakrishnan were charged in a 66-count grand jury indictment returned on November 17, 2011.
Caramadre and Radhakrishnan’s guilty pleas 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; Kevin M. Niland, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division; and William P. Offord, Special Agent in Charge of the Boston Office of the Internal Revenue Service-Criminal Investigation.
According to information presented to the court, in the mid-1990s, Joseph Caramadre developed investment strategies that depended on the use of terminally ill individuals. On his own behalf and on the behalf of investors, friends, and family members, Caramadre began to purchase variable annuities from insurance companies. These annuities offered death benefits upon the death of the person identified as the annuitant. These benefits included a guaranteed return of all the money invested, plus, in many instances, a guaranteed profit, even if the market went down, and various other bonuses and enhancements.
In addition, according to information presented to the court, in 2006, Caramadre began to invest another financial product that produced substantial profits upon the death of an individual—so-called “death put bonds.” Under the terms of these bonds, the owner of the bond is able to redeem the bond years or decades prior to the maturity date upon the death of the bond’s co-owner. This investment strategy also depended on the use of terminally ill individuals.
According to court documents, Caramadre located terminally ill individuals in various ways, including by visiting AIDS patients at a House of Compassion in Cumberland, Rhode Island, by locating family members and associates who were terminally ill, and by soliciting individuals who were terminally ill to purchase small life insurance policies.
According to court documents, Caramadre placed an advertisement in a local Catholic newspaper that provided that there was a compassionate organization that would immediately give $2,000 in cash to terminally ill individuals. Dozens of terminally ill responded to the ad. Caramadre gave Raymour Radhakrishnan, who began working for Caramadre in July 2007, the job of meeting with the people who responded to the ad for the purpose of obtaining their identity information and using that information on annuities and brokerage accounts.
According to court documents, Caramadre and Radhakrishnan made misrepresentations to terminally ill and elderly patients and their family members in order to obtain their personal identity information. 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. Caramadre and Radhakrishnan 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, Caramadre and others reaped substantial profits by exercising death benefits associated with the investments.
Joseph Caramadre and Raymour Radhakrishnan are scheduled to be sentenced by U.S. District Court Judge William E. Smith on February 8, 2013.
The case was prosecuted by Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams, with the assistance of paralegal Kellyann Anderson.
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.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.
Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.