Ft. Lauderdale Attorney Convicted of Conspiracy to Commit Wire Fraud, Mail Fraud, and Money Laundering in Connection with $1 Billion MBC Fraud
|U.S. Attorney’s Office December 04, 2013|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that a Miami federal jury convicted local attorney Anthony Livoti, Jr. of conspiracy to commit wire and mail fraud, conspiracy to commit money laundering, and mail fraud, in violation of 18 U.S.C. Sections 1349, 1956(h), and 1341, respectively, after nearly a three-month trial before U.S. District Robert N. Scola.
The verdict was the result of Livoti’s participation in a scheme to defraud approximately 30,000 victims who invested in the viatical and life settlement company Mutual Benefits Corp. (MBC). The indictment alleged that Livoti and others, including Steven Steiner, a/k/a Steven Steinger, and Michael McNerney, raised more than $1.25 billion from these investor-victims before being shut down by federal regulators in May 2004. Livoti is scheduled to be sentenced by Judge Scola on February 21, 2014, at 8:30 a.m.
According to the evidence presented at trial, from approximately 1994 to May 2004, MBC purchased life insurance policies from the elderly, as well as persons suffering from AIDS and chronically ill. Thereafter, MBC sold fractionalized interests in insurance policy death benefits, known as “viatical settlements,” to approximately 30,000 investor-victims. MBC told investors that its viatical settlements offered a fixed rate of return with low risk and that investors’ principal and returns were paid by the insurance companies. Evidence presented at trial established that MBC misrepresented many important facts relating to its viatical settlements, including, for example, the estimated life expectancies of the insured persons, MBC’s fraudulent methods used to acquire life insurance policies, the risks associated with certain policies, the payment of premiums, and the source of funds used to pay investors.
Defendant Anthony Livoti, Jr., an attorney licensed by the state of Florida, was MBC’s premium trustee and, as a result, was entrusted with millions of dollars of investor money placed in bank accounts under his control. Livoti was also the designated “trustee” of thousands of the insurance policies sold by MBC. Evidence showed that Livoti assisted MBC with the marketing of its fraudulent investment by meeting with investors in his Fort Lauderdale law office and encouraging them to purchase MBC investments.
Witnesses testified that new investor money was regularly used to pay premiums on life insurance policies purchased by earlier investors and to pay investors who requested their money back. In Ponzi-like fashion, Livoti and his co-conspirators were using new investor money to pay for earlier investor obligations. As the fraud continued, eventually investor money was required to prevent the MBC Ponzi from collapsing. Ultimately, investors lost more than $750 million.
Evidence at trial also showed that co-defendant Joel Steinger was the principal executive in charge of most major decisions made at MBC. Steinger’s trial in this case is currently set to begin April 2, 2014, before Judge Scola.
Defendant Steven Steiner, Joel Steinger’s brother, was also a founding principal of MBC, actively involved in MBC’s sales staff, and encouraged investors to buy MBC’s investments. On September 3, 2013, Steiner pled guilty to charges in this indictment. His sentencing is set for December 16, 2013. Steiner was also found guilty by a federal jury in a related case, United States v. Steven Steiner, Case No. 11-20578-Cr-Williams. On August 16, 2013, U.S. District Judge Kathleen M. Williams sentenced defendant Steven Steiner to 15 years in prison in connection with money laundering and obstruction of justice related to the use and concealment of more than $15 million dollars in proceeds derived from the MBC fraud.
Michael McNerney pled guilty in this case and was sentenced to five years in prison for his criminal conduct. McNerney, an attorney licensed by the state of Florida, assisted MBC with the marketing of its fraudulent investment by meeting with investors in his Fort Lauderdale law offices and encouraging them to purchase MBC investments.
U.S. Attorney Wifredo A. Ferrer stated, “For nearly 10 years, Anthony Livoti, Jr. used the prestige of his law license to further this massive, multi-million-dollar fraud scheme. It is outrageous that an attorney would prey on investors by promising them their money was safe and secure when in reality he was misappropriating their funds.”
“This is another case of an attorney who instead of doing the right thing was motivated by his personal greed and assisted in defrauding thousands of investors out of hundreds of millions of dollars,” said William J. Maddalena, Assistant Special Agent in Charge, FBI Miami. “An important part of the FBI’s mission is to investigate such financial frauds and hold perpetrators accountable, regardless of how elaborate or complex their scheme is.”
Mr. Ferrer commended the investigative efforts of the FBI and the Miami Regional Office of the Securities and Exchange Commission, which previously brought a civil action against MBC and its principals. This case was tried by Assistant U.S. Attorneys Karen Rochlin and Roger Cruz.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls.