Men Charged With Defrauding Investors Of Insurance Policies
January 23, 2002 at 6:31 PM EST - Updated July 2 at 9:46 PM
CLEVELAND (AP) - The U.S. attorney's office in Toledo has charged two men in a $105 million nationwide scam to cheat investors who bought insurance polices of terminally ill people.
James A. Capwill, 37, of Aurora in suburban Cleveland, appeared Tuesday before a federal judge in Toledo on a 160-count indictment that alleges he and a former business associate, J. Richard Jamieson, lied to more than 2,800 investors across the country.
Prosecutors say the men laundered millions of dollars and spent it on themselves and their families.
The allegations involve viaticals, investments that give terminally ill patients money to spend during their last days.
Viatical companies such as Jamieson's Liberte Capital Group of Toledo purchase the life insurance policies at a fraction of the payout value, then sell them to investors. When the person dies, the investors are paid off.
But in the case of Liberte, investigators say many of the policies were obtained fraudulently by policyholders who already had terminal illnesses or were HIV-positive and did not disclose that to insurers. The companies would not have issued the policies had they known and won't pay the benefits. That means investors won't get their expected payoff.
The IRS has accused Jamieson and Capwill of having an agreement to skim money from investors' funds at Liberte. Capwill would give the money to Jamieson through R.J. Management, insisting that no one at Jamieson's company know about it.
Prosecutors are seeking $105 million in assets from Jamieson, including his $1.4 million home, his vacation home and several companies.
In charges filed in October, Capwill was accused of stealing $39 million from the escrow account and spending it on homes and cars. His attorney, John S. Pyle, declined to comment.
Jamieson's attorney, J. Scott Broome, denied the allegations. He said his client blames Capwill for the thefts.
In September, the U.S. attorney's office charged Deborah Ann Bartoe, 35, who processed insurance policy paperwork for Liberte, and Stacey Tate, 27, the company's operations manager, with fraud for their alleged roles in defrauding insurance companies and investors.
(Copyright 2002 by The Associated Press. All Rights Reserved.)