$100 Million Fraud Relating To Life Settlements Is Alleged
Three principals of a group of businesses that acquired and marketed life settlements to investors have been arrested and charged in an 18 count indictment for their alleged roles in a $100 million fraud scheme with more than 800 victims across the United States and Canada.
The indictment charges Christian M. Allmendinger, Adley H. Abdulwahab, and David C. White with one count of conspiracy to commit mail fraud, six counts of mail fraud, one count of conspiracy to commit money laundering, six counts of money laundering, and four counts of securities fraud. The indictment also seeks forfeiture of approximately $103 million from all three defendants.
According to the indictment: Allmendinger, Abdulwahab, White and their co-conspirators were principals with A&O Resource Management Ltd., and various related entities, which sold life settlement investments. The defendants allegedly engaged in a scheme to defraud investors by making misrepresentations about such things as A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds. The indictment further alleged that when state regulators began to scrutinize A&O’s investment products, Abdulwahab and his co-conspirators manufactured a pair of sham transactions in which A&O was “sold” to a shell corporate entity named Blue Dymond and later to another shell corporate entity named Physician’s Trust. It is alleged that following these sham transactions, White became the figurehead president of A&O and Physician’s Trust, but that A&O was still secretly controlled by Abdulwahab and other co-conspirators. The indictment also alleged that Allmendinger, Abdulwahab and their co-conspirators routinely used investor funds for personal enrichment.
If convicted of all the charges in the indictment, Allmendinger, Abdulwahab and White face up to 20 years in prison on each count except the four securities fraud counts, on which they face up to five years in prison per count.
In addition to Allmendinger, Abdulwahab, and White, four other individuals have been charged with criminal offenses in connection with the allegedly fraudulent scheme. Brent Oncale was charged in a two count criminal information with conspiracy to commit mail fraud and conspiracy to commit money laundering for his role as vice president of A&O. Russell E. Mackert was charged in a two count criminal information with conspiracy to commit mail fraud and bulk cash smuggling for his role as an attorney in the A&O scheme. Eric M. Kurz was charged in a one count criminal information with conspiracy to commit mail fraud and money laundering for his actions as a wholesaler of A&O investment products. Tomme Bromseth was charged in a two count criminal information with mail fraud and structuring financial transactions to evade reporting requirements for his role as an A&O sales agent in the Richmond area. In addition to the charging documents, signed plea agreements for Mackert, Oncale, Kurz and Bromseth were filed in U.S. District Court for the Eastern District of Virginia. Related court hearings have yet to be scheduled.