Guilty Plea In $100 Million Financial Fraud Involving Life Settlements

A life settlement is an investment in which a person sells his or her life insurance policy for a cash payment, which is a percentage of the policy’s face value or death benefit. When they work properly, these transactions can provide needed cash to the insured, and a profit to an investor. They don’t always work properly. Consider the case of Eric M. Kurz.

Kurz has just pleaded guilty to conspiracy to commit mail fraud and money laundering in conjunction with his actions as a wholesaler of investment products for A&O, a group of businesses that acquired and marketed life settlements to investors.
 
Three principals of A&O were charged last month in an 18 count indictment for their alleged roles in the scheme. They are awaiting trial.
 
According to the government, A&O was founded in November 2004, and obtained life settlements from a wholesale life settlement company, then marketed and sold whole and partial interests in those life settlements to investors. In the statement of facts filed with his plea agreement, Kurz admitted that from September 2005 to November 2007, he was affiliated with A&O, creating marketing materials for A&O’s sales agents to distribute to potential investors. He also admitted that with his co-conspirators, he published information on an A&O website. Kurz knew that the website and marketing materials contained specific misrepresentations about A&O’s management and past success. According to the statement of facts, A&O obtained approximately $100 million from investors in 38 states and in Canada from 2005 to January 2008, based on the material misrepresentations and omission by Kurz and his co-conspirators.
 
Kurz pleaded guilty before U.S. Magistrate Judge M. Hannah Lauck to a one count criminal information alleging conspiracy to commit mail fraud and money laundering. At sentencing, he faces a maximum penalty of five years in prison and a $250,000 fine.