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Florida DOI Charges 8 Men With Viatical Fraud

Tue, 05/23/2000 - 11:00pm — Karen Stevenson
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The Florida Department of Insurance (DOI) has charged eight men with fraudulant activity related to the sale of viatical settlements. The eight suspects targeted for arrest are charged with submitting false information on a total of 11 life insurance applications to get more than $1 million worth of coverage from various insurers. The policies then were sold to viatical settlement providers for more than $700,000. These provider-companies marketed the fraudulently obtained policies to unsuspecting investors. All told, the eight are linked to the purchase of a total of 47 policies worth $4.9 million from 32 different insurance companies.

Viatical settlements involve the sale of a life insurance policy by beneficiaries who would like to receive a reduced amount of the policy benefits early, rather than having the full amount of the benefits go to their heirs after their death. Viaticals have traditionally been used as a way to provide cash to pay for long term care and other end-of-life costs for people who are very ill and close to death, although beneficiaries who are not near death can also sell policies to viatical settlement companies. There have been many instances of fraud in both the ways policies are purchased from beneficiaries, and the way viaticals are marketed to the public as investments.

The Florida Department of Insurance (DOI) has charged eight men with fraudulant activity related to the sale of viatical settlements. The eight suspects targeted for arrest are charged with submitting false information on a total of 11 life insurance applications to get more than $1 million worth of coverage from various insurers. The policies then were sold to viatical settlement providers for more than $700,000. These provider-companies marketed the fraudulently obtained policies to unsuspecting investors. All told, the eight are linked to the purchase of a total of 47 policies worth $4.9 million from 32 different insurance companies.

Viatical settlements involve the sale of a life insurance policy by beneficiaries who would like to receive a reduced amount of the policy benefits early, rather than having the full amount of the benefits go to their heirs after their death. Viaticals have traditionally been used as a way to provide cash to pay for long term care and other end-of-life costs for people who are very ill and close to death, although beneficiaries who are not near death can also sell policies to viatical settlement companies. There have been many instances of fraud in both the ways policies are purchased from beneficiaries, and the way viaticals are marketed to the public as investments.