Provident Capital Indemnity Ltd. at the Center of Another Collapsed Life Insurance Investment Scheme
Costa Rican bond company Provident Capital Indemnity was involved in the collapsed A&O Life Investment Fund. According to the SEC, Provident is now involved in another collapsed life settlement "investment."
Here is the SEC's Complaint filed in Texas against American Settlement Associates, Charles Jordan and Kelly Gibson. The complaint alleges that the defendants sold fractional ownership interests in a viatical policy and then did not use the investors' money to cover future premium payments on the policy. Instead, the defendants used the investors' money to support defendants' lavish lifestyles.
The complaint alleges that defendants raised over $3.7 million from more than 50 investors in 10 states. The defendants promised a fixed rate of return of between 42% and 48%.
How in the world could anyone believe that they could get that kind of guaranteed investment return? If someone promises you that kind of return, then you need to hold onto your wallet and run.
As in the A&O debacle, the defendants assured investors that the investment was protected by a bond issued by Provident Capital. The complaint alleges that Provident Capital is unreliable, has a checkered regulatory history, and is banned from California.
In all likelihood, this is another life settlement investment scheme that will leave insurance agents collecting large premiums and investors holding the bag.
Mr Thomas,
I appreciate you posting news and updates on these matters. This site seems like the only one out there to offer any information on the growing fraud with A&O and other Life Settlement investments. I would like to ask you though...
When do you foresee an end/resolution to the A&O scam in particular? I may be getting a little impatient, but this whole process seems to be going painstakingly slow. I believe I've commented on here before that at this point I'm not too hopeful that I will recover any of my investment, but I would like the individuals involved to be brought to justice. Would you be able to offer an educated timetable as to when we can expect some sort of charges to be brought upon these guys? Is there another case we could use as a sort of model to go by?
Check www.lifefundstrustee.com. The most current information is posted there by the trustee, and is probably as much free help as we're going to get in this. They have finally established the "bar date", a deadline for claims to be filed, August 30 I believe. This is progress, but how this will all end is anyone's guess, and I've never been able to find anyone willing to even hazard a guess on that.
Where's Mr. Informed Guy saying that PCI is an innocent victim in this scheme. That PCI is stepping up to the table on a whopping 2 out of 57 policies. (I hope that's not a batting average). Ooooohhhhh, I guess NOT. PCI is having "banking problems" that has taken more than a month to "correct," if it ever does get "corrected."
Mr. Informed Guy, just so you NO, I passed this SEC proceeding along for Mr. Thomas to post.
Mr. Informed Guy, PCI just missed its SECOND payment due July 15th. Maybe PCI should hire David White. He worked at Chase before becoming president at A&O. Maybe he could FIX PCIs "banking problems." John, try a different name than informed guy. It's probably getting harder for you to keep selling this stuff. I'm sure you claim your company is SOOOO different than A&O-NOT!
Mr. Investor, I am glad to see that you are still posting. For a minute, I thought you might have been the shooter at Emcore in Albuquerque.
You need some serious professional help. I suggest that you see somebody ASAP and please ask for medication.
Mr.Informed Guy,
I have declared my affiliation with A&O. Why don’t you tell the other bloggers just how you are associated with A&O, and if not A&O, what other life settlement? If you suggest that you are an “investor,” what other affiliation do you have with this life settlement industry? In other words, are you a present or former owner, manager, promoter, introducer, broker, sales agent, etc. It’s only fair that others understand your perspective. This time try not to MISINFORM.
Could we please keep this discussion board on topic? I too would like to know who is posting here. Why stay anonymous? Those who invested in this scam need accurate unbiased information, not in-fighting and bickering.
FOR IMMEDIATE RELEASE: May 5, 2010
Contact: Robert Elder, Communications, Texas State Securities Board, at 512-305-8386
Judge Freezes Assets of ‘Life Settlement’ Company Accused of Fraud in Collecting $65 Million from Investors
AUSTIN, TEXAS – Travis County state District Court Judge Stephen Yelenosky today granted the State Securities Board’s request to appoint a receiver to take control of the assets of Retirement Value LLC, a New Braunfels company accused of securities fraud and deceptive practices in the sale of investments tied to insurance death benefits.
Retirement Value collected $65 million from more than 800 investors between April 2009 and February 2010, according to court documents filed today by the State Securities Board and the Office of the Attorney General. The investments were allegedly based on the proceeds from the death benefits of people who owned life insurance policies that were purchased by Retirement Value.
The state’s petition alleges that Retirement Value’s chief executive, Richard “Dick” Gray, “is a recidivist who has repeatedly engaged in illegal sales of securities through fraudulent schemes.” Gray’s modus operandi, the petition states, is to “reap lucrative profits from fraudulent schemes involving the sale of securities until regulators either intervene or shut down the underlying brokerage.”
Retirement Value also used the services of Midwest Medical Reviews LLC to estimate the life expectancies of the policyholders whose policies were acquired, the petition states. Midwest Medical is controlled by George Kindness, who pleaded guilty in 2006 to a federal charge of introducing misbranded and adulterated drugs into commerce. Retirement Value “relied solely on life expectancy analyses procured from Midwest Medical,” the petition states.
Estimating when an insured will die is a critical part of a life settlement investment. Companies that purchase life insurance policies must pay the premiums to keep the policies in force so they can collect the benefits when the insured dies. If an insured outlives his or her life expectancy, premiums must continue to be paid, shrinking the return on investment in the death benefits.
Of the $65 million Retirement Value has received from investors, $9.3 million was paid as commissions to unregistered sales agents selling life settlement investments on behalf of the company. Retirement Value, Dick Gray and other principals in the company have retained $8.4 million of investors’ money, according to the petition.
Gray and Retirement Value promised investors a “baseline expected income” at an annual rate of 16.5%.
The Enforcement Division of the Texas State Securities Board started an undercover investigation of Retirement Value earlier this year. Texas Securities Commissioner Denise Voigt Crawford issued an Emergency Cease and Desist Order on March 29 against Retirement Value for selling unregistered securities and failing to disclose relevant facts about the investment and the company’s principals. The commissioner’s notice of hearing is pending in the State Office of Administrative Hearings.
Securities law generally requires that a person who sells securities must be registered with the State Securities Board and fully disclose all material facts about the investment and the persons selling that investment. Gray failed on both counts, the state alleged, citing a record of state and federal complaints and actions against him and companies with which he was associated:
Beginning in 2005 Gray sold life settlement contracts for a company called Secure Investment Services Inc. (SIS), which in 2007 was sued by the Securities and Exchange Commission. The SEC alleged the company orchestrated a Ponzi scheme and misled investors by providing them life expectancy estimates from companies that included Midwest Medical. A federal court in California ultimately appointed a permanent receiver to take control of SIS.
In June 2009 the Texas Department of Insurance filed a notice to revoke Gray’s insurance license, in part based on his conduct as an agent of Secure Investment Services.
In 2008, Gray sold life settlement investments that were purportedly issued by American Settlement Associates LLC. On March 19, 2010, a federal judge in Houston granted the Securities and Exchange Commission’s request to freeze the assets of ASA and appoint a receiver to control the company. The SEC alleged that the principals of ASA improperly spent investor funds on personal expenses and to support other businesses.
Anyone with questions about an investment made through Retirement Value should contact the Enforcement Division of the Texas State Securities Board at 512-305-8392.
For more information on the Texas State Securities Board:
Gray started with Secure Investments FRAUD in 2005.
Gray sold for American Settlements FRAUD in 2008.
Finally, Gray decided he wanted his own "private label" FRAUD in 2009.
I'll bet many of the same agents who sold other frauds, also sold this one. Why not, essentially 15% commission. It seems 15% is the rate at which these agents would even sell to their mothers.
What's with the FBI, the SEC, the US Attorney, the Texas Attorney General, TSSB? Don't you guys understand by now? I'm not even referring to Spaldings' Consolidated Wealth Holdings or Rooney's Fox Financial. You MUST go after the sales people PLUS give any and all information to the INVESTORS to go after these guys. If you DON'T make these conspiring sales people think twice before defrauding the public, you (agencies) will NEVER stop this fraud. It's only getting WORSE. SHOW me the list of sales agents for these 3 investments! You (agencies) may redact what is necessary, but PRINT their names! DO NOT crawl behind your "this is evidence gathered during an investigation" CRAP. That information is fully "discoverable" if not presumably in the hands of the defendants. If, as you have shown to date, you do not use that information, then share it with us. There ought to be open dialogue between the regulating and criminal agencies and the investors who intend to pursue these criminals with exchange of information-ANY information that could or would be shared as part of a discovery process-NOT just what is presented in OPEN court. I'm waiting.
Mr. Investor, just curious...how much did you lose in A&O?
Mr. Informed Guy,
You never answered my question posted July 24. You are on the seller side, but just where do you fit in? No one associated with this FRAUD is innocent and ANYONE who proclaims otherwise is affiliated. I'm curious too, just how much did you sell?
Everyone who bought any of this paper lost at least $35,000, most lost more. It doesn't really matter on an individual basis. We all should consider the strength in our numbers going forward. Once this bankruptcy is finalized and any assets left distributed, we are all resources for each other (possibly) in the pursuit of further legal action. Please stop the bickering. The guilty parties will pay their price eventually. Just takes time.
Mr. Investor,
Like you, I am also an investor.
simple questions Is Provident Capital a triple A Rated Company and are they fraudulent?
Mr. Informed Guy,
You purposely did not answer my question. I have a very difficult time believing that you are an investor “like me.” I don’t believe any truly INFORMED investor (as you claim) would be proclaiming that both PCI and the sales agents are innocent victims. I rather think you are like John and Laura Spalding as well as my sales agent. Yes, I think you are more like them and NOT like me.
Since Mr. Thomas has already produced a list of sales agents, maybe you could share with us if YOUr sales agent is on that list. The list is incomplete but most likely would have your sales person included.
I have a suspicion that your sales agent would like to come clean and discuss more about this FRAUD. I have a feeling that your agent coaxed you into investing your retirement money- am I right? And just which Entrust did you send your investment? You see it’s common that many of agents are also investors.
I know that John Spalding never answered the previous blogger regarding who sold Spalding the investment. Maybe you can show that you’re more like Spalding and most definitely not like me..
Mr. Investor,
I have accepted the fact that you are a bitter individual. You have no right to throw out accusations and compare me to anyone affiliated with A&O. It's people like you who make this world a worse place. You are the kind of guy who yells at service professionals and/or displays road rage on a consistent basis. You might even be a guy who goes "postal" one day...if not already.
Perhaps you should get some mental therapy and move to Australia. What's next...are you going to sue your real estate agent b/c your house didn't appreciate 200%?
I have been burned big time by A&O, but at some level, I have to hold myself accountable for getting involved in something without doing my own homework. My CPA advised me again doing this. How about your CPA, financial advisor, attorney...what did they advise you?
Mr. Informed Guy,
I have accepted the fact that you are an extremely judgmental individual who enjoys personally attacks as opposed to providing justification for your position. I am glad I’m not your spouse or colleague. I suppose when you find it difficult to defend your position, you resort to name calling (bitter or “psycho” or shooter). I would suggest that you review your previous postings. Thanks for your misguided “concern” about my well-being but since you don’t know me at all, your “web diagnosis” is completely inaccurate. I could have personally attacked you but I decided to take the higher ground and use facts to back up my statements. Hopefully you now have been INFORMED that A&O is NOT an isolated FRAUD. With a much understanding wife, I have adjusted. My bitterness has been gone but I remain very PASSIONATE regarding this injustice. I can't comprehend the way law enforcement deals with these financial crimes. You have suggested to other bloggers that you are an “informed” individual and have erroneously suggested that PCI and the sales agents bear little responsibility for this FRAUD. I felt it a duty, as I see it, to “correct” your statements to prevent other investors from remaining passive. This same FRAUD has been played out several times before and undoubtedly is continuing to be perpetrated as we write. It’s not a partial fraud or a semi-fraud. This is a well-orchestrated fraud that will continue because there is NO consequence for the majority of the individuals (sales agents) involved. These FRAUDS can’t exist without them. I can see this as a problem for law enforcement, but it doesn’t make it right. This is like the city police who went to arrest drunken fans leaving ONE gate of ONE stadium after ONE professional football game. The police were so overwhelmed that they could barely handle the number of individuals they arrested.
If you knew what I know, you wouldn’t be proclaiming your sales agent as innocent. As has been suggested previously, only individuals like you can champion this cause. I, like Sandy Burton, would suggest that you seek legal counsel and to pursue your sales people through FINRA arbitration or through the courts. Also, report these individuals through their state licensing agency. The sales agents can try and defend their actions with the agencies while providing prospective clients notice of a current investigation.
How would you feel if your sales agent continued to sell other individuals similar FRAUDS when you believed (or should have believed) he/she was guilty? I suggest it is a MORAL obligation to pursue these individuals in the only ways we have to provide justice.
If you indeed are ONLY an investor, then my sympathy. Don’t quit pursuing what is right.
Mr. Investor I am tired of listening to you moan and groan on this message board. Do you need some cheese to go with your wine. Go get a job at Walmart and shut up.