A federal jury in Virginia convicted a former Costa Rican insurance executive last month on all counts in a $485 million fraud scheme. The Defendant had been accused of lying to clients and investors about the financial stability of his company. Minor Vargas Calvo, the Defendant, was president of Provident Capital Indemnity Ltd. Provident sold bonds guaranteeing funding for life settlement companies, which buy life insurance policies from insured people at less than face value and collect the benefits when those people die.
The government originally claimed Provident sold $670 million in bonds based on fraudulent financial statements, but an accounting done by an Internal Revenue Service investigator verified only $485 million. According to prosecutors, Vargas not only misrepresented the company’s assets, but also lied when he told clients, investors and regulators that Provident was protected by reinsurance agreements with major companies. The jury found Vargas guilty of one count of conspiracy and three counts each of mail fraud, wire fraud and money laundering. Vargas is scheduled for sentencing October 23rd and could face a maximum of 170 years in prison.
Source: Insurance Journal
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