By Brian Bandell
Joel Steinger, the former top executive of Mutual Benefits Corp., was sentenced to 20 years in prison for running a $1.25 billion insurance fraud scheme.
He previously pleaded guilty to conspiracy to commit mail and wire fraud for deceiving about 30,000 investors. He is the last of 13 people charged in the scheme.
U.S. District Judge Robert Scola sentenced the 64-year-old Steinger to 20 years in prison, out of a maximum 50-year sentence. He reportedly showed up in court in a wheelchair with an oxygen tank.
His Fort Lauderdale-based company purchased life insurance policies from elderly people and people battling AIDS. With the policies, MBC sold shares of the policy death benefits, promising a fixed rate of return with low risk. New investor money was used to pay premiums on life insurance policies purchased by earlier investors and to pay investors who requested their money back.
MBC opened in 1997. Its scheme started to unravel in 2003 when the Florida Office of Insurance Regulation conducted a surprise inspection of its headquarters in response to numerous investor complaints. The investors complained that the beneficiaries were outliving their life expectancy so their investments were not paying out. Many of these customers were lured by advertisements promising a 42 percent return in 36 months.
MBC’s license was suspended the following year. The OIC said that by taking action when it did it preserved nearly $600 million to return to investors.
Source: South Florida Business Journal
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