Death Takes a Policy: How a Lawyer Exploited the Fine Print and Found Himself Facing Federal Charges
Investigators learned that most of the contact with the dying participants had occurred with Raymour Radhakrishnan, an employee Caramadre hired in the summer of 2007. A graduate of Wheaton College in Boston, Radhakrishnan was only 23 years old at the time. His job would be to interact with the annuitants: assess their health, explain the program, get their signatures and dispense the cash. Mainly, he would oversee a growing corporate bond program (Creation 19).
The bond program had similarities to the variable annuity scheme. Caramadre would buy certain corporate bonds on the secondary market. After the financial crisis, these bonds were selling at a steep discount. As a sweetener, the companies that originally sold the bonds had included survivorship rights for co-owners.
For example, if you owned the bonds with your wife and she died, you didn't have to wait decades to redeem them. The company would buy them back at full value. Caramadre would "co-own" the bonds with a terminally ill person. When that person died, he would redeem the bonds at face value, reaping the value of the discount.
Radhakrishnan is a co-defendant along with Caramadre in what the government contends was a vast criminal conspiracy. Reached through his public defender, Radhakrishnan declined to comment. He has pleaded not guilty to the charges.
Radhakrishnan's conversations with the terminally ill are at the heart of the criminal case against both men. Caramadre seldom met with the annuitants directly, but prosecutors allege that he instructed Radhakrishnan to deceive the potential annuitants. FBI reports, depositions and interviews suggest that Radhakrishnan told different stories to different potential annuitants. The most serious charges against the men involve allegations that they forged signatures.
One forgery count in the indictment involves Stephanie Porter's mother, Bertha Howard. In January 2008, Radhakrishnan met with Howard and Porter at Fatima Hospital where she was being treated for lung cancer that had spread to her brain and spine, according to Porter. Radhakrishnan gave her mother a check for $2,000 and explained how Howard might be able to get more if she signed more documents. The next meeting between Radhakrishnan and Howard occurred in a nursing home a few weeks later. Porter was also present. She says her mother, shaky and heavily medicated, struggled to sign some forms. There was no additional explanation from Radhakrishnan, according to Porter. A week later, Howard died. Shortly after that Radhakrishnan called Porter to tell her that the company would not accept the signatures so there would be no more money forthcoming. Porter said it didn't matter since her mother was dead.
But a bond account was opened under Howard's name nonetheless. On the account are signatures that Porter does not recognize as those of her mother. The indictment charges that they are forgeries. Caramadre says it was a mistake and documents he provided to ProPublica show that no money was ever put into the account.
The prosecution persuaded a judge to allow it to take depositions of dying participants in the schemes even though no charges had been filed at the time. Over a few weeks in hospitals and private homes, with tubes in their noses and a variety of high-powered medications in their blood streams, the annuitants testified that they did not understand the arrangement they had entered into with Caramadre and Radhakrishnan. Some denied writing their signatures on forms submitted to insurance and bond companies.
Caramadre believes the depositions show that the FBI and prosecutors misled witnesses and thus tainted their testimony. (See video clips from the depositions.) An FBI spokesman said the agency does not comment on active cases.
The Wall Street Journal wrote two stories on Caramadre's cases, one in February 2010 on variable annuities and another a month later on the corporate bond program.
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