Mutual Benefits Corporation
Ponzi Scheme Operation
CLASSIFICATION: Financial Crime
LOCATION
Ft. Lauderdale, Florida
TIME PERIOD
October 1994 - May 2004
VICTIMS
30000 confirmed
Mutual Benefits Corporation, a Ponzi scheme based in Fort Lauderdale, Florida, defrauded approximately 30,000 investors from October 1994 to May 2004, resulting in an estimated loss of $835 million. The scheme, orchestrated by Joel Steinger and his associates, involved selling viatical settlements by misrepresenting the life expectancy of terminally ill policyholders and using funds from new investors to pay returns to earlier investors. The Securities and Exchange Commission shut down the operation in 2004, leading to the conviction of 13 individuals, including Steinger, who received a 20-year prison sentence in 2014 for conspiracy to commit mail and wire fraud. The case remains a significant example of investment fraud and was featured on CNBC's "American Greed" in October 2015.
Investigators and the public theorize that Joel Steinger had deeper connections with organized crime, particularly due to his ties with mobster Meyer Lansky, suggesting that the Ponzi scheme may have been part of a larger criminal enterprise. There is speculation that Steinger's prior convictions and his ban from the securities industry were known to some investors, leading to questions about how he was able to operate the scheme for nearly a decade without detection. Additionally, some believe that the scale of the fraud and the involvement of multiple accomplices indicate a well-organized operation rather than a single individual acting alone.
The Rise and Fall of Mutual Benefits Corporation
A Scheme Unveiled in Florida
In the sun-drenched cityscapes of Ft. Lauderdale, Florida, the Mutual Benefits Corporation operated one of the largest Ponzi schemes ever uncovered. This massive fraudulent operation involved the sale of viatical settlements, swindling approximately $835 million from unsuspecting investors. At the helm of this deceitful enterprise was Joel Steinger, a figure whose life and crimes would become the centerpiece of this notorious financial scandal.
Joel Steinger: A Life of Deception
Born in Brooklyn, New York, in 1949, Joel Steinger, also known as Joel Steiner, relocated to Florida in the 1970s. It was in this vibrant, tropical setting that Steinger found himself mingling with notorious figures, including mobster Meyer Lansky, a connection established through his brother's work redecorating Lansky's residence. His marriage to the daughter of a Miami banker, rumored to be associated with Lansky, further entrenched him in a network of dubious characters.
Steinger's early forays into the world of business saw him setting up a boiler room operation that peddled fraudulent commodity options. This venture ended in a conviction for fraud and a lifetime ban from the securities industry. Undeterred, Steinger continued his nefarious pursuits, founding the Mutual Benefits Corporation in 1994. Despite his criminal record, Steinger listed himself only as a consultant, sidestepping his ban and plotting his next big con.
The Criminal Enterprise
Mutual Benefits Corporation engaged in the purchase of life insurance policies from individuals facing terminal illnesses like AIDS and cancer, or those who were elderly. These policies were acquired at a discount and investors were sold shares in the death benefits, lured by promises of high returns. From October 1994 to May 2004, the company sold $1.25 billion worth of these policies to 30,000 investors. However, the promises were built on lies, with company officials falsifying the life expectancies of policyholders, even bribing a doctor to validate their claims.
Operating as a classic Ponzi scheme, Mutual Benefits used funds from new investors to pay the premiums of older life insurance policies and returns to earlier investors. This deception continued unchecked until the Securities and Exchange Commission (SEC) intervened, shutting down the company in 2004.
Prosecution and Conviction
The unraveling of Mutual Benefits Corporation led to significant legal consequences for those involved. A total of 13 individuals were convicted or pleaded guilty in connection with the scheme. Joel Steinger, the mastermind, was sentenced in 2014 to 20 years in prison after admitting to conspiracy to commit mail and wire fraud. His brother, Steve Steiner, who co-founded the company and served as vice president, faced a 15-year prison sentence after pleading guilty in one case and being convicted in another.
Attorney Anthony Livoti Jr., the trustee for the investment accounts, was found guilty of conspiracy to commit fraud and money laundering, resulting in a 10-year prison sentence. Attorney Michael McNerney also pleaded guilty and received a five-year sentence. Peter Lombardi, the company's president, shared Steinger's fate with a 20-year sentence. Meanwhile, Dr. Clark Mitchell, the bribed doctor who facilitated the fraud, was sentenced to 10 years in prison.
Media Spotlight
The audaciousness of the Mutual Benefits Corporation's scam captured public attention, and in October 2015, CNBC's television program American Greed featured the case in an episode aptly titled "Friends Without Benefits."
Sources
The details of this criminal saga can be traced back to multiple sources, including:
- Moneyweek
- The SEC's litigation release from May 6, 2004
- An article from the New Times Broward-Palm Beach dated June 4, 2009
- The U.S. Department of Justice release from March 12, 2015
- Coverage by the Miami Herald and Orlando Sentinel
- CNBC's American Greed episode on YouTube
For more comprehensive details, visit the original Wikipedia article.
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Mutual Benefits Corporation Founded
Joel Steinger establishes Mutual Benefits Corporation to sell viatical settlements.
SEC Shuts Down Company
The SEC shuts down Mutual Benefits Corporation after uncovering the Ponzi scheme.
Attorney Convicted
Attorney Anthony Livoti Jr. is convicted and sentenced for conspiracy to commit fraud.
Joel Steinger Sentenced
Joel Steinger is sentenced to 20 years in prison for his role in the Ponzi scheme.
Co-founder Sentenced
Co-founder Steve Steiner is sentenced to 15 years in prison for his involvement.
Peter Lombardi Sentenced
Peter Lombardi, president of the company, is sentenced to 20 years in prison.
Media Coverage
The Ponzi scheme is featured on CNBC's American Greed titled 'Friends Without Benefits.'
Mutual Benefits Corporation, a Ponzi scheme based in Fort Lauderdale, Florida, defrauded approximately 30,000 investors from October 1994 to May 2004, resulting in an estimated loss of $835 million. The scheme, orchestrated by Joel Steinger and his associates, involved selling viatical settlements by misrepresenting the life expectancy of terminally ill policyholders and using funds from new investors to pay returns to earlier investors. The Securities and Exchange Commission shut down the operation in 2004, leading to the conviction of 13 individuals, including Steinger, who received a 20-year prison sentence in 2014 for conspiracy to commit mail and wire fraud. The case remains a significant example of investment fraud and was featured on CNBC's "American Greed" in October 2015.
Investigators and the public theorize that Joel Steinger had deeper connections with organized crime, particularly due to his ties with mobster Meyer Lansky, suggesting that the Ponzi scheme may have been part of a larger criminal enterprise. There is speculation that Steinger's prior convictions and his ban from the securities industry were known to some investors, leading to questions about how he was able to operate the scheme for nearly a decade without detection. Additionally, some believe that the scale of the fraud and the involvement of multiple accomplices indicate a well-organized operation rather than a single individual acting alone.
The Rise and Fall of Mutual Benefits Corporation
A Scheme Unveiled in Florida
In the sun-drenched cityscapes of Ft. Lauderdale, Florida, the Mutual Benefits Corporation operated one of the largest Ponzi schemes ever uncovered. This massive fraudulent operation involved the sale of viatical settlements, swindling approximately $835 million from unsuspecting investors. At the helm of this deceitful enterprise was Joel Steinger, a figure whose life and crimes would become the centerpiece of this notorious financial scandal.
Joel Steinger: A Life of Deception
Born in Brooklyn, New York, in 1949, Joel Steinger, also known as Joel Steiner, relocated to Florida in the 1970s. It was in this vibrant, tropical setting that Steinger found himself mingling with notorious figures, including mobster Meyer Lansky, a connection established through his brother's work redecorating Lansky's residence. His marriage to the daughter of a Miami banker, rumored to be associated with Lansky, further entrenched him in a network of dubious characters.
Steinger's early forays into the world of business saw him setting up a boiler room operation that peddled fraudulent commodity options. This venture ended in a conviction for fraud and a lifetime ban from the securities industry. Undeterred, Steinger continued his nefarious pursuits, founding the Mutual Benefits Corporation in 1994. Despite his criminal record, Steinger listed himself only as a consultant, sidestepping his ban and plotting his next big con.
The Criminal Enterprise
Mutual Benefits Corporation engaged in the purchase of life insurance policies from individuals facing terminal illnesses like AIDS and cancer, or those who were elderly. These policies were acquired at a discount and investors were sold shares in the death benefits, lured by promises of high returns. From October 1994 to May 2004, the company sold $1.25 billion worth of these policies to 30,000 investors. However, the promises were built on lies, with company officials falsifying the life expectancies of policyholders, even bribing a doctor to validate their claims.
Operating as a classic Ponzi scheme, Mutual Benefits used funds from new investors to pay the premiums of older life insurance policies and returns to earlier investors. This deception continued unchecked until the Securities and Exchange Commission (SEC) intervened, shutting down the company in 2004.
Prosecution and Conviction
The unraveling of Mutual Benefits Corporation led to significant legal consequences for those involved. A total of 13 individuals were convicted or pleaded guilty in connection with the scheme. Joel Steinger, the mastermind, was sentenced in 2014 to 20 years in prison after admitting to conspiracy to commit mail and wire fraud. His brother, Steve Steiner, who co-founded the company and served as vice president, faced a 15-year prison sentence after pleading guilty in one case and being convicted in another.
Attorney Anthony Livoti Jr., the trustee for the investment accounts, was found guilty of conspiracy to commit fraud and money laundering, resulting in a 10-year prison sentence. Attorney Michael McNerney also pleaded guilty and received a five-year sentence. Peter Lombardi, the company's president, shared Steinger's fate with a 20-year sentence. Meanwhile, Dr. Clark Mitchell, the bribed doctor who facilitated the fraud, was sentenced to 10 years in prison.
Media Spotlight
The audaciousness of the Mutual Benefits Corporation's scam captured public attention, and in October 2015, CNBC's television program American Greed featured the case in an episode aptly titled "Friends Without Benefits."
Sources
The details of this criminal saga can be traced back to multiple sources, including:
- Moneyweek
- The SEC's litigation release from May 6, 2004
- An article from the New Times Broward-Palm Beach dated June 4, 2009
- The U.S. Department of Justice release from March 12, 2015
- Coverage by the Miami Herald and Orlando Sentinel
- CNBC's American Greed episode on YouTube
For more comprehensive details, visit the original Wikipedia article.
No Recent News
No recent news articles found for this case. Check back later for updates.
No Evidence Submitted
No evidence found for this case. Be the first to submit evidence in the comments below.
Join the discussion
Loading comments...
Mutual Benefits Corporation Founded
Joel Steinger establishes Mutual Benefits Corporation to sell viatical settlements.
SEC Shuts Down Company
The SEC shuts down Mutual Benefits Corporation after uncovering the Ponzi scheme.
Attorney Convicted
Attorney Anthony Livoti Jr. is convicted and sentenced for conspiracy to commit fraud.
Joel Steinger Sentenced
Joel Steinger is sentenced to 20 years in prison for his role in the Ponzi scheme.
Co-founder Sentenced
Co-founder Steve Steiner is sentenced to 15 years in prison for his involvement.
Peter Lombardi Sentenced
Peter Lombardi, president of the company, is sentenced to 20 years in prison.
Media Coverage
The Ponzi scheme is featured on CNBC's American Greed titled 'Friends Without Benefits.'