company, was shut down by the U.S. Securities and
Commission in May 2004.
A viatical settlement is a transaction in
which a terminally ill person sells the death benefit of his
or her life insurance policy for a lump-sum cash payment to
a third party which will collect proceeds when the insured
In October 2006, Peter Lombardi, former
president of Mutual Benefits, plead guilty to a variety of
Federal charges and was sentenced to a 20-year prison term.
Lombardi was also ordered to pay nearly a billion dollars in
restitutions. In December of 2006, Clark Mitchell, a medical
doctor associated with MBC, plead guilty to securities fraud
and conspiracy to commit health care fraud related to his
bogus determinations of the insureds' lifespan. Mitchell was
sentenced to ten years’ imprisonment, followed by three
years of supervised release. Mitchell was also ordered to
pay approximately $355 million in restitution to MBC’s
Guilty pleas of other former MBC managers
followed. In May 2007, the U.S. Attorney for the Southern
District of Florida, announced the
pleas of Carol Traina and Bari Wiggins, MBC mid-level
managers. In September of that year, three more plead guilty:
Raquel Kohler, MBC chief financial officer, Ameer Khan, who
headed the related Viatical Services Inc., and Stephen
Ziegler, MBC’s lawyer. Each was sentenced to five years in
prison followed by 3-year supervised probation. In addition
they were all ordered to pay approximately $826 million in
The restitution orders however appear
largely ceremonial. No one expects the admitted felons to
pay a dime. Thousands of victims said goodbuys to their
investments. Tens of millions of dollars disappeared without
Invisible players - -
Documents of the recent divorce proceedings
of Joel Steigner, which left his ex Diana with little more
than her designer clothing and used furniture, reveal that
Steigner was funneling MBC profits into offshore accounts.
How much and where to remain a mystery.
"Prosecutors got only the local guys"
said one observer familiar with the former MBC executives’
financial machinations, "those who have created and are
still managing their secret worldwide network of dummy
corporations and offshore accounts have gone un-noticed".
Filings in Miami Bankruptcy Court
reference two men whose names have not surfaced in the MBC
saga thus far. It is clear from the court papers however
that the duo worked closely with Lombardi, the Steiner
other disgraced MBC principals. These are W. Shaun Davis,
resident of Hamilton, Bermuda and Christopher Samuelson of Vevey Switzerland.
Davis and MBC principals go back a long way, according to Davis'
sworn testimony. Since 2002 Davis interacted with every key MBC
crook, including all three Steiner brothers, Carol Traina, and even
Peter Lombardi himself. As noted, all these individuals were
convicted of massive investors' fraud in 2006-2007, sentenced to
long prison terms, and ordered to repay the victims of their crimes
nearly one billion dollars.
In 2003 Davis became the director of
an obscure Bermuda offshore company styled 'Triangle
International Asset Management', court documents show. Triangle was
engaged in the business of creating shell offshore companies and
managing assets for wealthy clients seeking anonymity. Steven
Steiner was a 75% owner of "Bermuda Triangle, court documents show.
Samuelson, a furtive Swiss financier, is
also in the business of mass-production of offshore "trusts"
and dummy companies for his wealthy and super-wealthy
clients looking to
disguise their real identities
and secrete assets,
according to court papers. Samuelson operates through his
Swiss-based company dubbed 'Mutual Trust' with satellite
offices strategically located in
Brunei, Gibraltar, Cyprus, Curacao
and other offshore havens.
These countries have long been on the U.S. agencies' radar
of jurisdictions prone to money laundering.
Mutual Trust's website openly peddles itself as
money-launderers’ last sanctuary, stating that while "some banks
have volunteered information on accounts held at overseas branches
to their domestic tax authorities driven by their own fear of
criminal prosecution ... we will not use financial institutions to
hold assets on behalf of our clients ... [or] jurisdictions that do
not respect and uphold the fundamental right of clients of
confidentiality". Although Samuelson does not identify which
jurisdictions "do not respect our fundamental right of
confidentiality" it is clear that he is referring to the United
Samuelson's client list includes a
wide-spectrum of notorious
shadowy Arab sheikhs to fugitive Russian billionaire Boris
Berezovsky, wanted by Interpol for money laundering and
participation in international organized crime. Samuelson
himself, for years, has been the subject of multiple high
profile money laundering investigations in the US and
Europe. Most prominent were the probes by the French Central
Office for Combating Grand Financial Offences (OCRGDF) a
principal French governmental agency investigating major
financial frauds, and the Economic Investigation Service (FIOD/ECD),
the Netherlands money laundering watchdog, court filings
show. In the early 2000s Samuelson was also investigated by the
FBI in connection with the Bank of New York money laundering
scandal. Samuelson has never been arrested, indicted or
"Money laundering is extremely difficult
to prove or prosecute" said one expert familiar with Samuelson’s
Chris knows how to walk on water,
he is the ultimate 'man in the shadows'", he added.
The "silent partner" - -
According to court documents, Samuelson
set up and managed
a network of shell companies and offshore accounts for MBC
principals. Through these dummy corporations and
anonymous accounts, the
illicit gains have been spirited out of country. One witness
testified under oath that in 2003 Steve Steiner met with her
in the New York Waldorf Astoria Hotel to tout a $15 million
investment by her family. Steiner depicted Samuelson as
MBC's "silent partner".
According to the sworn testimony of another
witness, after Steiner was indicted on Federal money
laundering and numerous other charges in January 2009,
Samuelson panicked. He requested of the witness to urgently
turn over to Samuelson numerous MBC related documents, in an
apparent effort to discard or alter evidence against
Samuelson. "Chris asked me to give him documentation, all
papers that I could find" the witness testified "something
happened and Steve Steiner was indicted", the witness
continued, "it is very important now because I don't want to
follow Steve Steiner".
So far Davis and Samuelson appeared to
escape the grip of the Feds' long arm. Neither has been
arrested or indicted, even though they apparently visit the
U.S. frequently. Indeed court filings show that their
lawyers actually intend to put them on the stand in the
civil proceedings pending in Miami Bankruptcy court. That
case involves a dispute over $15 million invested in MBC by
a European group in 2004. Judge Cristol set the trial for
late October - early November of this year.
Complaints of favoritism - -
Judge Cristol appointed James Feltman, a well-known South
Florida bankruptcy trustee, to analyze conflicting claims and report his
findings to the court. Feltman received $200,000 as an advance for his fees
and expenses, court
records show. This sum was paid by
the clients of Patricia Redmond, Feltman's long-time friend
and the lead lawyer for one of contending groups. Concerns are voiced
that Feltman has since avoided interviewing witnesses and
looking at evidence that may be unfavorable to Redmond's clients.
... continued in the next CaseTrace™
See "Incestuous Relationship I"