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Incestuous Relationship Part II.
The Men in the Shadows
by: Rod Dozor in Moscow and Victor L. in New York
September 2 2011

 

The trial of Steven Steiner and his brother Joel Steigner, former principals of the infamous Mutual Benefits Corporation, is expected to begin in January next year.

Mutual Benefits Corporation (MBC), a former Ft. Lauderdale-based prosperous viatical settlement company, was shut down by the U.S. Securities and Exchange 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 dies.

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 investor-victims..

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 restitutions.

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 a trace...

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 brothers and 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 States.

Samuelson's client list includes a wide-spectrum of notorious international characters from 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 convicted...

"Money laundering is extremely difficult to prove or prosecute" said one expert familiar with Samuelson’s techniques, "and 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 edition ...

See "Incestuous Relationship I"


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Cast of Characters

 


Peter Lombardi

 
 
 
 
 


Steven Steiner

 
 
 
 
 
 


Joel Steigner

 
 
 
 
 
 


Chris Samuelson

 
 
 
 
 
 


W. Shaun Davis

 
 
 
 

Gazprom